Mobile Apps Boost Sales at Starbucks, Taco Bell, Domino's

Mobile apps have become an increasingly popular tool for chains, which often use them to distribute coupons, announce new products, and facilitate rewards programs. But research suggests that, for restaurants, mobile apps engage consumer behavior in an even more significant way. Consumers who order Taco Bell via the company's app, for instance, will likely spend more than those who order at the drive-thru window.

Worth noting is that mobile apps only translate to higher sales if the app is well-designed. That's according to a new report from ARC (Application Resource Center), the research arm of digital quality and testing company Applause, which ranks the apps of the top 55 restaurant chains.

The report utilized software that works to sift through app store ratings and user reviews to quantify each app's quality on a 100-point scale. "It's basically a big data tool that crawls app store feedback," says Ben Gray, a Digital Experience Analyst with ARC's parent company, Applause.

The result is a list that reveals a stark contrast between mobile leaders — Domino's, Starbucks, Pizza Hut, and Taco Bell — and brands that lag behind in terms of mobile engagement.

Gray says that, when done right, mobile apps can be effective at both engaging customers and profoundly impacting a restaurant's bottom line. At Starbucks, mobile app orders accounted for 21 percent of the company's U.S. transactions in the first quarter of 2016. Use of the coffee chain's mobile order and pay feature — which currently represents more than 10 percent of total transactions at high-volume Starbucks stores — directly contributed to increased sales across the board.

More than half of U.S. sales at Domino's — which offers mobile ordering and payment through some 15 platforms, including text, smartwatch, and a "zero clicks required" mobile app — are driven through digital engagement.

Fast-food restaurants tell a similar story. "Taco Bell's average orders, for instance, were twenty percent higher on the mobile app than in retail stores," says Gray.

Starbuck's, Domino's, and Taco Bell all scored high on ARC's report. The average mobile sentiment score of an app on the list was a 67.3. Domino's, whose app has some 311,000 reviews, scored an 85.3. Starbucks and Taco Bell scored 63.5 and 55.8, respectively.

Other companies that came out on top? Jimmy John's, Five Guys, Pizza Hut, and Moe's Southwest Grill, which scored a 55.8. Its competitor, Chipotle, scored a 43.

Among the apps that have room to improve, according to ARC's report, is McDonald's. Despite being the most profitable restaurant chain in the world, the fast-food behemoth saw a 31.7 mobile sentiment score, relatively low compared to many of its competitors.

According to Gray, McDonald's and other low-scoring chains suffer from a lack of key features, like the ability to order ahead, as well as discounts and loyalty programs. "The lowest-rated apps also suffer from being slow or having defects," he says. "Frankly, they also aren't very elegant or beautifully-designed." Moreover, the report suggests that those low-scoring apps are getting surpassed by competitors.

As it turns out, many app reviews tell a bigger picture — one not just about the specific app being reviewed, but about apps that are better. "A big challenge among the laggers was, from a features perspective, they couldn't compare to the leaders," says Gray. "Let's face it: consumers are impacted by what the competition is doing. Let's say I regularly consume burgers from Burger King and Five Guys. I know that, with the Five Guys app, I can skip the line and walk away with my burger and fries in less time. Burger King's app, on the other hand, only offers coupons."

When searching for key words, Gray found that many reviews included references to other brands. "When you look at Burger King reviews, you often see frequent comparisons to brands like In-and-Out," he says. "At Taco Bell, there are lots of references to Chipotle and to Moe's."

Not only is consumer perception heavily impacted by a brand's own applications, but it's significantly influenced by what the competition is doing. And the brands doing the best all have one major thing in common: rewards.

"The brands that supported loyalty programs, digital coupons, mobile payments — those tended to score considerably higher than the rest. That's where Domino's, Taco Bell, and Starbucks really stood out over the rest. I think that's the future of this industry."

Brands have already begun to take note of the trend. Just days after it introduced an app offering both pay-ahead mobile ordering and a rewards program, Chick-fil-A's One app rocketed to the top of iTunes most downloaded chart. Though numbers haven't been released yet, Gray says he wouldn't be surprised to learn the app has lead to more sales for the chicken chain.

It seems the most successful apps tap into a seemingly counterintuitive trend: people will spend more money in the hopes of one day earning free food.

"The Chick-fil-A app almost immediately hit number one, simply because they added support for loyalty programs," he says. "The more chicken sandwiches you buy, the closer you'll be to earning free food." And, as the saying goes, the best things in life are free.