Taco Bell, a division of Yum! Brands, Inc. (YUM) has recently announced the launch of a mobile app that facilitates food customization, ordering and payment. The app is available for Android and iPhone users and works for both in-store and drive-through purchases. The app will also offer deals that are not listed on restaurant menus.
Adding mobile ordering to the Taco Bell app is part of Taco Bell’s plan to increase system-wide sales to $14 billion by 2022 with 2,000 restaurant openings and technology improvement.
Most of Taco Bell’s orders are drive-through and more than half of its in-store purchases are takeaways indicating that customers are opting for fast service. Therefore, lowering waiting times for customers could be a key to driving profitability for Taco Bell.
Customers can pay for takeaways or in-store orders through the new app using credit cards or Taco Bell cards before arriving at the restaurant. Though the app does not support a pickup time feature, it allows the customer to alert the counter or drive-through once within 500 feet of the restaurant. However, one may choose to pick up the order directly on arrival.
With customization forming a huge part of Taco Bell’s orders, the company has also included an option for guests to customize their orders. Management believes that the menu on the app will tempt customers to pay extra for add-ons like pico de gallo, roasted corn salsa or guacamole, which are not always featured on the restaurants’ menu.
Taco Bell is not the only quick service restaurant striving to counter competition in a crowded sector. The fact that technology has started to play a major role in restaurants can be highlighted by the fact that biggies like McDonald's Corp. (MCD), Domino's Pizza, Inc. (DPZ) and Starbucks Corp. (SBUX) are offering mobile ordering support through their apps. With the growing number of smartphone mobile ordering and payment applications, investments in technology are contributing a major part of the revenue stream for these restaurateurs.
Yum! Brands currently carries a Zacks Rank #4 (Sell).
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