Chownow on How Independent Eateries Can Navigate Pandemic-Related Challenges

DECEMBER 2020

FEATURE STORY (p . 7) ChowNow On How Independent Eateries Can Navigate Pandemic-Related News and Trends Deep Dive Scorecard QSR transactions drop The fraud trends The latest mobile Challenges 11by 9 percent year over 17of 2020 and what 21order-ahead provider year in October due to restaurants can rankings decreased dine-in traffic learn from them TABLE OF CONTENTS

What's Inside A look at recent mobile order-ahead developments, including the fraud trends 3 brought about or aggravated by the pandemic and how they could shape QSRs’ security measures in the years to come

Feature Story An interview with co-founder and COO Eric Jaffe of online food ordering system 7 ChowNow about the struggles independent restaurants faced in 2020 and the fraud lessons they will take into the future

News and Trends The latest mobile order-ahead developments, including how restaurants lost $117 million to social media scams during the first half of 2020 and how QSRs’ 11 transaction volumes declined by 9 percent in October compared to the same month during the previous year

Deep Dive An in-depth examination of 2020 fraud trends as well as the lessons QSRs must 17 learn from new fraud schemes as they enter the new year

Scoring Methodology 20 Who’s on top and how they got there

Top 10 Providers and Scorecard The results are in. See the top scorers and a provider directory that features 77 21 players in the space

About Information on PYMNTS.com and Kount ACKNOWLEDGMENT 51 ® The Mobile Order-Ahead Tracker is done in collaboration with Kount, and PYMNTS is grateful for the company’s support and insight. PYMNTS.com retains full editorial control over the following findings, methodology and data analysis.

The pandemic’s impact on the restaurant indus- use smartphone apps for food delivery, with this try in the United States cannot be overstated. figure rising even higher when accounting for take- The National Restaurant Association estimates out or curbside pickup. This number is likely to that almost 100,000 eateries — roughly one in six grow even after the pandemic subsides, with 53.9 restaurants nationwide — have shuttered either million consumers projected to use such apps by temporarily or permanently due to the health cri- 2023. Such solutions are especially popular among sis and its associated social distancing guidelines, younger generations, with 46 percent of 18- to stay-at-home orders and economic downturn. The 34-year-olds utilizing food ordering apps and 50 restaurant industry lost $165 billion in revenue be- percent of Generation Z consumers saying they will tween March and July and is on track to lose $240 try a new restaurant if curbside pickup is available. billion by the end of the year, and this decline is The growing prevalence of these apps is not a pan- expected to continue until the pandemic finally acea for all of the restaurant industry’s ills, however, abates. as fraud continues to plague the space. Many of The surging popularity of mobile apps is one of the these schemes are simply age-old scams that have few factors keeping the restaurant industry from received digital face-lifts, with some of the most entering an inescapable free fall. Mobile ordering popular tactics including chargeback fraud and solutions have proved to be invaluable to restau- fake online reviews intended to drive down a spe- rants as dine-in traffic essentially grinds to a halt. cific restaurant’s popularity. Schemes called “pizza More than 46.5 million consumers around the U.S. plugs” involve the use of stolen credit cards to sell

discounted meals to unsuspecting consumers, Fraudsters also commonly leverage botnets to many of whom simply believe they are receiving launch their attacks, as malicious bots can quick- special offers. These scams ultimately leave the ly flood QSRs’ defense mechanisms with fake restaurants they target holding the bag when card- accounts and other scam attempts. A new solution holders notice the fraudulent charges and ask for from fraud prevention developer Kount is designed chargebacks. to aid QSRs in thwarting such attacks, allowing them to use a customizable, rules-based detection Recent promising news of COVID-19 vaccines system to differentiate between bad bots and good may have shown the world that the pandemic will bots. More than 80 percent of eCommerce busi- soon come to an end, but the restaurant indus- nesses have reported losing funds to malicious bot try’s concerns will not cease as abruptly. Eateries networks within the past year, with two-thirds of must make use of what they have learned from businesses claiming losses of $500,000 or more. the pandemic — especially the insights regarding the popularity of mobile order-ahead apps —if they The pandemic’s negative effects on restaurants’ wish to remain prosperous for years to come. revenues should not be underestimated, but mobile order-ahead systems are helping eateries Mobile order-ahead developments stay afloat to some degree. A recent study found around the world that QSRs’ transaction volumes declined by 9 per- Social media fraud is surging in prevalence during cent in October compared to the same month the pandemic. These schemes consist of fraud- during the previous year, largely due to decreased sters falsely advertising offers from restaurants on in-restaurant traffic. Experts say that mobile order- social media, duping victims into paying for them ing is one of the few factors keeping this decline and then absconding with the funds. Social me- from spiraling out of control, however, helping to dia scams cost more than $134 million in 2019 and offset a 62 percent drop in dine-in revenues. a staggering $117 million in the first half of 2020 For more on these stories and other mobile alone, according to the Federal Trade Commission order-ahead developments, read the Tracker’s (FTC). Approximately 94 percent of victims report- News and Trends section (p. 11). ing being scammed on Facebook and Instagram.

