Dive Brief:

• KFC is piloting what it claims to be the world's first drive-thru-only restaurant in Newcastle, Australia, according to a press release emailed to Restaurant Dive Wednesday.
• KFC partnered with international retail design firm FRCH NELSON to design the pilot project, which opened to the public this week.
• The location features five drive-thru lanes that accept orders and payments through the retailer’s mobile app as well as lanes to accept on-the-spot orders. The mobile order lanes feature an interactive touchscreen.

Dive Insight:

KFC's drive-thru-only concept in Australia could translate to the U.S., especially with digital orders taking over more market share. Although an increasing number of Americans are cooking at home, when it comes to dining out, more than 56% of people who eat out will do so at least two to three times per week, including both dining in and takeout, according to research from Fourth.

And when it comes to dining out, 60% of Americans are choosing takeout or delivery once a week with 20% spending more on off-premise orders compared to dine-in experiences, according to according to Upserve. The entire digital ordering and delivery space is growing 300% faster than dine-in traffic between 2014 and today.

Although some may view the drive-thru-only aspect of the new location as a limited concept, it may actually help cut into some of the competition the QSR space is seeing from third-party ordering platforms like Grubhub and UberEats, as well as the recent rise of ghost kitchens. These outposts lack the same overhead costs that traditional restaurants have to incur, making KFC’s drive thru-only location a potential answer to ghost kitchens for some retailers.

Restaurants in general are trending toward smaller spaces as fewer customers dine-in and operators are looking for ways to shift with the changing tides. Checkers & Rally's model has no dining room and a bulk of its business comes from the drive-thru followed by walk-up windows. Starbucks is piloting a pickup-only store location in New York City this fall to leverage its mobile-savvy customer base, which boasts 16.8 million mobile app rewards program users. The new stateside pilot follows Starbucks launch of a scaled-down express footprint in China designed to compete with rising coffee competitor Luckin.

Fast casual chains are also experimenting with different drive-thru options that allow customers to pickup mobile orders without getting out of their cars. Chipotle plans to build 60 of its Chipotlanes by the end of the year with more in the works next year. Blaze Pizza is experimenting with this concept as well with its Blaze-Thrus, and  Cava also plans to open five car pickup locations this year.

KFC's new pilot is a bold concept not only in QSR, but from an architecture perspective as well. Guests are greeted upon arrival by a halo-lit Colonel Sanders set atop the building's wooden walls and met with a drive-thru portal once they pull inside. The new offering taps not only into consumers' increasing demand for convenience and flexibility but interest in memorable and interactive experiences as well.

"The portal architecture was an opportunity to create an ownable element for the brand. We needed a bold moment that dialed up the scale since the entire guest journey is taking place within a car," FRCH NELSON design director Marty McCauley said in a statement.