QSR industry – at the cusp of major transformation
The QSR (Quick Service Restaurant) industry has undergone one of the most transformational phases in the last 3+ years.
Since the onset of COVID, QSRs are experiencing unprecedented growth in digital orders through phone, web, and mobile channels. Most customers receive their orders through food delivery companies or pick them up at the drive-thru window. Average digital order tickets grew by 15-20% during this phase as reported by all major QSR brands in their earnings calls.
Coming out of the pandemic, QSRs are open for business in stores and through digital channels. Customers are starting to use a hybrid of channels to place orders and pick up food between stores and digital channels. Latest results by all QSRs reflect growth in digital revenue combined with same store sales.
QSRs and other service industries like Retail and Hospitality have been supply challenged in getting quality frontline associates. The cost of labor has been on the rise, taking a toll on the QSR’s bottom line. Associates who are ready to work for low wages have challenges communicating with customers and capturing accurate order information.
As history tells us, a melting pot of these challenges and opportunities is the right setup for an industry at the cusp of leapfrogging into transformation.
QSRs are ready for the next big leapfrog.
Enter interactive avatars, conversational AI, LLMs (Large Language Models) and computer vision technologies to stitch and deliver a seamless, accurate and scalable customer experience to handle this huge opportunity ahead.
Avatar 3.0 – rise of digital human agents
Digital kiosk-driven ordering has shown average ticket size growth of 40-50% in some markets through better customer experience, smart menu choices and better recommendations. Customers are freed up from the social pressure of standing in a line and ordering from a human agent or in a drive-thru compared to talking to a live and interactive digital human.
With the advent of technology like avatars, conversational AI platforms, computer vision solutions and recommender systems, QSRs can put these pieces of technology together to produce a seamless experience for engaging customers when taking orders.
At NVIDIA we have developed a reference application called NVIDIA Tokkio, which can be customized by companies to deliver interactive customer experiences. These lifelike avatars can see, perceive, intelligently converse, provide recommendations, and finalize orders through payment processing and send requests to the kitchen for production. Check out the demo video here.
QSR industry operates in a franchise model with very thin margins. It is crucial to enable this solution via Cloud, so franchises need not invest in expensive edge technology. Which is what we did with NVIDIA Tokkio, which is built on NVIDIA Omniverse Avatar Cloud Engine (ACE) to enable real-time avatar solutions at-scale.
Digital humans/avatars have come a long way in the past few years in being able to see, talk, add gestures and converse on top of the ever-growing LLMs. ChatGPT showed the world what LLMs can do in processing long, complex statements and requests.
Where else can you imagine processing long, complex statements while taking an order? Remember Tom Hanks in “You Got Mail” mimicking a long, complex Starbucks order? 😊
Icing on top – branding and marketing
Beyond solving some of the operational and CX challenges, QSRs have an option to leverage these avatars for themed and seasonal branding and marketing opportunities.
Imagine a Disney/Pixar movie character avatar interfacing and taking orders. Children love to interact with the characters from their favorite movies and the virality of the experience is a big opportunity for the brand.
The ability to create custom avatars to various themes like sports, movies and current affairs could enormously impact how customers relate to a brand and perceive the experience they get. This would give the branding and marketing functions a leg-up in positioning their brands and value to customers in a completely different light.
We are on a mission to make this valuable technology-led transformation a reality at leading QSR brands. Along with our strategic partners in the cloud, consulting and technology we are laser focused on giving consumers a paradigm shift in experience.
The ROI for this solution is immediate, huge and has several legs supporting it –
1. Bottomline impact – Optimizing workforce at the store and drive-thru
2. Topline growth – Driving higher average ticket size per transaction
3. CSAT/NPS – Grow customer loyalty via branding/marketing activities
4. Branding – Get the brand identity aligned to this experience and synergize