Dive Brief:

• New research from Oracle finds that many restaurant operators are confident in their current use of mobile technology, but only 48% of restaurant operators feel prepared for future mobile innovations, per a report emailed to Restaurant Dive.  
• In addition to feeling unprepared, 62% of respondents expressed doubts over their ability to keep up with the speed of mobile technology innovations, while 59% believe their companies face the threat of disruption from more mobile-enabled competitors.
• Simultaneously, a vast majority of operators believe that guest-facing mobile apps can reduce labor costs (84%), improve speed of service (86%) and promote loyalty and drive repeat business (93%).

Dive Insight:

Despite this “fear of disruption,” restaurant owners are optimistic that mobile investments will increase sales while saving them time and money, further underscoring a need to be bullish in the space. Consumer trends toward mobile back up this optimism. The average American spends nearly four hours per day on their smartphone, with more than 90% of that time spent using mobile apps. 

Plenty of large companies have responded aggressively, including quick-service giant McDonald’s, which just invested $3.7 million in mobile app developer Plexure. 

"Our mobile apps play a key role in our digital acceleration, allowing customers to interact with us on their terms in a personal, customized way,” McDonald’s CEO Steve Easterbrook said in a news release. 

McDonald’s is hardly alone. Chipotle introduced a new loyalty program in March that boosted downloads of its app by 480% year-over-year, while Starbucks and Dunkin’ both revamped their loyalty programs this month. Starbucks’ mobile presence illustrates just how much potential a mobile app creates, yielding 13% of the company’s sales. 

Perhaps this environment of revamped mobile apps is causing the fear of disruption operators seem to navigating. After all, very few restaurants have the deep pockets to be as bullish on mobile technology as McDonald’s, Chipotle, Starbucks and Dunkin', particularly as other pressures like labor squeeze the vice. 

However, even smaller concepts like Shake Shack and Erbert & Gerbert’s Sandwich Shop are going all in on their mobile apps. 

There are plenty of good reasons for this. For starters, restaurant digital orders have increased at an average annual rate of 23% since 2013 and are expected to triple in volume by the end of next year, according to The NPD Group. Six out of 10 digital orders are made through mobile apps. Investing in mobile can also provide restaurant brands with a slight edge over the growing third-party aggregate space. These third-party apps, such as DoorDash, Grubhub and UberEats, account for 40% of the most-used apps. As those aggregates mine consumer data, restaurant brands can do the same through their own loyalty apps, and not compromise as much of that consumer relationship accordingly.

As the Oracle report outlines, mobile apps can also promote brand loyalty and drive repeat business — a major benefit as traffic remains stagnant across the industry. 

Operators that remain reluctant to invest more on mobile should perhaps shift their focus. As the National Restaurant Association's recently-released State of the Industry report outlines, 70% of QSR operators plan to devote more resources this year to customer-facing, service-based technology like online or app ordering, mobile payments and delivery management.

“The basic paradigm that constitutes what defines a restaurant today is being rapidly redefined. It’s more about additional building blocks on the foundation — incremental gain enabled by new technologies and distribution systems," said Hudson Riehle, SVP of research and knowledge for the association.