This is the 4th insights digest from Segmanta’s brand new study, The Ultimate Food Survey 2020. We surveyed more than 2,000 U.S. consumers to understand their opinions surrounding their eating habits, lifestyles, fast food consumption, and favorite fast food restaurants, etc.
For passionate foodies, this year has delivered some relatively bad news: restaurants are closed, and eating out is no longer an option.
According to MiQ’s research, foot traffic to restaurants and fast food chains has dropped 45% and 67%, respectively, since the beginning of social distancing. Meanwhile, in a study from FoxBusiness, 74% of Americans claimed to have used a drive-thru either the same amount or more than usual in 2020.
Facing unique challenges, fast food chains recognize the opportunity to upgrade their services and provide a safe, delightful experience while their customers are going through the lockdown blues.
Drive-Thru Beat Home Delivery During Pandemic
Since the start of the COVID-19 crisis, the fast food industry has seen a revenue dip of 30%, but the U.S. fast food brands experienced a surge in demand thanks to drive-thru service.
In our survey, we observed distinguishing changes in eating habits and purchasing behaviors of fast food. Younger Gen Z-ers (15-18 years old) reported a higher likelihood to consume fast food since the global health crisis started and 37% claimed they ate more fast food compared to pre-pandemic. Millennials, on the other hand, reduced their fast food consumption in general in the same period, with only 24% consuming more fast food than usual.
When asked “How do you typically get fast food during the COVID-19 pandemic?”, only 26% of the overall respondents chose home delivery when ordering fast food during COVID. 90% of the older Millennials (30-39 years old) used pick-up or drive-thru to purchase fast food.
More than half of the survey respondents reported that “inaccurate orders” were their biggest pain point when ordering fast food, 33% were not happy with the low service quality, and 28% were not impressed by the “long wait time in line”.
In the era of “contactless” services, drive-thru became the preferred way to order fast food. With the demand for fast food soaring in pandemic times, major chains are optimizing their drive-thru experience to manage the increased orders and to avoid making “fast” food into “slow” service.
Chipotle’s latest strategy of installing “Chipotlanes” in more than 100 locations brought up their sales by 10% during Q2. Taco Bell was famously optimizing its drive-thru service time to under 4 minutes even since before the pandemic by increasing kitchen efficiency and adding ordering kiosks at its restaurants. Starbucks upgraded its coffee machines and introduced an AI-powered ordering system in order to streamline the takeout service. Besides many negative effects of COVID-19, this period actually provided fast food chains a new angle to rethink their marketing strategies, prioritize consumer experience, and adapt to new consumer behaviors.
Fast Food & Digital Acceleration
As mentioned in our previous blog post, Gen Z and Millennials have a digitally-driven lifestyle and we saw increased screen time since lockdowns started, leading to a higher chance to be exposed to online advertising. The digital ads (including TV ads, social media, email promotions, etc.) from major fast food brands are more welcome amongst younger Gen Z-ers (15-18 years old), while other age groups usually do not engage with any fast food advertising.
In the list of fast food brands, Taco Bell’s commercials were by far the most popular (26%) according to the overall respondents. Taco Bell’s TV ad featuring the viral Xbox Series X was their second collaboration after two decades since 2001. In our last insights digest, we showcased the newly formed bond between fast food chains and the gaming industry. In addition to the cross-over marketing effort, Taco Bell tapped into TikTok’s vertical video to recreate the TV ad in the mobile format.
For Taco Bell’s major target audience (18-34 years old), the brand represents an authentic, down-to-earth eating experience with consistent food quality and dynamic ad creatives. Other than expanding to new digital advertising channels, fast food marketers also saw significant sales growth via mobile apps, websites, and third-party delivery partners. Chipotle reported a 140% increase in pickup service after seeing its digital pickup orders shoot up due to short wait times and no delivery fees.
The pandemic has widely reshaped the fast food market and stimulated a surge in drive-thru business for brands. Fast food might just be one of the handfuls of industries that benefited from this unusual time. Innovating traditional fast food services and improving sales with technology and digital solutions will continue to boost the success of fast food chains, especially when restrictions of normal dining are in place.
Marketers can rely on Segmanta’s declarative consumer understanding solutions to observe fast-changing marketing trends and gain timely consumer insights.