Wendy's is using loyalty incentives and extended delivery hours during the late night to promote digital engagement and, consequently, enhance overall sales.
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GLOWendy’s is using loyalty incentives and extended delivery hours during the late night to promote digital engagement and, consequently, enhance overall sales.
The renowned quick-service restaurant (QSR) chain, with a presence in over 7,000 locations worldwide, reported in its third-quarter 2023 financial results on Thursday, November 2, that it has experienced sales growth, primarily driven by its emphasis on digital initiatives and customer loyalty.
Wendy’s President and CEO, Todd Penegor, mentioned during an analyst call that they have successfully enticed customers into their mobile app by offering compelling discounts and values. Their aim is to increase app usage because they have observed that customers who engage digitally tend to visit more frequently and spend more over time.
Penegor acknowledged that loyalty programs may result in a slight dip in check values initially, as new members redeem introductory offers, but this is compensated for by the long-term value these customers bring, as they become more frequent visitors.
In the quarter, global digital sales accounted for 13% of total sales, with 12% in the U.S. and 18% internationally, reflecting a 30% year-over-year increase, as per information shared with analysts. Consequently, the company anticipates that global digital sales will reach $1.8 billion for the entire year.
Wendy’s loyalty program played a pivotal role in this success, boasting over 35 million U.S. loyalty members and a 40% growth in monthly active users in a quarter-over-quarter comparison.
A study by PYMNTS conducted in March 2023, referred to as “Connected Dining,” based on a survey of over 1,800 U.S. consumers, found that 51% reported using at least one restaurant loyalty program, with a significantly larger proportion doing so at QSRs compared to full-service restaurants (FSRs). It also revealed that adoption of QSR loyalty programs had increased by 15% year over year.
Wendy’s is capitalizing on digital opportunities by specifically targeting late-night delivery expenditures by consumers.
Penegor noted that late-night dining remains a rapidly growing segment of the QSR industry, with Wendy’s outperforming the category in this regard. There is considerable potential to maintain and build on this momentum. Late-night business provides a significant volume increase without the need for additional labor, and it has shown a promising average check size.
Looking ahead, Wendy’s plans to continue driving digital growth.
Penegor emphasized, “Looking ahead, there is still significant digital growth to be captured. The large uptick in monthly active users last quarter and the increase in our digital sales expectation is just the taste of what’s in front of us. I am confident that continued execution of our plans alongside our key partners will drive our digital business in the years to come.”
