Geofencing & Location Intelligence: How Restaurants Can Benefit
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You’re strolling within a McDonald’s vicinity, and your phone beeps. It’s an app notification that says: “Hot Deal! Order through our app now and get a sausage of your choice, a McChicken, or 1 Cheeseburger free!”
This here is a classic example of geofencing. ‘Geofencing’ is the technology behind this highly personalized ad experience. And consumers – actually a good 71% – prefer a personalized ad experience. An average consumer typically spends 5 hours of their entire day in their palm-sized digital device (business2community). And that’s exactly the rendezvous where you as a marketer would want to connect with them.
Before we discuss geofencing’s benefits for restaurants, let’s do a little recap of what geofencing is.
What is Geofencing and How Does it Work?
Geofencing is a location-based service whereby a mobile app or a software program uses radio frequency identification (RFID), WiFi, GPS, or cellular data to generate a targeted marketing action like a text, email, social media advertisement, or app notification (in our case).
So this typically happens when a mobile device or RFID tag enters or exits a virtual geographic periphery, called a ‘geofence’. Once a customer crosses the ‘set’ virtual boundary, their location data is used by the app or software to send real-time notifications to their device or used later for more timely and personalized experiences. Location-intelligent technology services like Bluedot, even let you gamify the experience for your customers, kind of like your favorite coffee seller, Starbucks.
However, the general rule is to keep your geofencing to a four – or five-minute travel radius (walking or driving). The chances of this working are greater if the customers are within the vicinity.
FYI – Geofencing doesn’t require hardware. It is software that can be integrated into your restaurant’s mobile ordering app and managed through an online dashboard or API.
How Top QSR’s are Leveraging Geofencing & Location Intelligence
It’s marketing 101 to target the right audience through restaurant mobile app development. Your business needs to be able to send notifications to consumers without spending a King’s ransom. It’s possible if you use the right technology. What’s more, you will only require a mobile app with geofencing functionality. Geofencing for restaurants opens a myriad of opportunities, allowing restaurateurs to focus their marketing efforts on prospects who are most willing to act while investing and wasting less on those who aren’t.
Most restaurant businesses – from one-location mom-n-pop restaurants to restaurants with many franchises – despite size are leveraging geofencing to market and advertise their brand.
We discussed McDonald’s in the beginning, McDonald’s, initially, played around with geofencing technology in its app to allow customers to create an order anywhere and pay for it through the app upon arrival. It was more of a test to reduce wait lines, cold food, and customer congestion at its franchises. The ones in California and Washington reportedly had the worst customer congestion.
The experiment being a success, McDonald’s decided to leverage geofencing for order-ahead worldwide. The customers cannot, however, order outside a certain geofence. This way their orders are served ‘hot’ as they are prepped based on the customer’s real-time location.
FYI – Dunkin Donuts is leveraging Bluedot’s technology to offer a ‘frictionless drive-thru’. Its customers no longer have to place an order, drive up to the drive-thru, and wait in a long line of cars. Bluedot’s geofencing technology has helped them reduce the lines, identifying the accurate time their customers will drive up to the speaker box, and to the window to get their orders – and it’s contactless pickup!
BK is well known for stealing McDonald’s customers using geofencing. Remember the #whopperdetour campaign? Burger King used its app to alert customers within 600 feet of a McDonald’s location to order a Whopper for one cent via the app. The campaign was a huge success.
FYI- CitrusBits created the Burger King app. They loved it so much, they decided to migrate the users of other apps of their franchises to the one CitrusBits created. Check out the full case study here.
If you’re still wondering ‘why I need to add geofencing capabilities to my restaurant app?’, here are some pros to restaurants leveraging geofencing technology.
How Restaurants Can Benefit From Geofencing
Mobile apps were there before the coronavirus pandemic, however, it was during the pandemic, that consumers looking for contactless solutions started placing orders on mobile apps for safe transactions. With safety protocols in place, most even started going out to pick food from drive-thrus. Restaurant businesses having analyzed this shift in consumer behavior started integrating geofencing technology to refine their operations including in-store management, delivery systems, and drive-thrus, specifically curbside pickups to add convenience and ensure safety.
