Wingstop announced that it is shaking up its management organization to bring marketing and information technology closer together. Noting that 25 million consumers are now placing orders on the brand's digital platform and that 65% of orders are now digital, Wingstop stated an audacious goal of achieving 100% of orders being digital.
The bold move not only represents a major salvo in the rapidly escalating digital arms race underway in the QSR market, but it's also evidence of brands' awakening to the power of one-to-one marketing and why it's vital to focus marketing resources beyond traditional mass-marketing approaches.
The digital arms race
Many brick-and-mortar brands learned the hard way during the COVID-19 pandemic that the sure-fire, mass-media avenues they've used for decades, such as live sports sponsorships on television, suddenly failed to reach their audiences.
Meanwhile, brands that built priceless first-party data by investing in their owned media channels — including text messaging and email clubs, loyalty programs and branded apps — retained far greater control in reaching their customers, especially during the pandemic when speed to communicate was critical.
Dining rooms closed? Orders only accepted online or via the app? Hours trimmed? No problem. Brands could use their owned media channels to reach the customers whenever and as frequently as required, without having to rely on paid media to get the word out.
Furthermore, COVID restrictions forced consumers to transact via low-touch technologies, such as ordering online, delivery and curbside pick-up. The resulting major shift of customers to digital channels put brick-and-mortar brands into a full-scale scramble, fighting to catch up to consumers' skyrocketing digital expectations.
Think about it: Before the pandemic, how often did you place an order online or in-app from your favorite QSR brand? For most of us, the answer is literally never. We simply hopped in the car, went through the drive-thru to order and pick up our food. But now, even as in-person dining options have returned (at least for the moment), digital ordering now represents 28% of all orders compared with 10% before the pandemic, according to the Boston Consulting Group.
This digital awakening of consumers represents both opportunity and risk to QSRs. For those that are able to respond and enable consumers to transact and communicate digitally and to do it well (i.e., provide Amazon-like experiences), they can seize the opportunity for growth. But that same digital awakening also means that their once-loyal base of customers who defaulted to the convenience of the two or three closest drive-thru windows may not be so loyal now.
Ordering online and picking up curbside or having DoorDash deliver opened up numerous other possible options for lunch or dinner. Go another mile or two past your closest options, and in most places, you'll be presented with another dozen viable options to choose from.
The mass exodus from offices to working from home also changed up the options and put customer loyalty at risk. In fact, first-time guests accounted for more than 65% of all online orders this year, according to Paytronix’s Order & Delivery Report, and 81% of QSRs report that their customer bases had shifted as a result of the pandemic, the National Restaurant Association reported earlier this year.
Wingstop’s reorganization is evidence of QSR brands realizing that they must embrace structures that align IT and marketing functions similar to that of a tech company. Brands are competing with loyalty programs and ramping up investments in digital channels and owned media in a race to build a treasure trove of first-party data. First-party data will grow more critical than ever in a digital-first world and one soon without the ability to target consumers with the tried-and-true third-party cookie targeting many brands have relied on in their digital advertising.
Validation for the importance of one-to-one marketing
Perhaps the most eye-opening sentence in Wingstop's announcement was its plan to have two distinct agile and collaborative teams that focus on varying levels of communication to guests. "One will lead 'micro,' one-to-one communication, and one which will lead 'macro,' one-to-many communication." Hallelujah!
I am excited to see brands finally making the transition from mass marketing to one-to-one marketing and organizing teams around the concept. The QSR industry has spent decades hellbent on coming up with the next great catchphrase ("Where's the beef?") and spending significant portions of multi-million-dollar marketing budgets on television and other mass media in order to secure the greatest consumer share of mind. They measure success by decades-old measures of reach and frequency.
Sometimes it's like you can hear the sound of the needle scratching on the record when talking to brands about text message marketing. An owned media channel like SMS won't blast 30-second TV spots to 100 million consumers. Instead, you build a highly curated, loyal-yet-relatively-small audience of several million consumers with which you can build one-to-one engagement and relationships. Too often, for traditional marketers, their perception is that it just doesn't seem the "juice is worth the squeeze" (one of my favorite expressions I picked up from living in the South for a few years).
Yet, the world has changed. Consumers are now in control of what, when and where they digest news, content and entertainment. Unlike my generation who planned our weeknights around when our favorite "must-see TV" shows were on and dreaded cliffhangers that wouldn't be resolved until the fall when the new season debuts, my 20-year-old has no idea what day, night or even network her favorite shows are on. She streams everything on every device at any time and in any order she chooses. One-to-one marketing is the only way you're going to reach her.
More QSR brands are starting to see the power of one-to-one marketing. Kim Lewis, VP of Digital Strategies for Inspire's Sonic Drive-In, recently said during a conversation for MediaPost, "While email is a fairly impersonal relationship, SMS is a fairly intimate relationship and requires quite a bit of trust." She says that it's "one of one of our very most powerful communication channels," and instead of measuring success based on audience reach and frequency, the company actually employs CEO-focused measures like guest frequency and sales lift. "Literally the second we hit that button we start to see guests ordering that item and redeeming that offer at the drive-in."
I tip my hat to the leadership of Wingstop for recognizing that the traditional one-to-many mass marketing techniques aren't the only way to build a brand and sales in a digital-first world. And, with this announcement, it is making a meaningful organizational change to embrace one-to-one marketing. Especially in the world of QSR marketing, where the majority of the eggs have been placed in the mass marketing basket for so many years. Expect to see others follow.
Chuck Moxley is a marketing leader with 25-plus years’ experience developing innovative marketing programs for dozens of B2B/SaaS companies and consumer brands. In addition to SVP of Marketing at Mobivity, he is one of the nation’s leading experts on the convergence of technology and marketing and co-author of Audience of One, a book on breakthrough marketing strategies to change consumer behavior and drive revenue to the bottom line.