Dive Brief:

• A new report from PSFK shows that consumers now expect restaurants to provide an experience similar to the on-demand services such as Uber and Airbnb. 
• According to the report, key trends driving the dining experience include dynamic menus that analyze guest preferences, weather and other factors, and improved dine-in environments.
• The research shows that a vast majority (78%) of consumers want multiple ways to order their food, with 35% of them preferring to do so via a mobile app. Seventy-nine percent of diners are interested or very interested in receiving personalized menu recommendations based on past orders, per the report. 

Dive Insight:

Considering the impact Amazon has had on the way we shop, it should come as no surprise that consumers have quickly grown to expect such on-demand, convenient, personalized service. As a $233 billion company with more than 197 million global visitors a month, it was only a matter of time before such a significant platform would change behaviors. 

Restaurant chains are wise to respond to keep up with changing expectations and demands, particularly as younger consumers gain more spending power. This could also explain why chains that are the tech savviest are leading the industry in sales right now. Take McDonald’s, for example. The quick-service giant has made big investments in its mobile app, self-order kiosks, digital signage and, most recently, the acquisition of Dynamic Yield, a company that uses artificial intelligence to collect customer data at the drive-thru and make meal suggestions based on their history, time of day, weather, etc. It is now in place at 700 drive-thrus and will eventually be available across the system. According to Restaurant Business, McDonald’s same-store sales growth has outpaced all of its burger competitors in the space, including a 4.5% jump in Q1.  

Considering PSFK’s report’s findings that nearly 80% of consumers are interested in receiving personalized menu recommendations based on their past orders or current context, such as daypart, this investment has a lot of potential. McDonald’s isn’t the only chain taking this route. Sonic and Good Times Burgers & Frozen Custard have also invested in AI-powered menu boards, with others expected to jump on board. 

A vast majority of consumers also want a variety of options on how to order their food, so the drive-thru is just a piece of a bigger puzzle. This is why Chipotle is experimenting with mobile-ordering drive-thru lanes (Chipotlanes), Taco Bell is rolling out kiosks, KFC is focused on click-and-collect and seemingly every brand is focused on delivery. Chains focused on delivery, mobile ordering and click-and-collect seem to be especially well-positioned, as 35% of consumers say their preferred mode of ordering is via mobile app. 

This isn’t expected to slow anytime soon. A new report from NPD Group shows that digital restaurant orders have grown by 23% over the past four years and now represents 3.1 billion visits and $26.8 billion — or more than 3% of the $863 billion industry. Mobile apps represent 60% of digital orders. 

These tech-heavy efforts can’t diminish a focus on in-store dining, however. The PSFK research shows a propensity toward improved dine-in experiences, particularly through store designs. As such, a number of chains — from Subway to Denny’s — are undergoing significant store remodels.  

Perhaps the most surprising insight from this report is that a vast majority of consumers (84%) said they trust a restaurant with their personal data, such as order history, in exchange for a better experience. This essentially provides a green light for restaurants to dive into new technologies that create a deeper connection with guests, who are quickly growing accustomed to such an experience.