NEWTON, Mass.—Digital orders have risen to one-third of total convenience store and restaurant food orders, up from just 12% pre-pandemic, according to a new Paytronix report. While in-store sales remain down by nearly half, digital orders have remained elevated at 113% of pre-pandemic levels.
“Our ‘new normal’ means the digital guest experience is no longer secondary to the physical experience; it’s front and center and marks one of the biggest changes I’ve seen in 20 years working with brands,” said Andrew Robbins, CEO of Paytronix. “The opportunity for brands to use artificial intelligence to make experiences more personalized is huge. Learning directly from guests, presenting them with recommendations that resonate and instantly responding to their feedback with a personalized message from the store manager, is elevating brands that rely on their ability to connect with their guests.”
While delivery was king before and during the height of the pandemic, more recent data indicate that takeout orders now dominate digital orders, with numbers even higher than they were pre-pandemic. Takeout jumped from about 35% of orders in January 2020 to 55% in March of 2022, a trend that appears to be increasing.
“Third-party services will continue to play an important role in a customer acquisition strategy,” writes Paytronix.
Paytronix also found that delivery customers are different than non-delivery patrons. For much of 2021, the average delivery tip was 12.5% of the subtotal, more than double takeout order tips, and 2021 takeout orders included a tip just 37% of the time compared to nearly 73% of delivery orders. Delivery customers are also more loyal, with 31% of orders coming from repeat customers.
Additionally, Paytronix data show that issuing a coupon costs a restaurant $2.30 on average but results in a $9.20 lift in that customer’s lifetime value. That four-time ROI means a timely guest recovery strategy is a must-have, writes Paytronix.
Another recent Paytronix/PYMNTS report found that there is a correlation between technology adoption and eagerness to join loyalty programs or subscription services. The report found that 60% of high-tech consumers participate in loyalty programs at quick-service restaurants, and 75% do so at table-service restaurants, compared with average consumers who participate in them at QSRs (39%) and table-service restaurants (44%).
High-tech customers see mobile apps (56%) and the ability to pay online (57%) as factors that would lead them to increase their spending, while loyalty and rewards programs motivate a greater share of high-tech consumers (51%) than average consumers (37%) to spend more.
A recent Harvard Business Review study on loyalty programs found three takeaways for loyalty programs. NACS Magazine dove into loyalty programs and how they can provide convenience retailers with critical consumer insights and a competitive edge.