Today, online ordering – curbside pickup, drive-thru – and delivery – is a restaurant staple and plays an essential role in the customer’s journey.
Geofencing Technology can Help Improve Your Curbside Pickups
With geofencing integrated restaurants can get real-time updates of customers on-route to their fast-food restaurant, allowing the staff to deliver orders as soon as the customer enters the premises. Geofencing integrated into your curbside pickup service will allow for increased operational efficiency, saving you time and money while bringing a great and personalized experience to your customers.
After they integrated geofencing in their curbside pick-up, 65% of Panera Bread’s total revenue came from digital sales only. That’s the difference location-based marketing strategy makes, provided you are doing it right and have the right vendor.
Geofencing Helps Cut down Order Time and Serve Fresh Food
Geofencing can help restaurants prioritize orders making customers happy by delivering fresh and warm food. They can even start preparing orders based on a customer’s exact location from the restaurant to avoid food inconvenience.
Taco Bell is another instance of restaurants using geofencing for hyper-targeted, location-based marketing. They built a restaurant app with mobile ordering functionality.
While its mobile ordering feature entices its regulars to download the app, with the app in place, the restaurant utilizes geofencing to target people under 30 years old by sending push notifications whenever customers are in the vicinity of a Taco Bell.
A quick reminder that Taco Bell allows its consumers to order food from their phone and pick it up two miles down the road. This here is a great way to appeal to the “Want it Now” generation.
Taco Bell recognized its consumer base, used the right tools to communicate with it, and experienced a 6% increase in its annual sales. (bloomberg).
Help Boosts Loyalty and Engagement
Personalized marketing campaigns in a combo with location-based gamification could help you boost customer engagement and loyalty. You could award automated rewards based on your customer’s location for instance when they enter the drive-thru or the parking lot or walk in the store. This would also help drive your restaurant mobile app’s adoption and garner an increased amount of active users. It makes it easier to entice your customers into using that loyalty card or points they’ve earned recently or you could award them a few extra reward points or a discounted purchase.
Helps Offers Frictionless Drive-thru Service from Mobile App or Web
With location technology integrated into your mobile app or website, your customers will simply place an order before leaving their homes or workplaces. Here’s what happens next. Once the location permission has been granted, the QSR anticipating the customer’s arrival will notify the back-of-the-house kitchen, sending the ticket at just the right time.
And with Bluedot’s geofencing solution, after the customer comes to your restaurant’s drive-thru, they will skip the speaker box, skipping the payment windows in the “mobile-only” lane, they stop only at the pickup window where they are greeted by your restaurant’s staff member and are served their freshly prepared order.
They simply order, grab, and go without waiting in a long queue, increasing their chances of coming back AGAIN.
Location Data Helps Learn Customer’s Foot Traffic Patterns
Quick-serve restaurants may use location data to track their own locations and the locations of their rivals. Fast-food chains can get a subjective understanding of customer foot traffic trends between their own stores and their rivals by tracking traffic patterns to specific places.
Location data may also be used to find new potential consumers as well as re-engage those who have become dissatisfied with a brand over time. It also helps you to assess whether unique rewards or promotional strategies are having a significant effect on consumer loyalty and engagement.
Remember the Burger King example we discussed previously? Burger King used geofencing for its Whopper Detour campaign giving McDonald’s good tease amid the process – asking customers to place an order at a McDonald’s location.
It’s ‘King’ for a reason.
Is Your Restaurant Solution Missing this Essential Ingredient?
Location-aware apps, including those that develop food ordering apps, are pivoting change on an industrial level. With countless benefits, they are becoming an essential ingredient in restaurateurs’ recipe of success. Many more restaurants are actively integrating this technology in their mobile ordering systems and restaurant software to improve and strengthen in-kitchen and business operations, attracting and retaining maximum customers for increased sales and their ROI. The ability to provide location-based services and personalized experiences through food ordering apps is revolutionizing the restaurant industry and enhancing the overall customer experience.
If you’re looking to build a location-intelligent solution for your restaurant business or are looking to upgrade an existing one, you can reach out to us for a free consultation. We have ample experience working with Olo, Bluedot, and other popular third-party service providers, and have built business-critical digital restaurant solutions for many of the popular restaurant chains in the US.