November 10, 2008 – Fast-Food Chains Experiment With Takeout/Delivery Services Via Social Networks and IPhone Applications
Pizza Hut, which recently crossed the $1 billion benchmark in online
sales, is launching a Facebook application that allows fans to place
orders without leaving their profiles. Although online ordering isn't
new — the chain has offered it in some form since 2001 — Bob Kraut,
VP-marketing communications at Pizza Hut, said the bulk of that $1
billion in sales has come in the past 18 months. The chain is also
launching text-ordering capabilities and e-gift cards, which can be
purchased, exchanged and redeemed online.
Pizza Hut's not alone: A number of the nation's biggest fast-food
chains are beginning to embrace text and iPhone ordering capabilities,
at least as tests. Already for the three months ending in August, food
marketers sent almost 1.4 million text-message ads, up 37% from the
same period last year, according to ComScore's M:Metrics data.
Consumers seem to want the offers: of all the ad categories using SMS
marketing, restaurants had the highest response rates, with 15.5% of
consumers responding to the ads.
Subway spokesman Les Winograd said some of the chain's franchisees have
begun to offer ordering via text and iPhone apps. The chain has an
unusually open policy that lets individual franchisees experiment with
their businesses.
"Some of that is stuff that they're doing on their own, but
they share information," Mr. Winograd said. "We're constantly
encouraging franchisees to think out of the box and try something new.
You never know, it might take off." (He said adding turkey to the menu
was a franchisee experiment in the chain's early days.)
Lessons learned
McDonald's experimented with text-message
ordering in Chicago last summer, with signs encouraging consumers to
text in their late-night orders. Spokeswoman Danya Proud said there
were "some very good learnings from this campaign about how to execute
future viral campaigns."
Chipotle is developing an iPhone-ordering application to
complement its existing web- and fax-ordering platforms. The chain also
lets consumers pay online, place group orders and save ordering
information for return visits.
While shifting consumer behavior may be behind the move toward mobile
ordering, it's also lucrative. According to Mr. Kraut, online buyers
spend more. "It's a little more upscale demographic, and a lot of
people use credit," he said.
To attract those customers, Pizza Hut is launching a promotion with
eMusic.com that gives customers 75 free downloads in exchange for
buying a pizza online. The chain is hoping to boost awareness of its
online ordering, up its cool factor and build its customer database.
Younger consumers
Mr. Kraut said the chain uses its database
for targeted, sometimes monthly promotions, as well as market research.
He declined to disclose the size of the database or how much it's grown
this year.
"We're seeing that our customers are getting younger and younger," said
Mr. Kraut, adding that the eMusic promotion is a way to bring "people
in from other source and offering them something extra." Pizza Hut has
done a variety of online promotions this year, including a partnership
with Rockstar Games and its Midnight Club Los Angeles driving game.
Package-food companies aren't sitting on the sidelines either.
Kraft chief marketer Mary Beth West said the company has created an
iPhone application for consumers to download recipes and shopping lists
in the grocery store.
"Even in the current economy, people don't have any more time
than they had before," Ms. West said. "They're trying to get dinner on
the table, and this is going to help them do that."
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