As quick-service restaurants increase their support for buy-online-pickup-in-store—as Starbucks did last week and as Taco Bell is doing this week—they are pushing customer convenience and reduced lines.

But such moves also allow these chains to influence tender types, with cash-intensive businesses such as Taco Bell able to convert many of these coins and greenbacks into more profitable debit and gift card transactions. The fraud and inefficiency of handling cash is so onerous that even interchange-laden credit card charges are a welcome replacement.

Taco Bell, which wouldn't discuss the stats behind its efforts at turning cash into cache, uses mobile geolocation to make sure that freshness isn't lost when taco orders go digital. The chain even sets the distance for the final order greenlight at an almost-in-the-parking-lot 500 feet, according to Tressie Lieberman, vice president of Digital Innovation and On Demand at Taco Bell. "We verify that people are actually there before the order is placed," she said.

Taco Bell launched its web order online site (www.ta.co) Monday, but it has supported digital ordering (for later pickup) on its mobile devices since August 2014. Those mobile pickups were associated with 3.7 million downloads, Taco Bell said.

Customers didn't simply take the orders they were placing in restaurants and process them digitally. As the order-placement moved from in-store to digital, the order/check-size grew 30%. Why? When Taco Bell investigated, it was attributed to a single cause, Lieberman said: customization.

There are two psychological dynamics at play here. First, as the Wawa convenience chain discovered more than five years ago during some early food-ordering kiosk efforts, customers tend to be much more comfortable piling on the side orders and adding extra cheese when interacting with a computer rather than a person. Secondly, the app and the site allow for the customer to peruse every possible option and side-dish, something few would dare do while standing in a long line in a store. And aside from those psychological factors, the digital interfaces simply make it much more practical to view every possible item and to mix and match. Result? Bigger orders.

"People love to make something uniquely theirs. In the subculture, it's called hacking the menu. It unlocks the entire Taco Bell kitchen," Lieberman said. "You can make anything vegetarian or add more meat. You can do extra add-ons like a 7-layer burrito adding on potatoes, bacon. You see a lot of menu discovery."

Some customers don't even go into the store, opting to use a drive-thru instead, she said.

One of the goals at Taco Bell was to integrate mobile and desktop Web—and, eventually, wearables—with "one login that will work regardless of how you engage," Lieberman said. That's important because the geolocation verification means that even orders that start on a desktop will become mobile when the order is picked up, meaning that a seamless handoff from one channel to the next is critical.

Given the high-tech nature of Taco Bell program, the system does not yet support texting. That means that a customer must intercept e-mail to interact with the app at the final stage, when the system asks for permission to complete the order—a request that isn't made until the system determines that the customer is within the aforementioned 500 feet.

The chain has also yet to support mobile wallets, either through NFC (Apple Pay, Google Wallet) or QR code (MCX's CurrentC), although Samsung Pay should work in many locations. When asked why the chain hasn't engaged with mobile wallet experimentations, she offered "We just started testing Visa Checkout."

 

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry