NFTs, personalization and biometric pay are shaping restaurant loyalty
CHICAGO — Loyalty innovation is gathering pace as inflation erodes the strength of the consumer dollar, forcing some diners to downsize. At the National Restaurant Association Show this weekend, brands highlighted a variety of schemes to improve their rewards programs — from digital tokens to palm-scanning payment tools — and boost customer retention.
“Every major QSR has rolled out loyalty programs in the last three years,” said Nathan Casey, IHOP’s VP of digital marketing, engagement and experiences, during an NRA education session. “It all just happened at once, after years and decades of resistance to loyalty programs. Because the restaurant industry is finally going through the same digital disruption that every other industry has been through.”
The allure of traditional points-for-dollar models is fading as menu prices rise, increasing the discounts offered by such programs. Starbucks, Dunkin’ and TGI Fridays is among chains that recently raised the cost of redeeming core menu items to protect margins from over-discounting, but such changes risk damaging relationships with customers who have grown accustomed to existing rewards.
At the show, experts and operators across the industry discussed this tightrope walk and how loyalty is changing to meet modern customer demands.
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Courtesy of Wow Bao
Levels and NFTs
Wow Bao has introduced a super fan level to Bao Buck’s loyalty program called Hot Buns Club, priced at $99 dollars annually. Unlike other loyalty tiers, Wow Bao’s comes with an NFT as a token of membership.
Casey said such digital tokens could be valuable for brands with audiences already interested in NFTs, or for brands looking to gamify their loyalty programs or add collectibles. Nevertheless, it is unclear how many consumers will be willing to pay for what constitutes a digital trading card.
Given the negative publicity associated with NFTs — which are sometimes speculative assets used to defraud consumers, according to Manhattan District Attorney’s Office – Wow Bao calls its digital tokens “CollectaBaos,” said CEO Geoff Alexander.
“We stay away from the NFT title. The crypto space and NFTs have taken on a negative connotation over the past 12 months, Alexander said. “We like to focus on making a collectible, we want it to be something you own.”
The token is a unique digital membership card for the loyalty program. CollectaBaos gives holders 10% off WowBao.com orders, 10% off merchandise, double Bao Bucks points and free meals, among other perks, according to a press release announcing the launch of the program sent to Restaurant Dive.
For Wow Bao, CollectaBaos is a way to engage with diners and explore NFT technology ahead of some competitors.
“It allows us to help shape and define that space,” Alexander said. “And if you fast forward 24 months or 36 months, when other people start coming into the space, we’re going to be light years ahead of them.”
The future of NFTs, or similar digital collectibles, is far from settled, Casey said in response to Restaurant Dive’s questions at his education session. Starbucks has also offered NFTs, which it calls stamps, to some loyalty customers, which entitle them to benefits. An early edition of 2,000 such stamps, priced at $100, sold out in about 20 minutes in March, CoinDesk reported.
“It’s not going to be relevant to everybody,” Casey said. “Putting in technology for technology’s sake doesn’t accomplish anything … I haven’t seen amazing uses for NFTs yet,” Casey said.
Palm scanning to access rewards and payment
Biometric payments are becoming another technological addition to loyalty programs, Jason Templeman, director of Amazon Web Services, and George Hanson, Panera’s chief digital officer, said in an educational session.
The technology is faster than other payment and loyalty identification methods, and identifies customers more reliably, Templeman said, since a palm cannot be lost or misplaced like a phone or credit card.
Panera and Amazon One recently partnered to bring Amazon One’s palm screening technology to some Panera cafes, integrated with Panera’s 52 million member loyalty program.
Customers can use their palms to pay and access their loyalty rewards, eliminating the possibility of customers or employees entering the wrong phone number to retrieve a customer’s loyalty information.
“You take the stress off the colleague, you take the stress off the guest, and it’s just simple,” Hanson said. Panera deployed palm scanners at two cafes in Marchand the company has been satisfied with the results.
Key performance indicators, Hanson said, include usage, Amazon One sign-ups, new MyPanera sign-ups and speed. The palm scanner, Hanson said, has made it easier for customers to register.
“It shortens the ordering time. It increases the accuracy of that loyalty identification, and it makes it safe for the associate to deliver a personalized experience to that guest,” said Hanson.
Increasing personalization
Modernized rewards offers can help foster loyalty in an increasingly digital landscape, but a personal touch, whether through technology or hospitality, remains key.
“I don’t think most people care that much about a $5 off certificate,” Danny Meyer, chairman of Union Square Hospitality Group, said during the NRA keynote. Meyer said customers are less interested in transactional relationships, like points for dollars, than they are in hospitality.
Loyalty, Casey said, is a mutual relationship between customer and restaurant. That relationship is getting stronger as a result of personalization, experts said. Technology can help with that personalization by tailoring benefits to specific customers, Hanson said.
“It could be offering them a very quick way to rearrange their favorites,” Hanson said. “Or it could just be a personal recommendation based on their previous orders.”
To that end, Panera updated its loyalty program in September to offer guests more personalized options when you redeem rewardsstrike a balance between the “surprise and delight” model and the points-for-dollar model.
Focusing on employee and customer interactions, rather than specific features of a loyalty program, can also deepen relationships with diners, according to Jesse Li, general manager at Qing Xiang Yuan Dumplings.
Li has found that customers appreciate the simple things the most, like when servers remember their names, previous orders or how long it’s been since they last visited the restaurant. The most important part of building a community of customers, Li said, is treating them as friends.
