Restaurants are leveraging conversational commerce to drive new customer experiences in 2023

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To drive revenue growth, build customer loyalty, and boost customer engagement, restaurants are seeking ways to remove friction from experiences. Conversational commerce is emerging as an innovative way for restaurants to achieve this, while also enabling them to overcome the significant labor challenges faced.

Many of the leading brands, in the quick-service restaurant space, have already deployed conversational commerce capabilities into their operational mix to drive innovative customer experiences.

• Panera Bread, for instance, announced that loyalty members can ask Alexa via Echo Show devices to order lunch. The conversational commerce capabilities, announced in March 2023, have been developed in partnership with Amazon. However, for consumers to place orders through Alexa, they will first have to store a payment method with the Echo Show account. Moreover, if the order is a delivery, customers will also have to store their address in the MyPanera account.

Before launching the conversational commerce service, Panera worked with Amazon to help Alexa learn the menu. The feature also enables customers to ask for customizations, if needed. Furthermore, Alexa can also assist customers in tracking their deliveries. Currently, conversational commerce capabilities have been launched only for MyPanera members.

Alongside Panera Bread, Chipotle, Domino’s, and Checkers & Rally’s are among the other fast-food restaurant chains that are using artificial intelligence-powered voice bots to take customer orders. This trend is projected to pick up further momentum in the United States in 2023, as conversational commerce continues to become widely popular among shoppers in the North American market.

Yum Brands, the parent firm that operates KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill, has significantly invested in the conversational commerce segment. This investment has driven positive results for the quick-service restaurant giant.

• While discussing its Q4 2022 results in February 2023, Yum Brands announced that its conversational commerce platform Tictuk is driving the digital customer base and sales. In 2022, the firm processed millions of orders through Tictuk. This shows that conversational commerce has the capability to drive incremental revenue for restaurants.

• The launch of the chat ordering feature in KFC Mexico resulted in over 90% of users who made transactions through the chat channel being first-time digital customers, indicating a high level of adoption of the new feature. At the end of 2022, the technology was live in more than 3,200 stores across 49 markets. In 2023, the firm is planning to add conversational commerce capabilities to another 1,000 stores.

At a time when inflation is rising and consumers are subsequently cutting down on their restaurant spending, such conversational commerce capabilities have been shown to drive incremental revenue by creating innovative experiences for customers. Consequently, PayNXT360 expects more players in the quick-service restaurant industry to implement conversational commerce strategy into their marketing mix to drive revenue and sales growth, while also enhancing engagement with customers.

Not just restaurant brands, but even retail giants such as Walmart are launching conversational commerce capabilities. This shows that the new way of commerce is certainly on the rise.

• In January 2023, Walmart announced the launch of a text-to-shop feature, enabling customers to shop for their favorite in-store products through text. Currently, the firm has launched a shopping experience for customers in the United States. However, with the growing momentum in the space, PayNXT360 expects Walmart to roll out the facility in more of its worldwide markets.

The entry of all of these big retailers and quick-service restaurant brands in the segment means that the investment in the conversational commerce space is expected to grow significantly over the next three to four years. This will subsequently also lead to the growth of the overall social commerce market from the short to medium-term perspective, while also driving innovation and a competitive landscape in the segment.

To know more and gain a deeper understanding of the social commerce market in the United States, click here.