Executive ChowNow on what independent restaurants learned from a challenging 2020 INSIGHT The pandemic devastated the restaurant indus- A recent data breach of a mobile order-ahead app leaked 2.8 million accounts onto the dark web. How can try this year, with both big chains and independent apps protect their users against this and aid them in the eateries facing the triple threat of lockdowns, eco- event a breach does happen?

nomic turmoil and a surge in digital fraud. Those “Attacks like these are often the result of account take- that survive the pandemic will likely be stronger for over or a malicious bot attack. Account takeover occurs when a bad actor, bot or botnet gains control of an app it due to the lessons they learned in this challeng- or customer accounts. Once they have access, they can ing time, however. In this month’s Feature Story make unauthorized transactions, drain stored value and (p. 7), PYMNTS spoke with Eric Jaffe, co-founder steal personal information. and COO of online food ordering system ChowNow, Account takeover can have devastating, long-term effects on restaurants. Beyond lost revenue, account about how independent restaurants can improve takeover fraud damages brands and erodes customer their security capabilities and protect their bottom trust. But QSRs can prevent account takeover fraud with lines by avoiding hefty commission fees. a multilayered approach to account protection. Kount Control applies protection, policy customization Deep Dive: How the trends of 2020 can inform and reporting to give restaurants [a] complete [safeguard the coming decade’s fraud-fighting goals against] account takeover. It’s the industry’s first solution that provides an adaptive and customizable way to pro- This calendar year has been devastating for the tect and enhance the entire customer journey. A system country’s restaurants, with eateries facing declines that can protect customer information can help businesses avoid brand and operational damage. Meanwhile, in restaurant traffic as well as surges in fraud. Kount’s Event-Based Bot Detection can stop malicious Criminal tactics on the rise include chargeback bots, allow good bots and quickly analyze, classify and adapt policies to new and questionable bots. fraud, fake reviews and “pizza plug” schemes that involve the use of stolen credit cards. The strate- These days, it’s too easy to lose customers to the com- petition. QSRs and fast casual restaurants new to gies QSRs have developed to fight these types of eCommerce are learning what retailers discovered years fraud could serve the industry well into the future, ago. When bad actors attack, the losses add up quickly. The good news is that enterprise fraud solutions are however. This month’s Deep Dive (p. 17) explores ready to fight fraud in the restaurant space. the fraud trends that shaped 2020 and the technol- Kount’s combination of human expertise and advanced ogies and techniques QSRs are developing to keep AI and machine learning makes it easy to serve up cer- them in check. tainty in every digital interaction. Kount can help QSRs protect and manage the entire customer journey — from account creation and login to checkout.”

RICH STUPPY chief customer experience officer at Kount

Five Fast Facts

Detection Breach Massive data breach leaks 2.8 Kount debuts a new order-ahead app fraud million mobile botnet-detecting accounts online prevention solution

Customers REcession Order-ahead Restaurant customers desire Digital sales are expected to QSRs’ revenues decline due to virtual waiting lists for mobile make up more than half of order-ahead apps lack of foot traffic, but mobile QSRs’ revenues by 2025 order-ahead slows fall

The pandemic has been the defining event of 2020 develop these services in-house, but independent for consumers and businesses around the world, restaurants often need to partner with third-party with entire industries experiencing enormous im- services to adopt such capabilities. Online food pacts from social distancing and stay-at-home ordering system ChowNow is one third-party pro- orders intended to curb the virus’s spread. Few sec- vider specifically tailored for independent eateries, tors have been more affected than the restaurant offering its services at a flat rate rather than on a industry, with nearly 100,000 eateries closing either commissions-per-order basis. temporarily or permanently due to the pandemic. “The [restaurant] industry is critical to American Mobile ordering has been a lifeline to helping eat- life,” co-founder and COO Eric Jaffe said in a re- eries keep their doors open, with many restaurants cent interview with PYMNTS. “Ten percent of all that previously offered only on-premises dining workers in the United States have some kind of tie quickly scrambling to maintain their customers by to the restaurant industry, whether [as] a server, a adopting takeout and delivery capabilities. Large cook or a manager or [as] a supplier or a servicer to chain restaurants may have the resources to the industry. We’ve got to keep these things afloat,

because it’s important [not only] for the American probably already had some kind of online ordering. economy but [also] for the culture of our society There were a lot of consumers who just absolute- and the microcommunities that we live in.” ly decided to leave a brand they loved because they just knew that brand hadn’t built the muscle to ser- Jaffe recently gave PYMNTS an inside look at the vice them in this particular time.” struggles the restaurant industry has faced in a tumultuous year, including the growing threat of Restaurants frequently turn to third-party delivery digital fraud that is likely to endure long after the services like DoorDash and Grubhub to outsource pandemic is behind us. marketing and delivery expertise, but these platforms come with hefty commission fees per order How independent restaurants have taken a hit — a difficult pill to swallow for small businesses. Independent establishments were at a huge disad- These commissions would have been an accept- vantage compared to their large chain counterparts able cost of doing business in normal times, but as due to two main factors: a lack of existing digital delivery has become a much larger share of overall ordering infrastructure and a lack of resources to business, these costs have grown untenable.

create or contract one. Consumers still wanted to “The quick fix is just [using ordering services like] patronize their favorite restaurants, according to Grubhub or Postmates or Uber Eats, but suddenly Jaffe, but the restaurants were hard-pressed to your costs really skyrocket, since those platforms provide digital ordering channels for them. charge between 20 [percent] and 40 percent of “The challenge of being an independent eatery is an order,” Jaffe continued. “Maybe you’re okay that you probably don’t have the resources or the with paying those commissions when 20 percent knowledge to be able to navigate some of the very of your revenue comes through that channel, but problematic [hurdles] that came your way, like trying when the model flips and suddenly 80 percent of to market to customers who still want your product your revenue is taxed by those commissions, your but have less access to you,” he explained. “If you’re business model breaks.” a large eatery, you probably had already implement- ed a big marketing strategy to talk to these clients. You probably already had a big email list and you

