Subway wants to change how its customers buy their sandwiches.
The Milford, Conn.-based sandwich giant this week said it created Subway Digital, a division at the company that organizes its customer-facing digital technology under a single group.
That group has a broad mandate: To use digital technology to change the customer experience inside its restaurants.
“It’s less about technology and more about evolving the guest experience,” said Carman Wenkoff, Subway’s chief information officer. “The world has changed. This is an acknowledgement that we want to change with the world and be ahead of the curve.”
The chain has big ideas for the new digital team, and it is working with a sense of urgency to change how customers interact with the 44,000-unit concept.
“Our goal is not just small progressions, but a fairly radical transformation of the guest experience,” Wenkoff said. “This will include whatever digital and technology elements are integrated with the restaurant. It’s well beyond menu boards or kiosks.”
Subway created its new digital division while working with Accenture, a New York-based strategy and consulting firm. “Consumers expect their experience to be personalized and the new standard is set by companies innovating with digital technologies,” Brad Humphries, Accenture’s retail lead for North America, said in a statement.
Subway already has a lot of digital efforts. The chain has a smartphone app, and added mobile payments to that app in 2014. Wenkoff said the digital group will look at “every part of the app” and might “significantly” reengineer parts of the app to change the customer experience.
Subway has also had a loyalty program that goes back a decade. The digital team will look at reinventing “the concept of loyalty” so that it provides a “very good, consistent experience” regardless of which how the customers use the loyalty program.
“We want to make sure it’s a unique experience, not one-size fits all,” Wenkoff said.
The team could also look at kiosks, an idea gaining some steam within the quick-service restaurant business as a way to potentially speed service or change the customer experience.
Panera Bread is adding kiosks at many of its locations through its Panera 2.0 remodel. The Wendy’s Co. has said it will enable franchisees to start adding kiosks in its locations this year. Newly created concepts, like San Francisco-based Eatsa, use kiosks exclusively.
Subway tested kiosks years ago “but it was a little too early,” Wenkoff said.
“There’s a place for kiosks in our future,” Wenkoff said. “It’s not an immediate priority, but we will be developing strategies around it.”
Subway is working to get itself out of a sales slump that has halted the chain’s legendary growth in the US. Its domestic unit count fell slightly last year as the chain stopped developing to focus more on improving unit volumes.
Under CEO Suzanne Greco, the chain is upgrading its menu, removing artificial ingredients and adding premium products.
“We’ve worked to provide guests with a fresh and innovative experience for 50 years,” Greco said in a statement. “We were the first to bake bread fresh daily, and the first to offer guests the opportunity to customize their sandwiches. With the creation of Subway Digital, we are committed to making the guest experience as meaningful, convenient and contemporary as possible, across all channels.”
Reinventing itself on the digital front would be a huge change. And some restaurants have successfully pulled in customers by making it easier for them to get their products. Domino’s Pizza Inc., for instance, as well as Starbucks Corp., have both generated sales through technology.
At the same time, using digital to make it easier for customers to order food and to give them incentives to come back is a defensive strategy. Customers simply demand such things these days.
“We’re very optimistic that layering on a good, comprehensive digital strategy is going to lead to a great guest experience, and that will increase sales and increase average ticket,” Wenkoff said. “We’ve got our goals set quite high on that.”
The challenge for Subway is that it’s a 100-percent franchised operation, which can make it more difficult to integrate all technology at the store level. But Wenkoff said that franchisees have been involved “since day one.”
“They have a front-row seat and continue to be involved,” he said.