Dive Brief:
- Taco Bell is expanding its digital properties and rolling out a loyalty program, Taco Bell Rewards, according to a press release emailed to Restaurant Dive. Taco Bell Rewards will be available nationwide later this month.
- To promote the news, Taco Bell offered a $5 Chalupa Cravings Box for free to those who downloaded the app and ordered ahead for contactless pickup on Tuesday.
- Users enrolled in the loyalty program will earn 250 points for every $25 spent. Diners will earn a free reward at 250 points, as well as get perks including birthday gifts, bonus point challenges and special deals.
Dive Insight:
Taco Bell's new loyalty program comes five years after its first such program — a lifetime ago in tech terms. And demand seemed high Tuesday with its promotion. To redeem the Chalupa reward, customers had to download the latest version of its app, which currently includes a beta version of Taco Bell Rewards. Higher than normal traffic around noon caused Taco Bell’s website and app to crash. The website was still down at 6 p.m.
An enhanced app fits the chain’s existing and robust digital portfolio. In 2014, the chain became the first quick-service brand to offer order ahead technology through its mobile app.
The timing seems ripe because of the pandemic as well. As many restaurants navigate dining room closures (and re-closures) and face an uncertain future with rising coronavirus cases, those with digital ordering channels are best positioned to not only survive but potentially thrive.
And as diners grow more accustomed to ordering their food through digital channels, it’s even more critical for restaurants to have a simple, frictionless digital presence. Perhaps the best way to get them used to such channels is through a loyalty program.
Paytronix data indicates that loyalty customers bring in more revenue. This is especially true as consumers seek value offerings amid a historically high unemployment rate. This could also explain why other brands are leaning heavily into loyalty programs at this time. Chipotle’s rewards program is only about a year old and has around 12 million members, for example. Laurie Schalow, the brand’s chief corporate reputation officer, told Forbes that the popularity of its loyalty program makes sense right now, noting consumers want to get a benefit as more of them are using the app for digital orders during the pandemic.
During the Evercore ISI Virtual Consumer & Retail Summit Conference on June 16, McDonald’s CEO Chris Kempczinski said a loyalty program is in the works for his chain as well.
“I do expect we’re going to have a loyalty program that’s expanded to all of our major markets, but we haven’t laid exactly what that configuration looks like yet,” he said.