Services like ChowNow sought to resolve this prob- Protection against this type of fraud is still import- lem by offering less-expensive ordering models, ant, however, as the restaurant’s customers are but other problems like the ever-present specter of still getting defrauded even if it is against one of fraud still loom over digital ordering systems. The their other accounts. ChowNow, for its part, han- company relies on back-end order tracking and co- dles fraud through algorithmic analysis, scoring operative data sharing to address these problems. individual transactions on a number of variables to determine their propensity for fraud. Jaffe recom- The fraud lessons to take into 2021 mends that restaurants not be afraid of looking for Jaffe said that the most common type of fraud help in this endeavor.

they see is not the attempt to steal funds or data di- “Fraud’s a moving target, and you just constantly rectly but rather the use of mobile ordering apps as have to be vigilant with how you are approaching it test subjects for stolen credit cards or passwords. because they’re always changing their tactics,” he Fraudsters often get their hands on passwords said. “You’ve got to change yours as well. If you’re from either large data breaches or phishing emails, going to partner with somebody out there, look for both of which techniques are on the rise in 2020 somebody that’s also attached to another network and are expected to grow more prevalent in the that shares information about known fraudsters so coming years. that you have access to that database, and then “There’s not a lot of money in this for fraudsters,” you can choose to ... decline an order if you see a said Jaffe. “What you do see fraudsters doing is if profile like that coming through, depending on how there are large events where lists get out of email it is scored.”

addresses connected to passwords, they may ac- The restaurant industry will likely face a vastly dif- tually go to easily accessible platforms and try to ferent landscape on the other side of the pandemic, put through an order to see if this account exists but the need to defend against fraud will remain un- on this system. If it’s there, they can access infor- changed. Teamwork will be vital to addressing the mation about this person to then go use that in issues wrought upon the industry in 2020 and in another platform where they could try to get addi- the years to come. tional value.”

QSR FRAUD TRENDS The Federal Trade Commission (FTC) reports that $134 million was stolen in social media scams last Social media fraud totals $117 million during first half of 2020, FTC reports year, but a staggering $117 million was reportedly lost to such schemes in just the first half of 2020. QSRs face a multitude of fraud threats, ranging from Facebook and Instagram were the most common false chargebacks from legitimate customers to vehicles for this type of fraud, with 94 percent of hackers trying to break into consumers’ accounts. social media scam victims reporting they were tar- Social media scams can be particularly pernicious geted on these sites or their apps. The FTC says the for restaurants. These schemes entail fraudsters pandemic is at least partly to blame for the increase, falsely advertising offers from businesses or restau- as customers are more frequently turning to online rants on social media, enticing victims to pay and delivery options for their meals and are thus more then absconding without delivering the promised re- receptive to special offers such as those the scam- wards. Restaurants often unfairly take the blame for mers post online. these scams, leaving them associated with broken promises and lost funds in the eyes of consumers.

Kount debuts bot detection solution bad bots and isolate the latter. The system also infor fraud prevention cludes customizable rules regarding which actions Stopping fraud and protecting customers is a top can be taken when bad bots are detected.

priority for QSRs, especially as online ordering Kount’s solution comes as sophisticated botnet at- grows more prevalent during the health crisis and tacks are on the rise, with 80 percent of eCommerce consequently opens up new digital channels for bad businesses reporting lost funds due to malicious actors. Fraud prevention and identity trust solution bot networks. Two-thirds of businesses have report- provider Kount recently rolled out a new offering ed losses that exceed $500,000 within the past year, called Event-Based Bot Detection, which is designed making bot detection a priority in reducing fraud. to quash fraud by detecting bots in digital ordering systems. Not all bots are malicious, however, and 2.8 million stolen Eatigo accounts Kount’s solution can differentiate between good and listed for sale online The consequences of subpar fraud prevention protocols can be devastating. Asian restaurant res- ervation platform Eatigo suffered a data breach in 2018 that leaked 2.8 million user accounts online, where they are being sold to fraudsters on dark web marketplaces. The company only recently revealed the data breach to affected customers, reporting that names, email addresses and phone numbers were stolen. Eatigo said passwords were not affected and that all stolen details were taken from an old database that is not in use. This information can be leveraged to steal additional sensitive customer data, however, as many password recovery systems require only an email address or phone number to reset passwords, both of which fraudsters could

easily obtain from this data breach. Eatigo warned 82 percent of consumers plan to maintain its customers to be on the lookout for suspicious pandemic-driven ordering habits emails asking for more personal information, as The rising trend of online ordering and delivery op- fraudsters could be using the stolen addresses for tions seems to be here to stay, according to a recent phishing schemes. PYMNTS study. Almost 2,100 U.S. consumers were surveyed about the changes in their dining habits MOBILE ORDERING TRENDS during the pandemic, and 82 percent said they will continue placing orders online, using mobile apps, Restaurant revenue continues steady decline, but digital orders reduce losses having meals delivered or maintaining other behav- iors they have adopted even after the health crisis The restaurant industry has been suffering for ends. The report found that 15.7 percent of consum- months, with social distancing and stay-at-home ers are dining in restaurants less often and ordering orders slowing foot traffic and forcing countless es- out more than they did before the pandemic, and tablishments to close for good. One study found such trends would represent a seismic shift in the that QSRs’ transaction volumes fell by 9 percent restaurant industry if they continue. year over year in October, while full-service chains’ revenues declined by 14 percent during the same Rewards offerings have been a key driver of these period. These figures would be drastically worse dining habits, with 43 percent of all restaurant pa- were it not for online and mobile orders picking up trons participating in such programs. The study the slack. revealed that 38.7 percent of restaurant consumers do not have access to these programs, however, Digital restaurant orders increased by 138 percent leaving an untapped market that could be crucial to in Q3 2020 compared to the same quarter last year, helping restaurants expand their reaches. with delivery growing by 106 percent, drive-thru up

