5 Ways the QSR Industry Can Benefit from Conversational AI
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There’s been considerable disruption within the quick-service restaurant industry, especially over the last couple of years.
Brands have been trying in a lot of different ways to really affect their businesses through an increasingly competitive environment. There’s also been a transformation in their customer base, so as the Gen Y and now Gen Z become a more prevalent impact on their businesses, they’ve had to adapt their own business practices.
A number of things have popped up that they’ve been trying to do, that really take them away from their core business operation, something they’ve been very good at over 20, 30, 40 years. Some of those include being pressed to try to do more remote ordering through mobile applications, far-field device services or in-car experiences.
They’re also being pushed by the food ordering aggregators and delivery vehicles – the Uber Eats, the DoorDashes, the Grubhubs, to present their menus there and have their customers be able to order. And now they’re experimenting with how they can get delivery services out into these remote territories and areas, away from the physical restaurants that they’ve built up until now.
Quick service restaurants are facing a similar sort of disintermediation that some other industries are facing, in that these food ordering aggregators are stepping in the middle of the customer experience and the customer relationship.
Again, the DoorDashes and the Uber Eats of the world are now becoming the primary brand that the Gen Z is going to and thinking of when it comes to fast-food ordering.
Main Challenges the QSR Industry is Facing
The challenge for the quick service restaurants is how their brand can stand out, what other things they can do to drive people back into the restaurants, or try to create simplified experiences in and around the restaurants that can offset some of the disruption that’s taking place there through these aggregators.
One of the things that they’ve tried to do is set up their own so-called “ghost restaurants”, “dark kitchens”, or “delivery kitchens”, remote centers where they’re putting their food products without having any order taking staff or any fulfillment staff. Basically, just a center with a bunch of ovens and food preparation areas where they can fulfill remote orders for people who order via mobile device or people who order via self-service kiosk.
Those are all areas that they put significant effort into, or aware of that they need to adapt to. But what they’ve lost a little focus on, and where we at Artificial Solutions really think we can have a significant impact, is within their current brick and mortar restaurant operations.
This Conversational AI-powered brain that we’re injecting into these digital employees is allowing QSR brands to handle the automation of the order itself, whether it’s through remote ordering, through their mobile applications or remote services, or through some of the self-service kiosk that they place in the restaurants.
It will also drive a lot of other experiences that will both increase the value of the orders and drive significant satisfaction and loyalty from the existing customers that they’re trying to get back into their stores or into their restaurants.
The remote area is certainly a commonplace that we can have an effect over. But it’s also important that we look at some of the traditional primary ordering venues that QSRs have.
Especially in North America, the primary venue remains through drive-thrus, so people that don’t leave their vehicles, that are driving up, placing an order, collecting their food and moving on. Upwards of 70% of QRS orders remain today through the drive-thru experiences.
What the brands are challenged with is how they can drive speed, accuracy and improve the experience of the drive-thru to attract more people, as well as when they do, how they can handle peak periods in the most effective and efficient manner.
5 Benefits of Conversational AI Implementation in the QSR Sector
1. Improve Speed Ordering in Drive-thrus
One of the things that we’ve challenged ourselves to do in building out capabilities, specifically around automating and personalizing the food ordering experience, is to help brands drive things civically, hitting on speed, accuracy and overall customer experience.
If we talk about speed, we help to show how an automated assistant can handle and work in conjunction with some other innovation that they’ve tried.
Many brands have been trying out these rich digital menu boards. But what they’re finding is that these menu boards have caused an over-saturation for the food and beverage orderer, and that there are too many choices. And actually, these digital menu boards being so complicated have increased the amount of time spent in the drive-thru, adding 20 to 30 seconds in drive-thru time.
That may not sound like a lot, but when you’re talking about four to five minutes overall experiences and throughout, adding 20 to 30 seconds, it’s very significant in the QSR world.
One of the things that we can help to do is provide a simpler experience through automated voice power ordering to offset some of the richness of the menu boards, taking advantage of the value that the visual aids the menu boards bring with the simplification that a voice ordering and an intelligent assistant can add to that.
We’re helping to offset the increase in time to turn that around and, instead of it adding 20 to 30 seconds to drive-thru time, it’s taking away 30 seconds of drive-thru time in our experiences.
2. Remove up to 90% of the Order Inaccuracy
Another area is around order accuracy. Most QSRs experience 15 to 17% error rates in order fulfillment through the drive-thru.
We’re finding that with the digital assistant, which essentially knows every menu item, every option on the menu, what’s available, what’s in stock, what’s out of stock, can handle that ordering experience in a much more accurate way and take 80 to 90% of the order inaccuracy out of the process that they experienced today.
