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03.25.21

The Future of Retail: QSR

by Brandon Gredler

Consumer Privacy or Personalization: Which Will Win?

Restaurants have historically focused on giving you what they think you want. What if they could give you what you need

Since the pandemic started, many restaurants have shifted their offerings in an effort to survive and to meet the current needs of their customers. Some took to selling raw goods, like flour, eggs, and jarred sauces, and that expanded offering — based on their customers’ real needs — will likely endure. 

In my conversations with restaurants, much has shifted over the last year. Many swore they would never succumb to online ordering, curbside pickups, or drive-throughs. Now, forced to evolve during the pandemic, they’re rethinking or fully embracing these expanded outlets for sales and customer engagement, and that isn’t likely to reverse when the world reopens. Trends like drive-through innovation, contactless pickup, personalized digital menu boards, branded mobile app reliance, and digital order status notifications are all gaining steam.But to continue expanding these offerings, restaurants must anticipate customer needs, not just react to them. Technology is their best ally in this effort, but it’s complicated.

Consumer Privacy vs. Convenience

One of the biggest themes and debates within Big Tech and our relationships with it is the push/pull between consumer privacy and convenience, and in the QSR space, brands like Taco Bell, McDonald’s, and Chipotle are implementing new changes to maximize customer convenience and business impact. In general, we’re creeped out by technology that feels too much like Big Brother surveillance — until we realize the reward might make the lurking invasions seem like a worthwhile trade-off. Ad tracking is a common example: Our initial reaction to targeted advertising can be negative and defensive. But when we’re shown that perfect item we’ve been searching for, those frustrations melt.

Facial recognition is particularly controversial. For restaurants, recognizing a repeat customer when they walk in enables advantages for both the restaurant and the client: faster, more customized service, with anticipatory questions and offerings. But events like the Hong Kong protests put facial recognition in the spotlight. Privacy issues mounted, and the technology received valid pushback. In the U.S., its legality also varies significantly from state to state, furthering complications. Whether that technology can be transformed into a welcome part of customers’ QSR experience remains to be seen, but is possible.

License plate recognition technology is another path toward anticipating needs. With a high rate of accuracy, QSRs could identify customers in the drive-through line, then remind you of your previous orders, and perhaps eventually offer a customized menu that highlights your dietary preferences. Some brands are already utilizing Bluetooth technology to communicate with consumers from mobile app to digital signage, but the opportunities are still widely untapped.  

Hyper-personalization Is the Future

Face and license plate recognition are just the beginning of the movement toward anticipatory, personalized offerings. Biotech companies may start to team up with QSR brands to turbo-charge customers’ individual selections. Imagine getting personally-customized suggestions and menus, not just based on past orders, but based on your biology. If a customer trusts 23andMe and trusts Chipotle, they could opt-in for 23andMe to share genetic info with Chipotle, who in turn could use that data to create dietary recommendations and hyper-personalized offerings. They might see that someone is deficient in certain nutrients that can then be offered in their meal. When each visit to a QSR feels like a check-in with your nutritionist, the enhanced experience and subsequent loyalty will likely outweigh privacy concerns for many. Companies like GenoPalate and DNAfit are already exploring these possibilities. 

A connected system of wearables could facilitate these offerings, logging age, body composition, vitamin deficiency, and more, and when shared with curated brands, customers reap the rewards. Apps like The Coach assess who a customer is and what they’re concerned about, tracking and assessing sleep, diet, exercise, and more. The more information is shared, the more personalized the recommendations are. A customer could decide that information is too private and opt-out, but more likely, will acclimate to sharing as the tips, advice, and programming cater to their needs. 

More apps and companies will likely partner with QSRs as they search for ways to not only appease their taste buds but to establish themselves as wellness partners. Whether through an app or via another central location where personal information is stored, customers will likely have the ability to throttle access to their data and opt-in permission for specific, trusted brands to access it — perhaps via a sort of Chrome extension for all your trusted brands, or as an AWS opt-in feature. 

Customers give hyper-personal information to companies all the time, but as the potential benefits become apparent, their willingness to expand their circle of trust will increase.

The Consumer Privacy Problem

All of these possibilities are challenged by the new iOS 14 update, which offers “app tracking transparency” — meaning apps will need explicit permission before using tracking data for targeted advertising. This gives users more control over who has access to their data and for what purpose. (Facebook is not pleased.) Will consumers win with this update? The update is a hindrance to the kind of hyper-personalized, customized recommendations and offerings companies like QSR could offer their clients. But it is still possible, assuming customers trust the brand. With the iOS 14 update, brands have added pressure to establish a transparent, trustworthy relationship with their consumers. So while it does create an additional hurdle, it in no way eliminates the possibilities.

Brandon Gredler