27 percent and carryout increasing by 9 percent. Digital ordering expected to constitute more This is not quite enough to offset the 62 percent than half of all QSR sales by 2025 drop in dine-in revenues, but it has done much to The pandemic is fueling skyrocketing growth in digi- moderate losses. tal ordering volume, and this trend is not expected to recede after the crisis wanes. A recent study found that digital orders will make up 54 percent of QSRs’

sales by 2025, marking a 70 percent increase over of U.S. and Canadian restaurants now offer delivery, values outlined in studies published before the pan- mostly through third-party programs like DoorDash demic’s onset. Restaurants of all types — even those or Grubhub. that previously did not offer mobile ordering — have Customers desire virtual waiting lists and shifted to digital channels amid social distancing or- contact-tracing capabilities at restaurants ders and dining room shutdowns, and customers have now incorporated these ordering methods into Consumers have definite ideas about how restau- their daily lives. rants can improve their mobile app and dine-out experiences during the pandemic. One recent study Curbside pickup is expected to expand by 71 percent found that customers’ most sought-after feature is over the next five years, while delivery is predicted virtual waiting lists, with app capabilities that can to grow by 23 percent during the same time period. notify prospective diners about how full specific The report also found that approximately 90 percent restaurants are and how long they will likely wait for tables. Such features could allow customers to put their names in remotely and be summoned via the app when their tables are ready.

Another common request is contact traceability, which would enable restaurants to quickly determine which patrons were dining in at any given time if one of its recent customers were to have con- tracted COVID-19. Deploying CCTV cameras that incorporate facial-recognition technology could help restaurants achieve this, but doing so could run afoul of privacy requirements in the European Union and other regions.

NEW ORDERING INNOVATIONS AND loyalty train as it plans to launch a program called IMPLEMENTATIONS MyMcDonald’s next year, following an upcoming trial period at restaurants in the Phoenix area. The Chipotle debuts first digital-only restaurant concept program will offer personalized menu selections based on customers’ order histories and will reward The surge in online and mobile ordering has rad- participating patrons with points that can be re- ically transformed the restaurant industry, and deemed for free menu items. many chains are capitalizing on the new paradigm. Mexican QSR giant Chipotle recently opened its first The upcoming rewards program will also grant digital-only restaurant in Highland Falls, New York. McDonald’s access to customers’ ordering data, ac- The location lacks a dining room and in-person or- cording to Tom Caporaso, CEO of loyalty program dering, catering exclusively to orders placed online developer Clarus Commerce. This will enable the or via smartphone. The restaurant will also offer chain to determine which customers order what delivery and catering options that can be selected menu items and when, allowing it to develop region- online or via mobile. al or worldwide promotions or menu changes.

Chipotle is experiencing skyrocketing digital order- Chick-fil-A adds online ordering after ing volumes and is expected to surpass $2.5 billion summer trial

in online orders this year. The chain plans to launch New mobile ordering innovations often generate more of these digital-only storefronts in urban loca- buzz, but many customers still opt to place orders tions, and it also aims to add drive-thru lanes that on their computers before heading to restaurants. support digital orders — called “Chipotlanes” — at Chick-fil-A recently began offering an online or- most of its future restaurant locations. dering option after a trial period in Baltimore and Washington, D.C., over the summer, adding McDonald’s launches new loyalty program to optimize digital ordering web-based ordering to its popular mobile ordering option. The chain previously allowed only cater- Loyalty programs are critical to the success of ing orders to be placed online rather than individual many QSR chains’ online ordering strategies, re- meals, but the online portal now largely mirrors the warding repeat customers with discounts, special functionality of its mobile app, complete with the in- offers or merchandise. Fast food titan McDonald’s tegration of its loyalty program. Orders are available recently announced that it is hopping aboard the

for drive-thru, pickup, curbside or delivery, with the chain collaborating with third-party services like DoorDash on a location-by-location basis.

Miami-Dade International Airport launches mobile order-ahead functionality

Airport dining is often a stressful affair, with long lines and tight deadlines meaning that travelers frequently skip meals entirely to avoid uninten- tionally missing their flights. A recent partnership between the Miami-Dade Airport Department, Unibail-Rodamco-Westfield Airports and food ordering platform Grab has spawned a new mobile ordering app for the airport called MIA2GO. The offering allows passengers to place orders at vari- ous restaurants and have them ready for pickup at designated locations. Passengers can view menus either by scanning QR codes or by browsing online, and they can pay with their credit or debit cards, Apple Pay or Google Pay.

The new app was inspired by the drastic travel changes spurred by the ongoing pandemic, according to Mike Salzman, executive vice president and group director of Unibail-Rodamco-Westfield Airports. He said the new solution required features that allowed it to limit contact and reduce the risk of infection between travelers and airport staff.

How 2020’s Fraud

Trends Will Shape take advantage of online ordering during the health Security Measures crisis, such as false chargebacks, fake reviews and “pizza plugs,” all of which can severely impact Going Forward restaurants’ revenues at a time when they can ill af- ford to lose any money.

