Wendy’s Co. ’s new chief information officer wants stopgap measures put in place to serve customers during the pandemic, like curbside and parking-lot pickups, to become permanent features of the fast-food chain, leveraging a stockpile of customer data to personalize services.
“Those are all going to stay around long after Covid goes,” says Kevin Vasconi, who took on the chain’s top enterprise-tech role in October. “A lot of new consumer behavior is going to stick around, too” he said.
Wendy’s saw a 15% increase in app downloads between July and October, though its digital business accounted for just 5.5% of total third-quarter sales. Still, that was up from 5% in the April-June quarter, and more than double the share for all of 2019, the company says.
Among other plans, Mr. Vasconi said he wants to develop artificial-intelligence-enabled apps that can learn to better predict customers’ taste by analyzing patterns in past orders. Online ordering software should know not to upsell a soft drink, for instance, if a returning customer has never purchased a soft drink with a meal before, he said.
Wendy’s CIO Kevin Vasconi
Photo: Wendy’s Co.
The goal is to get orders to customers as fast as possible—no matter how they ordered it or how they want it delivered, he said.
A former CIO at Domino’s Pizza Inc. who once tested pizza delivery by autonomous drones, Mr. Vasconi says he spent the past few months reviewing Wendy’s information-technology systems, with an eye to boosting customer services through digital tools and data.
“The fact of the matter is digital is the way everything is going to be purchased,” he says. “The more digital you do, the more data you get.”
At Domino’s, where he led IT for eight years, Mr. Vasconi oversaw the chain’s global tech initiatives, the bulk of which involved developing digital channels for online ordering and mobile apps. The apps, which allowed mobile check-in, carside pickups and other touchless transactions, were aimed at reducing the time it takes to get pizzas into customers’ hands: “All food is better fresh,” Mr. Vasconi says.
In 2019, the year before Covid-19 struck the U.S., Domino’s generated roughly 65% of sales from digital channels, according to a company spokeswoman. All the work on digital-driven services meant the pizza chain already had the infrastructure and software in place last year to help when dine-in restaurant restrictions were imposed in efforts to contain the virus.
That had a devastating impact on the restaurant industry. Total sales in the U.S. restaurant and food-services industry fell by $240 billion in 2020 from the previous year, compared with an opening-year forecast of $899 billion, according to the National Restaurant Association, an industry trade group. By December, more than 110,000 eating and drinking places closed, either temporarily or for good, the group said.
In July, NPC International Inc., the nation’s largest Wendy’s and Pizza Hut franchisee, declared bankruptcy, citing more than $900 million in debt and a steady business decline. The company has since agreed to sell roughly 1,500 restaurants in separate deals to Flynn Restaurant Group LLC and Wendy’s International LLC.
Wendy’s in November reported year-to-date systemwide sales growth of 0.5%, compared with 4.1% over the same period a year earlier.
The downturn is prompting many fast-food chain operators to accelerate efforts to improve off-premises and contactless capabilities—or grab-and-go services where customers quickly pick up mobile orders at the counter. That is fast-tracking the widespread adoption of technology across the industry, according to Max Hammond, a senior director and analyst at IT research and consulting firm Gartner Inc.
“They’re rethinking their business model,” said Mr. Hammond, who covers digital technology in the quick-service restaurant sector. “It’s all about the speed of service,” he said.
“ ‘The more digital you do, the more data you get.’ ”
A key competitive area, he added, is how different restaurants are converting the flood of data from incoming orders over different digital channels into speedy deliveries. That can involve the use of AI-enabled software to identify and route orders to the right kitchen stations, robotics and other forms of automation to prepare meals, and mobile devices that tell servers where and how an order will be picked up.
Brendan Witcher, vice president and principal analyst for digital business strategy at enterprise technology research firm Forrester Research Inc., said the software underpinning services like curbside pickup can be up and running in just a few days. But, he added, restaurants are seeing mixed results from these efforts, even among different operators within the same chain.
Mr. Vasconi said demand from customers for contactless, frictionless interactions has accelerated, fueled by pandemic restrictions.
“Digital has redefined convenience, providing new ways for us to meet consumers on their terms,” Mr. Vasconi said.
How long before takeout burgers are delivered by robot drones or self-driving cars? Mr. Vasconi said he is bullish on all autonomous vehicles. “The rate and pace of change in that technology is amazing,” he said.
Write to Angus Loten at [email protected]
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