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QSR Network Strategies – Finding a Very Small Sweet Spot

by Mario Vollbracht

Quick-Service Restaurants (QSR) face quite a quandary when it comes to investing in next-generation network technology to grow bandwidth. On the one hand, there’s the competitive imperative to enhance the customer experience via in-store wi-fi, the ability to pre-order food and have it ready for pick-up and access to special offers based on individual preferences and buying patterns. The applications and big data/analytics and social media strategies that enable these features all require additional network capacity.

On the other hand, the sheer volume of locations of any large QSR chain creates a multiplier effect on the cost of network upgrades. Moreover, building a business case is a challenge, since migrations to new network platforms are typically phased in over time. This means that the ROI from near-term investments aren’t realized until future contracting cycles. And adding bandwidth is only part of the challenge – developing and managing customer-focused applications requires fundamentally new skill sets and significant changes in organizational alignment.

Then there’s the nature of an industry characterized by razor-thin margins, where changing the size of cheese slices by a fraction can have a measurable impact on profitability. Another consideration is the franchisee model, where individual store owners have to sign on to investments in upgrades.

Slow and steady is typically the best way to walk this capability/cost tightrope. At present, QSRs typically lack the holistic and collaborative view of enterprise architecture needed for transformation, and continue to take a silo-focused approach that treats networks and apps as separate entities.  An effective strategy recognizes that the transformation to next-generation networks and applications is not a rip-and-replace endeavor, but rather requires comprehensive organizational and technological change management.  Approaching change in a step-by-step manner that accounts for the multiple moving parts involved can address the daunting multi-location implementation challenges that any QSR initiative will likely face.

Carries, meanwhile, need to recognize the quandary their QSR customers face. Beginning with the end in mind is imperative. Just consider the Starbucks’ initiative with Google and Level 3 Communications to upgrade in-store Wi-Fi and web access. The outcome: an awesome in-store Wi-Fi experience for Starbuck’s customers. In other words, simply offering cheaper bandwidth and serving as a transport mechanism isn’t enough. Those who are willing and able to be innovative and package their solutions in a way that aligns with business outcomes and the customer experience will gain a competitive edge.  One option is to forge strategic partnerships and alliances to offer solutions around consumer Wi-Fi, digital menu displays, mobile ordering and in-store pickup.

About the author

Mario Vollbracht specializes in retail and CPG; his areas of expertise include production planning, business analysis, category management and supply chain rationalization.