The following Deep Dive explores the fraud methods that bad actors have exploited in 2020 as well as the lessons restaurants have learned from these The past year has been — by almost any measure schemes and how they can tap into this knowledge — one of the hardest ever for the restaurant indus- to safeguard their operations in the decade to come. try, with the ongoing pandemic hurting few sectors more than hospitality and dining. The National The fraud threats of 2020

Restaurant Association’s initial 2020 outlook was Chargeback fraud is now one of the most pervasive bright, as it projected sales just shy of $900 billion. threats against the QSR industry, but this problem Social distancing guidelines, stay-at-home orders was not nearly as widespread when most restau- and mandated dining room closures around the U.S. rant transactions happened in person and any order slowed restaurant traffic to a trickle, however, result- issues could be resolved immediately. Most charge- ing in just $659 billion in revenue by year’s end. This back requests are still legitimate, such as when revenue free fall could result in 100,000 restaurants customers get the wrong orders from restaurants nationwide closing either temporarily or permanent- and decide to recoup their losses and cook instead. ly, with 40 percent of all restaurant operators unsure Some individuals come up with elaborate excus- whether they can survive the next six months. es to avoid paying for their food, however, claiming Eateries are turning to online and mobile ordering their children accidentally placed orders via Amazon as well as delivery to stay afloat, with online order Alexa when in reality they are simply trying to volume from food chains spiking by 225 percent score free pizza, for example. Most customers by- since the pandemic began. These growing revenue pass restaurants entirely when trying to perpetrate streams carry their own risks, however, not the least chargeback fraud, with 76 percent of cardholders of which is their propensity to be targeted by fraud. going directly to their payment card issuers. This Bad actors are deploying numerous schemes to

gives QSRs no chance to weigh in on customers’ as- Lessons for 2021 and beyond

sertions and dispute any illegitimate claims. QSRs are working hard to mitigate the myriad threats Fake reviews are another growing threat, especially that have surfaced during the past year, and many as more customers turn to Yelp, Tripadvisor and oth- plan to apply the lessons they learned during the er restaurant review websites to determine where to health crisis in the coming years. This is especial- place their next orders. Fifty-six percent of restau- ly crucial because consumers are becoming more rant owners say reviews are better at driving traffic aware of fraud — and customers who have been de- and revenue than traditional advertising, with more frauded when using QSRs’ apps are more willing than one-third of diners refusing to order from a than ever to abandon those restaurants. Sixty-four restaurant with a rating of less than four stars on on- percent of American adults have previously been line review sites. These websites can be chock-full victims of data theft, and 62 percent are concerned of fake or misleading customer assessments, how- about the possibility of fraud on these apps.

ever, with as much as one-fifth of all Yelp reviews Restaurants will therefore have to step up their believed to be fraudulent. Such fake ratings are of- game when it comes to fraud detection and pre- ten the result of review farms, which restaurants vention. Utilizing AI in tandem with human analytics can hire to bad-mouth competitors by paying indi- teams to examine individual transactions for fraud viduals to write poor reviews en masse. can be particularly effective in fighting these emerg- Yet another emerging threat to the restaurant in- ing schemes. Studies have suggested that these dustry includes schemes known as “pizza plugs,” advanced technologies can improve fraud detection named after the type of restaurant they typically tar- rates by as much as 50 percent and — just as impor- get. These scams consist of fraudsters placing ads tantly — reduce false positive rates by 60 percent.

for discounted food on social media and asking con- Fraud is not the only factor that concerns custom- sumers to pay them directly. The fraudsters then ers. Inconvenience can be devastating as well, use stolen credit cards to place the orders from piz- meaning QSRs will have their work cut out for them zerias, resulting in bad actors getting paid for next to in the coming months and years as they attempt to no work and pizzerias getting ripped off when cred- balance these competing priorities. Recent vaccine it card owners notice illegitimate orders and notify announcements have heralded a coming end to the the restaurants. The higher volume of online deliv- pandemic, but many of the schemes that have de- ery orders experienced during the pandemic has veloped or picked up steam during the past year will made this scheme harder to spot and easier to exe- continue well into the future. cute than ever before.

The PYMNTS Mobile Order-Ahead Tracker® gives an overview of the trends and activities across the mobile order-ahead space, as well as the companies that offer relevant solutions and services. Each month, the Tracker’s News and Trends section provides a comprehensive update of the latest goings-on of the major industry players, technologies and solutions fueling the consumer-driven ecosystem. This visual representation of the mobile order-ahead ecosystemMobile explains Order how we Ahead organize our Ecosystem News and Trends. ConsumerConsumer

Consumer Ordering Interfaces

MOBILE VOICE MESSENGER SMART CONNECTED APP ASSISTANT TV CAR

Consumer Acquirers

QSR BRANDED QSR AGGREGATORS

Integrators

QSR Acquirers

ORDER DIRECT ORDER AGGREGATORS

POSPOS

MOBILE ORDER-AHEAD SCORING METHODOLOGY

Companies included in the Tracker Scorecard are the top restaurants providing mobile order-ahead as an integrated offering within their operations. Providers have been scored and ranked based on three primary mobile order-ahead criteria:

Ordering loyalty App channels integrations usage

How orders can be placed How customers can How many people interact via the app, including access their loyalty with the app, including usage whether they can be made or rewards program penetration rates, the number through a branded app, accounts via a business’ of active monthly users and third-party aggregator, mobile app the average session duration messenger app or in seconds voice-activated app

This month’s provider directory assesses 77 leading players in the space and scores them based on their mobile ordering apps' features and adop- tion levels. Scoring factors in loyalty and rewards program integrations, the number of active users each month and the average time users spend on the app. Ordering channel options, including whether customers can order by voice and whether orders are placed through a branded app or a third-party aggregator, are also important.

score score 1 97 6 90

score score 2 95.5 7 89

score score 2 95.5 8 88.5

score score 4 94 9 87.5

score score 5 93.5 9 87.5

Loyalty Total Integrations Score Ordering App Usage Channels Score 25 0 27.5 52.5

APPLEBEE'S Launch of mobile order service date: April 2016

The Applebee’s app allows customers to order and pay ahead. They can also create accounts to save favorite orders and earn loyalty points.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 5 37

ARGO TEA Launch of mobile order service date: November 2014

Argo Tea’s app enables customers to preorder and prepay for purchases. It allows customers to scan mobile devices to pay at the counter when picking up their orders, and offers rewards and loyalty features including perks for every 10 vis- its and credit for downloading the app.

