Wendy’s Doubles Digital Sales Thanks to Loyalty, Delivery

Analysis

• The fast-food chain’s online sales increased from 2.5% to 5% for Q2 2020.
• Still new to the digital game, online orders still make up a small proportion of Wendy’s sales, though these figures show that may change soon.
• Delivery comprises a large part of Wendy’s digital sales—Uber Eats is a leading partner.
• Wendy’s also just launched its loyalty program this past July, leading to an uptick of in-app orders.

Need to Know

In 2020, as digital commerce continues to dominate the retail and food service spaces, online sales amounting to 5% may not be considered substantial. But for Wendy’s, 5% is a milestone: it marks a doubling of digital orders for the fast-food chain.

Wendy’s, which this week reported digital revenue of 5%, up from 2.5% year over year, is late to the digital game: it was only in late 2019 that the company announced plans to bolster its online presence, announcing a loyalty program and partnering DoorDash, at that time. Wendy’s is now partnered with Uber Eats and all other major third-party delivery services, but the uptick in online sales for Q2 is largely coming from its own delivery business, Gunther Plosch.

This spike in digital activity is expected to drive more attention to its loyalty program—launched just last month—which allows customers to earn points by scanning a QR code when they use Wendy’s ordering app.

“We plan to drive folks into the program by providing compelling offers and marketing this program on our packaging,” Todd Penegor, Wendy’s president and CEO, said on an earnings call. “We believe that this program will drive our digital penetration even higher moving forward. We also continue to work on initiatives such as mobile grab-and-go and curbside pickup as we know that a frictionless experience is what customers will demand as we move forward in a post-COVID world.”

According to this week’s earnings call, delivery orders are typically larger than in-person orders, which bodes well for the company’s bottom line, in addition to its push into the digital arena.

Wendy’s has made some internal changes to assist in its digital growth, hiring a Chief Information Officer who will report directly to Penegor. Wendy’s former Chief Digital Experience Officer, Laura Titas, is no longer with the company.

Fast food companies have cashed in during the COVID-19 pandemic, with companies such as Domino’s and Chipotle now reporting the majority of their sales coming from online. Other establishments have used the pandemic as an opportunity to quickly strengthen and diversify their digital offerings to better attract digital shoppers: Starbucks, for instance, has expanded its in-app payment and rewards capabilities, while Burger King recently tested a reservations app to better prepare for the return of in-restaurant dining.