When thinking about digital business models and companies that have benefitted greatly from them, fast food chains would more than likely not be the first type or organisation which comes to mind. While outsiders may see little opportunity for a sandwich franchise to adopt and implement technological innovations, Subway is ahead of the curve. Speed and convenience have long been major factors in why consumers are drawn to quick service restaurants. Customers expect the fast and efficient service that barely requires them to look up from their smartphones, and fast food chains must innovate accordingly (PYMNTS, 2018). There are three primary ways in which Subway looks to use technology to retain as well attract new ones, which are focused around loyalty, kiosks, and mobile.
Much of the technological change seen in Subway came with the arrival of the current chief digital officer Carissa Ganelli at Subway back in October 2017. One of her first initiatives was the MyWay loyalty programme. When asked, she stated that the programmes objective was quite simple: “I want to make it as easy as possible for our customers to get our food” (Kelso 2018). Having a solid, functioning and reliable loyalty programme is critical in the intensely competitive fast food space. According to Ganelli, they MyWay loyalty programme has seen 10 times the number of enrolments compared to the old loyalty programme with zero advertising. She attributes this success to the 3 key elements in MyWay. Firstly, customer can earn a cash value reward, where they earn $2 for every $50 spent. Second, there is a is something called a frequency reward, where customers receive “surprise and delight” rewards if they are frequent customers. Lastly, subway will actively encourage and remind members to cash in on their available rewards. MyWay also comes with features that are online or mobile only (Kelso 2018, and PYMNTS 2018).
Another technological implementation is the use of kiosks in their stores. Something which has been in Mcdonalds stores, for example, for quite some time was beginning to be placed in Subway stores. The idea behind this is that whilst the immersive mobile app and online customer experience are there to sate the customers need for speed, the kiosks were to upgrade the look, feel and experience of physical Subway stores (PYMNTS, 2018). Ganelli also states that they have noticed that consumers will walk into their restaurants and go straight towards the kiosk and not interact with any staff members. A strange finding from looking at their order tickets was that customers who used the kiosks spent more on average than those that didn’t, purchasing more of the add-ons and “make it a deal” options. Overall though, the kiosks primary function was to satisfy the customers expectations of fast service and speed up the ordering of sandwiches (Haverans, n.d)
Arguably the biggest impact with regards to the digital side of Subway is their delivery options. In 2018, subway launched ordering on Facebook messenger, two years after they delved into remote ordering capabilities. Perhaps the only way to make things even more convenient and efficient for customers than fast food already is, was to have the food brought directly to them. Ganelli told Forbes that mobile ordering had experienced 100% year-over-year growth. Not only can people enter their orders through their mobile app to collect in store, but it also provides the option of having the food delivered. In order to expand their reach even further, Subway partnered up with other third-party applications, namely 4 major delivery services in the United States: Uber Eats, Postmates, GrubHub, and DoorDash. In the United Kingdom, they also have their food delivered by Just-eat. Subways senior director of Global Convenience said that “by partnering with the four largest delivery providers, we are able to leverage their expansive geographic networks to deliver customized meals to our guests wherever and whenever they want them. we have also seen that each of the providers attracts a different – and loyal – consumer following.” (Kelso, 2018)
Subway was somewhat behind and slow to innovate in comparison to their competitors, but they have comeback and continue to look towards the future. Their focus and intentions are clear and intend to focus on what attracts customers to Subway and fast food in the first place: make ordering food as fast and easy as possible. Through their kiosks, apps, delivery services and loyalty plans, Subway has used their digital business model to increase their business in a tremendous way, after closing several stores and declining in 2016. These innovations have allowed the company to bounce back, and there appears to be no signs of slowing down as they employed over 150 technology, marketing and operational professionals to support the business’s mobile app, along with other technological initiatives further down the line (Alberto, 2018).
References:
Albert, C. (2018). Business success stories of digital transformation that will leave you thinking. Retrieved 3 March 2020, from https://www.itproportal.com/features/business-success-stories-of-digital-transformation-that-will-leave-you-thinking/
Haverans, R. Top 12 Real-World Digital Transformation Success Stories | My Brainbridge. Retrieved 3 March 2020, from https://www.brainbridge.be/news/top-12-real-world-digital-transformation-success-stories
Kelso, A. (2018). Subway’s Digital Initiatives Show The Chain Is No Longer ‘Slow To Innovate’. Retrieved 3 March 2020, from https://www.forbes.com/sites/aliciakelso/2018/11/13/subways-digital-initiatives-show-the-chain-is-no-longer-slow-to-innovate/#3d75df863526
Subway Seeks To Innovate, Reworking Kiosks, Loyalty And Mobile. (2018). Retrieved 3 March 2020, from https://www.pymnts.com/exclusive-series/qsr-and-mobile/2018/subway-restaurant-innovation-kiosks-loyalty/
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