Loyalty Total Integrations Score Ordering App Usage 0 52.5 Channels 25 Score 67.5 25 27.5 7 35.5

APPLEBEE'S April 2016 BJ’S RESTAURANT & BREWHOUSE Launch of mobile order service date: June 2014

The Applebee’s app allows customers to order and pay ahead. They can also create accounts to save favorite orders The BJ’s mobile app allows customers to order ahead for takeout or dine-in, and offers split-the-bill features for group and earn loyalty points. orders.

Loyalty Total Integrations Score Ordering App Usage 25 37 Channels Score 7 5 7 25 32.5 64.5

ARGO TEA November 2014 BLAZE PIZZA Launch of mobile order service date: March 2016

Argo Tea’s app enables customers to preorder and prepay for purchases. It allows customers to scan mobile devices to The Blaze Pizza app enables guests to order and pay from smartphones and earn rewards including free meals. The pay at the counter when picking up their orders, and offers rewards and loyalty features including perks for every 10 vis- app also provides online order histories, reordering capabilities and a nutrition calculator. its and credit for downloading the app.

Loyalty Total Integrations Score Ordering App Usage Channels Score 25 25 44 94

BURGER KING Launch of mobile order service date: May 2016

The Burger King app is piloting an order-ahead tool via Facebook’s Messenger chatbot. The service would allow customers to place meal orders, select pickup locations and pay for purchases.

Loyalty Total Integrations Score Ordering App Usage Channels 25 Score 50 7 18

CALIFORNIA PIZZA KITCHEN Launch of mobile order service date: February 2017

The CPK Rewards app allows guests to order and pay from their phones, and earn rewards they can spend at participating locations.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 11.5 43.5

CAPRIOTTI’S Launch of mobile order service date: June 2015

Capriotti’s app enables customers to place and pay for orders. It is integrated with the company’s CAPAddicts Rewards Program and features a store locator.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 32 64

CAVA Launch of mobile order service date: November 2013

The CAVA app enables customers to view the restaurant’s full menu, customize dishes, pay in-app and order in advance.

Loyalty Total Integrations Score Ordering App Usage Channels Score 15 25 50 90

CHICK-FIL-A Launch of mobile order service date: June 2016

The Chick-fil-A app allows guests to customize their orders, pay in advance and skip lines when picking up their meal. It also offers a new rewards program and allows customers to save and reorder favorite items.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 40 72

CHILI'S Launch of mobile order service date: September 2011

The Chili’s app enables customers to find the nearest restaurant, put their names on seating wait lists and order meals to-go. It also saves previous orders and integrates with the My Chili’s Rewards program.

Loyalty Total Integrations Score Ordering App Usage Channels Score 17 25 46.588.5

CHIPOTLE MEXICAN GRILL Launch of mobile order service date: January 2009

The Chipotle app allows iOS and Android users to place orders and pay for them. It also enables users to find nearby restaurants, see menu and nutrition information and access recent orders.

Loyalty Total Integrations Score Ordering App Usage Channels Score 0 25 10 35

CHOP'T Launch of mobile order service date: November 2016

The Chop't app allows customers to place orders in advance to be picked up in-store, earning rewards. It shows the nearest restaurant and displays nutritional and allergen information about menu items.

Loyalty Total Integrations Score Ordering App Usage Channels Score 0 25 19.5 44.5

COSTA VIDA Launch of mobile order service date: November 2015

The Costa Vida app features order-ahead and rewards capabilities, displays special offers and encourages users to purchase gift cards for friends.

Loyalty Total Integrations Score Ordering App Usage Channels Score 15 0 21 36

DENNY’S Launch of mobile order service date: May 2017

The Denny’s app allows customers to place orders for takeout or delivery, and they can be tracked and are saved togeth- er with payment information. The solution also displays nutritional information.

Loyalty Total Integrations Score Ordering App Usage Channels 25 Score 95.5 0 25 19.5 44.5 25 45.5

Top Mobile Order-Ahead Provider

COSTA VIDA November 2015 DOMINO’S PIZZA Launch of mobile order service date: February 2012

The Costa Vida app features order-ahead and rewards capabilities, displays special offers and encourages users to pur- The Domino’s Pizza app enables customers to order and pay in English and Spanish, and earn rewards for purchasing. chase gift cards for friends. It connects with Ford Sync to track orders, and customers can place them on the go with Apple Watch or Pebble smart- watch. iPhone users can also access a voice-ordering assistant.

Loyalty Total Integrations Score Ordering App Usage 0 36 Channels 25 Score 59.5 15 21 7 27.5

DENNY’S May 2017 DONATOS PIZZA Launch of mobile order service date: January 2017

The Denny’s app allows customers to place orders for takeout or delivery, and they can be tracked and are saved togeth- The Donatos Pizza app allows customers to place orders and retrieve past order information. er with payment information. The solution also displays nutritional information.

Loyalty Total Integrations Score Ordering App Usage Channels 25 Score 97 25 47

DUNKIN’ Launch of mobile order service date: August 2012

The Dunkin’ app enables order-ahead, gives users free beverages on special occasions and integrates with the DD Card, the Dunkin' prepaid card.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 24 56

EL POLLO LOCO Launch of mobile order service date: December 2016

The El Pollo Loco app allows customers to place and customize orders, choose whether to pick up or receive orders via delivery and pay in advance. Customers can also earn reward points and save their order histories.