The inaccuracy drives negativity in terms of customer satisfaction because essentially people are coming to the drive-thru to get through it as easily and as quickly as they can.
If the order is inaccurate, if they forget to check their food when they leave, not only are they upset that they didn’t get the right product and have to go back, but that often may prevent them from coming back in the short term.
Speed and the accuracy are two critical areas that we’re able to affect.
3. Increase the Order Value with Personalized Prompts from your Digital Assistant
A third area is trying to drive increased order value, so how can I drive the average order size up? How can I proactively ask to upsell elements? Or if I’ve got packages or different meal order package, how can I effectively inject that into the order and experience without delaying it? But also, how can I try out new order points?
One of the things that we’ve built in is the way to try out personalization on a dynamic basis. You might try at different times of the day or in different seasons through the year, different ways of casually upselling different new products. Either it’s an add-on to an existing order that they’re placing or a brand-new menu item that they want to try out and offer an incentive to, you can try those out in a very real-time way.
As opposed to trying to train the human employee to do all these very nuanced and adjustable things when they’re so busy trying to take orders, process orders and collect money – all the chaos that happens inside the restaurant, your digital employer or your virtual assistant can do these things very easily.
It can be programmed to adapt and learn from, and give these QSRs and the individual restaurants flexibility about how they might try to drive some new creative ways to upgrade their order values.
We’re seeing experiences where the brands are seeing anywhere from a 10 to 20% uplift in their total drive-thru revenue output. They’re doing that again for two reasons. One is they’re actually creatively able to get people to buy more, but they’re also able to, – and this gets back to how we’re helping the speed of the overall process shrink the time, actually get more people through the drive-thru process, getting them to buy a little bit more and an aggregate increase in their top line in 10 to 20%.
When the average QSR restaurants are doing a million and a half of same-store sales, when you’re adding 20% to that, that’s pretty significant, especially when the brands multiplied over the two to 3000 restaurants they might have across the country or around the world.
4. Enhance both Customer Experience and Employee Satisfaction
A fourth area is dealing with customer satisfaction when it gets to having employees that may be late in their shift, or maybe have worked a long shift, or it may be so late at night that perhaps they don’t have the tolerance or patience for some of the people coming through the drive-thru, that carries over into how that particular customer is treated.
This sort of negative experience around an employee having a bad day or being at the end of a shift that does have an effect, not only in that particular order, but actually more so in terms of the likelihood of that consumer to come back to repeat their business there in the short term.
Driving consistency of ordinary experience is very important. The digital employee never has a bad day, in fact, the brands can program very much unique personalities and adapt them to different territories of their brands around the country, around the world to actually drive the particular experience and brand identification that they want to create.
Interestingly, not only there is disruption happening from the DoorDashes and the UberEATS and Grubhubs to take people out of the restaurant, but there’s also pressure – at least in the US market, with employment at record high levels. These are businesses that deal with a lot of turnover and churn, so there’s labor pressure and also cost pressure to drive salary increases to keep people within the restaurants working there.
One of the things that taking off the ordering responsibility through the drive-thru can also help is in employee satisfaction. Employees that can have a bad day at the end of shifts, can also get worn down by unreasonable customers that are ordering, especially customers that may be coming in late at night.
Digital employees are actually helping with employee satisfaction in the similar ways that it’s happening with customer or consumer satisfaction, taking both parties out of it and putting that digital employee or that virtual assistant in the middle.
5. Take Advantage of the Customer Data
A lot of different services talk about the voice of the customer and how I can benefit or get value from the voice of the customer. In this case, what we’re able to do, and what we also know, and it’s been proven through a number of studies, is when a consumer feels free to speak their mind.
In the QSR world, they often speak their mind either in real-time, when they go into the restaurant and place their order or they speak their mind when they’re going through the drive-thru experience.
However, in both of those cases, we find that it’s pretty rare that the employee taking the order ever passes along cases where a customer asked for something they didn’t have, or asked for an option that wasn’t available or made a suggestion to the menu that wasn’t in place.
That may get mentioned in real time between the customer and the human employee, but often it doesn’t trickle down or roll up to corporate offices.
But when you’re capturing all of these through voice-enabled experiences, and all of those are archived, and you supplement it with some rich analytics capability (and one of the things that we’ve spent a lot of time in doing is powering insights, or allowing brands to drive insights, from these unstructured conversations), you can learn a lot about what the consumers want, what they’re happy or not happy with.
In fact, as mentioned earlier about trying to drive some proactivity or personalization into the experience, they could test out the reaction that consumers give them when they offer one thing or suggest another.
Digital employees are able to learn and roll that up across all the restaurants around the country or around the world, and actually drive some improvements or try out some new things. So really that voice of customer data that isn’t trickling down from the human employees today, it’s another significant benefit that we’re able to power.