Mobile order and pay ahead apps are taking off and finding rapid adoption by consumers accustomed to the convenience and instant gratification of the on-demand economy.
A new ForeSight report from Mercator Advisory Group, Mobile Order and Pay Ahead: A New Sales Channel for Restaurants and Merchants, describes the new world of mobile order and pay and assesses how restaurant and merchants alike can best take advantage of this increasingly popular customer convenience.
For the QSR industry, the mobile order ahead business is relatively small right now but will grow at an accelerated rate as app developers and their clients continue to launch and refine mobile apps.
The early and most active QSR adopters of mobile order ahead are the pizza chains. Phoning ahead for pizza pickup or delivery is an American ritual. So it did not take long for pizza lovers to use their smartphones to order their favorite selections.
Papa John’s and Pizza Hut said in 2016 that one-third of their sales were mobile ahead orders. Domino’s even has a Zero Click mobile app. Once it’s set up with your preferred pizza choice, just open it up—and think fast—you only have 10 seconds to cancel.
Starbucks and Dunkin’s Donuts also have very popular mobile order ahead apps. Starbucks announced that in the last quarter of 2016, 20% of its busiest stores’ sales during peak traffic times were mobile ahead orders whereas companywide, the corresponding figure is 4%.
Looking forward to the next two to three years, mobile order ahead sales will take off. Business Insider projects that mobile order ahead sales will surpass 10% of QSR orders and hit $38 billion in 2020.
Mercator Advisory Group believes that QSR mobile order ahead sales growth will accelerate given the increased consumer adoption of mobile pay apps and the announced plans by burger giants McDonald’s, Burger King, and Wendy’s to introduce apps around the end of 2017. We project that by 2020, mobile order ahead sales will reach 20% of total QSR sales.