Oct. 31, 2017 | by Elliot Maras

A panel of experts tackles the mobile payment challenge. Photo by Matt Tilbury.

The challenge of integrating mobile payments continues to perplex many in the foodservice industry. Hence, a panel of restaurateurs tackling the issue at the Fast Casual Executive Summit drew an overflow audience at the Nashville Omni last week.

Todd Peacock of La Madeleine French Bakery & Café said customers wanted mobile payment. Photo by Matt Tilbury.

While mobile orders represent a minority of orders, panelists said the ratio is shifting in mobile's favor. 

Much of the discussion addressed subjects such as when and how foodservice enterprises roll out mobile payment. Adding mobile payments, after all, requires a financial investment, integration with existing POS software and training staff in using the technology.

Theresa Dold, vice president of agency strategy at LevelUp, a provider of mobile engagement solutions, moderated the panel.

Todd Peacock, regional vice president of operations at La Madeleine French Bakery & Café, spoke for all the panelists in saying his company recognized the need to have mobile payment in response to guests' requests for the technology.

Peacock's company introduced mobile payment a year ago after spending nearly a year planning for it. In introducing mobile pay, the company first instructed its managers to use the app in order to be in a position to answer customers' questions.

La Madeleine French Bakery & Café introduced mobile payment four to six months after introducing mobile loyalty rewards, Peacock said. If they were to do it over again, Peacock said they would have added mobile rewards and mobile payment simultaneously.

Mobile pay: one aspect of apps

"Mobile pay is just a piece of the app usage," Peacock said. "It's opened the door to many opportunities." The next chapter will be how the data generated by mobile pay will be used. He said "buy one get one free" promotions can be targeted to individual guests as opposed to just groups. The app accounts for 8 percent of all transactions.

For Cowboy Chicken, introducing mobile pay was a "no brainer" since the company already had a significant takeout business, said Sean Kennedy, company president.

Consultant Alan Wright notes the importance of transparency with franchisees. Photo by Matt Tilbury.

The topic of franchise arrangements for mobile pay naturally emerged. 

Alan Wright, a consultant and the former chief marketing officer of Newk's Eatery, said the cost of the mobile payment system is shared by both the franchisor and the franchisees. He said it is critical for a franchisor to communicate the offering to its franchisees.

"Being transparent is really critical," Wright said. He said Newk's Eatery cross promoted the mobile app with other media channels when they introduced it.

Kennedy said Cowboy Chicken paid for app development using its advertising budget, a move that drew no objections from the franchisees. Orders increased after online ordering was introduced.

Having both company-owned stores and franchisees, La Madeleine French Bakery & Café launched the mobile app in its company stores before making it available to franchisees, Peacock said. He said franchisees were quick to adopt it.

Mobile ordering can backlog orders at peak order times. Wright said Newk's Eatery addressed this by grouping orders into 15-minute time zones known as "grids." The kitchen did not start working on orders from one grid until the orders from the previous grid were finished. This alleviated pressure on the kitchen.

Sean Kennedy said the choice to offer mobile pay was a "no brainer" for Cowboy Chicken. Photo by Matt Tilbur.

What about ROI?

Questions about ROI naturally emerged, but the panelists all agreed that it's not the "right" question, given the fact that mobile payment is a reality that restaurants can't ignore.

"It's as 'most reliable' today as it ever has been," Wright said. He said restaurants' marketing budgets will evolve to recognize the need for mobile payment.

While many guests ask to use Apple Pay and mobile devices that require near field communication readers, the panelists agreed that these particular tools do not currently present enough value. All panelists' companies opted to introduce their own mobile apps.

They also agreed the mobile app offers a new marketing tool. Kennedy said his company advertises its offerings on its app. 

Asked who in foodservice is leading the mobile payment space today, a  show of hands from the audience revealed that Starbucks, Chick-fil-A and Dunkin' Donuts are doing the best jobs with mobile apps.

"The apps will live forever with those brands," Wright said, noting that they were the first brands to dominate the space.

The panelists were also unanimous in the belief that all restaurants should begin investing in mobile payment.

When one audience member said he did not think a mobile payment app would not work for a small company, Wright, who has worked with companies of different sizes, said any size restaurant should find a provider to partner with.

Concerns will naturally arise when a new form of ordering is introduced, Peacock said. His company, for instance, worried they might not have enough product in inventory.

"Don't sweat some of that stuff, it's not an issue," he said. "Just start."

Another concern from the audience was chargebacks, to which the panelists responded that chargebacks are not a problem with mobile payments. Peacock said chargebacks are actually less with mobile payments.

There was little disagreement in the end that restaurants need to be involved in the mobile payment space. Fortunately, the summit provided an opportunity for foodservice companies to network with mobile payment vendors.

Registration is now open for the 2018 Fast Casual Executive Summit in Seattle.


Topics: Fast Casual Executive Summit, Online / Mobile / Social, Online Ordering, Systems / Technology

Companies: Dunkin' Donuts, Starbucks



Elliot Maras
Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.

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