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Wendy’s eyes personalized mobile commerce with nationwide payment launch

March 24, 2014

The Wendy's mobile app

Wendy’s has rolled out mobile payments to all of its United States locations, giving the brand a first-mover advantage in the quick-service restaurant space as well as early insight into how Bluetooth, Wi-Fi and other types of technology can improve the in-restaurant experience.

Eighty-five percent of Wendy’s locations in the United States began accepting mobile payments one week ago through the company’s branded iPhone and Android app, with the remaining percent joining soon. The payments currently rely on a six-digit, one-time code, but the quick-service restaurant is also testing other types of technology to cut down on the number of steps involved in paying for a meal.

“Right now you’re using a six-digit code to connect to the POS — we may use Bluetooth, for example, instead of a six-digit code,” said Brandon Rhoten, vice president of digital at Wendy’s, Dublin, OH.

“We may use Wi-Fi, we may use the toll tags that people have in their cars when you have tolls on your highways,” he said. “We’re testing several options that would allow people to interface with the restaurant in whatever format they prefer — this will take other forms in the near future.

“[If] you look at what Apple is doing with iBeacon, for example, we’re testing technology like that that would allow you to leave your phone in your pocket when you come into a Wendy’s and still make a payment if you want, place your order that you’ve previously configured or get your rewards, offers [or] whatever you want to do.”

Wendy’s claims to be the world’s third largest quick-service hamburger chain.

Mobile burgers
Wendy’s initially began testing mobile payments in the U.S. last year with a pilot program in Austin, TX; Portland, WA; and Albuquerque, NM (see story).

For the past year, the focus of the pilot has primarily been around training employees and making sure that the nuts and bolts behind the technology was ready to be rolled out nationally.

According to Mr. Rhoten, one the main learnings over the last year is that mobile payments are bringing in repeat sales.

At the same time though, Wendy’s realizes that the revenue around mobile payments will be small initially.

“We’re not expecting 50 percent of our business to convert over to mobile pay in the next month,” Mr. Rhoten said. “We think that this will grow slowly like credit cards grew slowly, but we know that in order to be a player in the space, you have to provide the technology people are wanting, and this is the sort of technology people are asking us for.”

A screenshot of the time-sensitive code

Consumers first load funds from a credit card or a Wendy’s gift card within the app — similar to how Starbucks’ technology works — to make a mobile payment.

However, the difference between the two brands’ mobile payment systems is that the technology within the Wendy’s app uses a time-specific code instead of a bar code. The rationale behind the unique codes is that it does not require consumers to hang a mobile phone outside of their car when going through a drive-thru.

The payment is triggered by swiping a finger across the screen when a consumer is ready to pay. A six-digit, one-time code is then displayed on the screen for five minutes that is typed into the point-of-sale system by an employee.

Additionally, diners can pick out meals and configure calorie information with the app, and will eventually be expanded to include ordering.

Similar to other QSRs, the challenge behind adding mobile ordering is that the brand’s products cannot be made for long periods of time ahead of when an order is placed.

Wendy’s joins a growing list of QSRs that are increasingly rolling out mobile payments nationally.

For example, Burger King plans to roll out a digital platform that incorporates mobile payments and offers nationally this year (see story).

McDonald’s, Chipotle, Chick-Fil-A and KFC are also experimenting with mobile payments and loyalty at different investments.

Another screenshot showing the mobile payment feature

Mobile-based loyalty
Wendy’s will promote mobile payments with digital advertising and calls-to-action in emails, on the company’s Web site and with in-store marketing.

Wendy’s does not plan to put a ton of marketing muscle into mobile payments initially though because the brand is building out a bigger mobile program that incorporates a loyalty program and rewards with customized offers.

In-store signage

The fast food chain is beginning to test tailored offers for its My Wendy’s reward program by asking consumers what types of deals they are interested in addition to looking at purchase behavior.

The idea behind customized offers is that Wendy’s sells everything from salads to bacon cheeseburgers, so the rewards and deals that the chain sends out should match up to individual purchase behavior.

“We wanted to build a system that actually understood what you want — and would ask you for preferences, for example — and understand based on your transactions what you want from the brand,” Mr. Rhoten said.

“That’s what we’re going to be testing in a couple of months in 300 restaurants,” he said.

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