Why Fast Food Chains Prefer Digital Orders Over In-Store: A Management Perspective

Many eateries, such as Subway and Dominos, offer discounts exclusively to customers who use an app or order online. This has led some to perceive it as discriminatory and choose to boycott stores that implement such practices. In this article, we explore the reasons behind this trend from a management standpoint, examining economic efficiency, customer behavior, and business practices.

The Economics of Running a Business

Accountability and efficiency are paramount in running a business, particularly in the fast food industry where operational efficiency can significantly impact profitability. One of the primary reasons businesses prefer digital ordering over in-store purchases is the cost savings associated with streamlining the ordering process. According to Money Honey, it is cheaper to run a business that offers discounts exclusively through online and app orders. This point cannot be disputed.

Customer Behavior and Efficiency

Customer behavior also plays a crucial role in the decision to favor digital orders. As described by Money Honey, customers often have varying levels of engagement and preparedness when placing orders. In some cases, customers may not have decided on their orders until just before going to the counter, leading to inefficiencies and longer wait times. Additionally, children's orders may contribute to delays, as each child must be polled individually.

Reducing Line Times and Increasing Efficiency

Streamlining the ordering process can help reduce line times and improve efficiency, which are critical for maintaining a competitive edge in the fast food industry. By having a detailed record of orders placed through an app, managers can better anticipate customer needs and plan production accordingly. This predictive planning can reduce the need for additional staffing, especially when unexpected orders occur suddenly.

Fewer customers at the counter also mean less conflict, as managers have a clear record of orders and can quickly resolve any discrepancies. For example, if a manager notices a difference in the number of items ordered versus what is recorded on the cash register, they can easily investigate the issue.

Addressing Discrimination Concerns

It is essential to address the concern of discrimination in digital-only discounts. As Money Honey points out, refusing to serve individuals based on their preferred ordering method is not inherently discriminatory unless the discount is selectively applied to a protected class of people. Providing the same discounts across all ordering methods does not inherently limit in-store customers.

For businesses, the key is to ensure that all customers, regardless of their preferred method, receive fair and consistent treatment. Retailers can also offer alternative payment options, such as cash or check, to serve customers without bank accounts or credit cards, as seen in the example of a community where many residents do not have bank accounts.

Conclusion

While some may choose to boycott stores that prefer digital orders, it is crucial to understand the business logic behind these practices. The focus is on managing costs, improving efficiency, and providing a better customer experience. By exploring and understanding these aspects, retailers can make informed decisions and address customer concerns effectively.

Companies should strive to offer a range of ordering options that cater to different customer preferences, while ensuring fair treatment for all. This balance can help maintain customer satisfaction and foster loyalty, ultimately benefiting the business in the long run.