Loyalty Total Integrations Score Ordering App Usage 25 97 Channels Score 25 47 7 25 30 62

DUNKIN’ August 2012 FIREHOUSE SUBS Launch of mobile order service date: August 2015

The Dunkin’ app enables order-ahead, gives users free beverages on special occasions and integrates with the DD Card, The Firehouse Subs App allows customers to order online, find locations and earn rewards. Firehouse Rewards, the the Dunkin' prepaid card. restaurant’s digital loyalty program, is available at nearly all U.S. locations.

Loyalty Total Integrations Score Ordering App Usage 25 56 Channels Score 7 24 15 0 36.5 51.5

EL POLLO LOCO December 2016 FIVE GUYS Launch of mobile order service date: August 2011

The El Pollo Loco app allows customers to place and customize orders, choose whether to pick up or receive orders via The Five Guys Burgers & Fries app was developed by food ordering platform Olo, and it allows mobile ordering and or- delivery and pay in advance. Customers can also earn reward points and save their order histories. der history capabilities, among other features.

Loyalty Total Integrations Score Ordering App Usage Channels Score 15 25 14.5 54.5

FREEBIRDS Launch of mobile order service date: June 2016

The Freebirds Restaurant app enables customers to place orders and pay via digital gift cards. They can also scan receipts to earn rewards.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 0 25 32

HUNGRY HOWIE’S PIZZA Launch of mobile order service date: January 2015

The Hungry Howie’s Pizza app allows customers to place and pay for orders and save payment methods for future use. Users can also create profiles, save orders and reorder past purchases.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 28 60

JAMBA JUICE Launch of mobile order service date: August 2015

The Jamba Juice app helps guests skip lines by enabling them to order and pay in advance. Users can save their pre- ferred stores, earn reward points on their purchases and reorder from stored recent orders.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 38.5 70.5

JERSEY MIKE'S Launch of mobile order service date: April 2014

The Jersey Mike’s app, created in partnership with Splick.it and available via both Android and iOS, allows customers to locate Jersey Mike’s restaurants, choose orders from the full menu, pay ahead and store favorite items for easy return ordering.

Loyalty Total Integrations Score Ordering App Usage Channels Score 41.5 0 0 41.5

JIMMY JOHN’S Launch of mobile order service date: December 2014

The Jimmy John’s Sandwiches app allows patrons to order food and pick it up from the closest Jimmy John's location. Customers who sign in with the app can save their order information for future purchases.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 24 56

LA MADELEINE Launch of mobile order service date: February 2016

The la Madeleine app allows customers to make orders, pay for them and earn rewards. It also enables customers to find the closest restaurant location and view the restaurant’s menu.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 39.5 71.5

May 2017 MCALISTER'S DELI Launch of mobile order service date:

The McAlister’s Deli app allows customers to place customized orders, shows nearby locations and displays special offers.

Loyalty Total Integrations Score Ordering App Usage Channels Score 15 25 47 87

MCDONALD'S Launch of mobile order service date: August 2015

The McDonald’s app allows customers to place and pay for mobile food orders. Users can save purchases for reordering, access exclusive discounts and find locations.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 28 60

MOE'S SOUTHWEST GRILL Launch of mobile order service date: April 2012

The Moe’s Rockin' Rewards app allows customers to place and pay for orders as well as earn rewards points. It also enables customers to find the nearest restaurant location.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 8.5 40.5

MOOYAH May 2014 Launch of mobile order service date:

The MOOYAH Rewards app allows customers to place and pay for orders in advance. It also integrates with the MOOYAH Rewards program, a loyalty offering based on points obtained by scanning receipts.

Loyalty Total Integrations Score Ordering App Usage Channels Score 25 25 43.5 93.5

PANERA BREAD Launch of mobile order service date: April 2014

The Panera Bread app is designed to reduce wait times and speed service. It encompasses digital ordering, payments, operations and a revamped guest experience, whether customers are eating in or ordering to go. It also allows for customized menus and use of the MyPanera loyalty program.

Loyalty Total Integrations Score Ordering App Usage Channels Score 25 25 37.5 87.5

December 2010 PAPA JOHN’S PIZZA Launch of mobile order service date:

The Papa John’s Pizza app allows customers to choose between delivery and carryout and features special offers. Users can also create accounts to save orders and earn reward points, and the app also provides information on nearby locations.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 21 53

PEI WEI Launch of mobile order service date: September 2016

The Pei Wei Rewards app lets customers order and pay for meals in advance, saves order history, allows access to Pei Wei's rewards program and displays special offers.

Loyalty Total Integrations Score Ordering App Usage Channels Score 25 25 37.5 87.5

PIZZA HUT Launch of mobile order service date: August 2009

The Pizza Hut app allows orders from a full and customizable menu, helping customers find local deals and the closest stores. It also allows them to pay directly from the app and accepts voice orders.

Loyalty Total Integrations Score Ordering App Usage Channels Score 8 25 8 41

PIZZAREV Launch of mobile order service date: November 2016

The PizzaRev app enables customers to place orders online while earning points for both spending and referring friends. Patrons can also use it to find the closest PizzaRev location and redeem rewards.

Loyalty Total Integrations Score Ordering App Usage Channels Score 18 0 21.5 39.5

PORTILLO'S Launch of mobile order service date: August 2016

The Portillo's app enables patrons to place their drive-through or in-store pickup orders.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 20 52

POTBELLY SANDWICH SHOP Launch of mobile order service date: March 2017

The Potbelly Sandwich Shop app lets patrons place orders for pickup or delivery. It also includes Potbelly Perks loyalty program, through which customers earn “smiles” that are later exchanged for meals.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 28.5 60.5

QDOBA MEXICAN EATS Launch of mobile order service date: December 2016

The QDOBA Rewards app allows users to order and pay in advance, accumulate points in their reward accounts and find the nearest restaurant locations.

