Restaurant Brands: Here’s How Tim Hortons Can Benefit From Its Digital Initiatives
After several delays, Tim Hortons, the restaurant chain owned by Restaurant Brands International (RBI) (NYSE: QSR), finally launched its mobile order and pay system a few weeks back. While this launch was delayed due to franchisee training issues and competitors such as Starbucks are already offering the convenience of mobile ordering to their customers, the mobile app will give Tim Hortons better access to customer data which can be used for improved customer service. In its Q2 2017 results, McDonald’s highlighted the benefit of gathering customer data and tweaking its offerings based on customer preferences. This strategy helped McDonald’s in retaining its existing customers and increasing guest count. A significant advantage of a digital ordering platform is to understand customer preferences and improve menu offerings accordingly. We believe while “order ahead” is a necessity for restaurant companies to ensure a high level of customer convenience, data analytics and personalization via a digital platform can become a bigger advantage for Tim Hortons in the long term.
Higher Personalization, Loyal Customers, Improved Offerings
The “convenience” advantage of mobile ordering has been neutralized as nearly 50% of fast casual restaurants now offer a digital ordering platform. However, companies are using the data collected via these platforms to their advantage and Tim Hortons’ ability to gather insights from this data and tweak its offerings accordingly can lead to a significant advantage for the company. Digital ordering allows companies to generate a data mine of orders placed and customizations made by customers and their ordering pattern. This data can be used effectively to make menu and service changes. Further, customers can be offered personalized orders based on their past history making the process more engaging, increasing customer loyalty.
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Since the beginning of 2017, Tim Hortons has been facing a decline in comps and the company attributed the underperformance in Q2 2017 to its baked goods and lunch categories in Canada which did not perform as per expectations. Further, the company’s promotions in this division did not show the desired results. A digital platform can aid the company in tweaking its menu and promotions in accordance with customer preferences.
As Tim Hortons looks to develop a competitive edge against other players to drive customer traffic, digital initiatives can help the company to analyze customer behavior and improve its offerings accordingly. Customer convenience is an additional benefit, however, this is now a necessity in the fast casual segment.
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