Subway’s Summer of Technology
Subway spent the summer making moves (two moves, in particular) that underscore the company’s commitment to its omnichannel marketing and digital future. Given its size (the world’s largest restaurant chain with 31,400 stores in North America, alone) and product (made-to-order sandwiches, of course) few restaurant chains are better positioned to and have more to gain from implementing a best-in-class digital strategy.
In June, the company announced the formation of a new division, Subway Digital, under the leadership of CIO and Chief Digital Officer Carmen Wenkoff. The new division is a mashup of traditional marketing and IT teams whose goal is nothing short of transforming consumer engagement and the guest experience (inside and outside the restaurant) through digital technology and a comprehensive omnichannel strategy. Over the next 18 months, the company anticipates 150 new hires with a range of skills (analytics, digital software development, design, campaign management and brand management) joining current team members at its Milford, CT corporate HQ.
Earlier this month, the company added a piece to the new Subway Digital team with its acquisition of a team of 20 along with assets from Vancouver-based Avanti Commerce (as we noted in the September edition of Chain Store Guide’s Retail and Foodservice Technology DataTrac) whose primary business is delivering an order, payment and customer-engagement platform to restaurant chains. With this move, Subway leverages an ongoing partnership with Avanti, dating to 2011, that of late orchestrated the 2015 rollout of Subway’s Wi-Fi based in-store loyalty program throughout Canada.
The acquisition strengthens Subway’s in-house digital capabilities while also reinforcing its ties with Avanti. The newly acquired team remains in place in Vancouver to build upon existing synergies, and apart from the acquisition, Subway and Avanti’s Innovation Team continue development work on in-store ordering kiosks.
Announcements concerning grand initiatives for Subway Digital will likely wait for 2017, but it’s clear that digital loyalty programs and online/mobile ordering-and-payment systems will be key components of any strategy.
Subway has a history in the technology space. Developments in 2015 included the launch of a new app, the introduction of online ordering for the majority of stores in North America and a partnership with PayPal, which is now an available payment option for both mobile and online customers.
As with most chains, Subway’s digital execution hasn’t been perfect to date. But outside of pizza delivery, few concepts (made-to-order subs with a significant carry-out component) lend themselves better to online/mobile orders and payments.
Product: Even more so than pizza, subs (most-often served cold) can withstand the wait for customer pick-up after they’ve been made with less loss in product quality than other QSR and fast-casual menu items.
Process: Done right, real improvements in customer service and savings from efficiencies are available to Subway. All the “ums” and “ahs” and the associated delays that occur as customers decide what they want on their made-to-order sandwich can happen in front of a screen away from the restaurant instead of in front of a Subway employee and other customers. Assembling a sandwich from a digitally generated ticket is much faster for everyone.
Orders: The large number of multiple-sandwich to-go orders (and “Can I pay for these separately?” situations) inherent to the concept are a perfect opportunity to demonstrate the efficiencies that online and mobile orders/payments offer.
As the largest player in the game, Subway has a lot to gain from implementing digital solutions across its business, starting with close-to-seamless online and mobile commerce applications.