Loyalty Total Integrations Score Ordering App Usage Channels Score 0 25 28.5 53.5

QUIKTRIP Launch of mobile order service date: October 2015

The QT app allows ordering for immediate or scheduled pickups.. It also provides exclusive deals and offers and in-app payments and customers can log in to save orders and preferences. The app also locates nearby branches for customers.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 18 50

QUIZNOS Launch of mobile order service date: June 2017

The Quiznos app enables customers to place and pay for orders, as well as earn loyalty points for each purchase. It also includes a customer feedback feature and promotional offers.

Loyalty Total Integrations Score Ordering App Usage Channels Score 15 25 38 78

SHAKE SHACK Launch of mobile order service date: October 2016

The Shake Shack app enables customers to place orders in advance, create custom profiles and find restaurants based on their GPS locations.

Loyalty Total Integrations Score Ordering App Usage Channels Score 18 25 35 78

SHEETZ Launch of mobile order service date: August 2017

The Sheetz app allows customers to order, earn loyalty points, pay with saved gift cards and view nutritional information.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 19 51

SNAP KITCHEN Launch of mobile order service date: December 2016

Snap Kitchen’s app enables users to earn order-ahead prepared meals for pickup. Customers also can schedule meal deliveries for up to a week in advance.

Loyalty Total Integrations Score Ordering App Usage Channels Score 17 25 37 79

SONIC Launch of mobile order service date: May 2014

The Sonic Drive-In app allows users to place and pay for orders in advance, earn rewards and send and receive digital gift cards.

Loyalty Total Integrations Score Ordering App Usage Channels Score 25 25 45.5 95.5

STARBUCKS Launch of mobile order service date: September 2015

The Starbucks app allows users to order drinks and food in advance and pay for them via the app. Customers can also find nearby locations, customize orders and view an estimated time frame for order pickup.

Loyalty Total Integrations Score Ordering App Usage Channels Score 15 25 36 76

SUBWAY Launch of mobile order service date: July 2015

The Subway app enables customers to place orders 15 minutes in advance. Users can save their purchase histories and earn rewards at participating locations.

Loyalty Total Integrations Score Ordering App Usage Channels Score 15 25 32 64

SWEETGREEN Launch of mobile order service date: February 2013

The sweetgreen app allows users to order from a full menu and access a rewards program.

Loyalty Total Integrations Score Ordering App Usage Channels Score 25 25 39 89

TACO BELL Launch of mobile order service date: October 2014

The Taco Bell app allows users to order and pay via the app, set pickup times and use gift cards. They can also opt to receive real-time order status updates.

Loyalty Total Integrations Score Ordering App Usage Channels Score 0 25 38 63

TEXAS ROADHOUSE Launch of mobile order service date: November 2016

The Texas Roadhouse app enables customers to reserve spots in the table queue before arriving. Users can also pay from the table and earn rewards.

Loyalty Total Integrations Score Ordering App Usage Channels Score 18 25 15.5 58.5

TGI FRIDAYS Launch of mobile order service date: July 2016

The Fridays app allows patrons to order food and beverages for pickup, pay directly from the table, find nearby locations, view the menu and add, check and claim points through the chain's rewards program.

Loyalty Total Integrations Score Ordering App Usage Channels 25 Score 60.5 7 28.5

TROPICAL SMOOTHIE CAFE Launch of mobile order service date: March 2016

The Tropical Smoothie Cafe app enables customers to order food and link credit or debit cardsto make on-the-go payments when ordering ahead. It also offers an automatic reward credit earning feature.

Loyalty Total Integrations Score Ordering App Usage Channels Score 0 25 17 42

VEGGIE GRILL Launch of mobile order service date: December 2013

The Veggie Grill Rewards app allows users to order and pay for meals, and saves payment methods for easy future purchasing. It helps patrons locate the nearest restaurants and tracks both purchases and rewards, including a $9 reward for every $99 spent.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 43 75

WAWA Launch of mobile order service date: February 2017

The Wawa app allows Wawa Rewards members to place and pay for orders via their smartphones. It also enables customers to pay in-store with git cards, check their balances, earn rewards and find nutritional information.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 16.5 48.5

WHICH WICH Launch of mobile order service date: June 2015

The Which Wich app enables customers to order and pay through the platform, and is also connected to Vibe Club Rewards, the restaurant’s loyalty program.

Loyalty Total Integrations Score Ordering App Usage Channels Score 0 0 29.5 29.5

WHITE CASTLE Launch of mobile order service date: May 2012

The White Castle app allows customers to order and pay for meals on the go, and to save their favorites for repeat purchasing.

Loyalty Total Integrations Score Ordering App Usage Channels Score 25 25 37 87

WINGSTOP Launch of mobile order service date: August 2011 The Wingstop app allows customers to order up to a week in advance, customize their orders and find their nearest stores. They also can place them with the Wingbot virtual ordering assistant through text messages, Facebook Messenger, Twitter direct messages or Alexa voice orders.

Loyalty Total Integrations Score Ordering App Usage Channels Score 7 25 11.5 43.5

ZOËS KITCHEN Launch of mobile order service date: September 2017

The Zoës Kitchen app enables customers to place orders via their mobile devices. Other features include user profiles, order histories, rewards and a store locator.

Loyalty Total Integrations Score Ordering App Usage Channels Score

Launch of mobile order service date:

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