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Boston Market on Tapping AI to Combat Fraud, Meet Mobile NOVEMBER 2020 FEATURE STORY (p . 7) Boston Market On Tapping AI To Combat Fraud, Meet Mobile News and Trends Deep Dive Scorecard KFC opens robotics- How AI can fight fraud The latest mobile Customers’ Needs 11based Moscow QSR 17and meet consumers’ 21order-ahead provider using facial recognition, demands for seamless rankings mobile wallet payments experiences TABLE OF CONTENTS What's Inside A look at how artificial intelligence helps restaurants improve workflows and 3 boost sales via mobile apps while pinpointing potential fraud attacks Feature Story An interview with Slaton Smith, chief marketing officer at Boston Market, on the 7 company’s plans to implement AI solutions that can help it boost fraud detection and meet customers’ evolving demands News and Trends Recent mobile order-ahead headlines, including two new California laws ensuring the safe transit of food with third-party delivery services and Los Angeles 11 International Airport’s recent expansion of its mobile order-ahead service with more than 20 airport restaurants Deep Dive An in-depth look at the benefits that investing in AI-based fraud prevention 17 and customer service features can bring QSRs 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 52 ® 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. © 2020 PYMNTS.com All Rights Reserved 2 WHAT'S INSIDE Artificial intelligence (AI) has been a transformative in and order out during the pandemic. A study that tool for the restaurant industry in many areas, im- examined $150 billion in eCommerce transactions proving users’ experiences with food service mobile from 2018 through 2019 found a 32 percent in- apps while lending businesses valuable data about crease in fraud attacks affecting the food and their customers. Smart machine algorithms have beverage industry during that period, illustrating allowed food delivery times to be accelerated, while just how much is at stake if fraud prevention is not AI-enabled voice assistants are helping restaurants up to par. rapidly fulfill orders. AI is not only being adopted to AI can be leveraged to analyze and tally credit card improve workflows and grow revenues but has also transactions similar to how banking transactions been enlisted in the fight against fraud. are examined. The technology enables more intel- There is good reason for quick-service restaurants ligent decisions when it comes to identifying and (QSRs) to add AI to their arsenal of fraud preven- predicting fraud by providing a meta-analysis of at- tion tools, too, especially as more consumers stay tacks, allowing QSRs to create fraud profiles and © 2020 PYMNTS.com All Rights Reserved 3 WHAT'S INSIDE determine where threats may be located. Research than half its current sales, according to CEO Steve suggests that a variety of indicators, such as geo- Schulze. location, address verification and CVV verification, Restaurant chains are seizing the opportunity to can help companies pinpoint and reject likely fraud gain long-term customers by partnering with tech- attacks. nology firms that can help them tailor their mobile experiences to consumers’ preferences. Mexican Around the mobile order-ahead space fast food giant Taco Bell has teamed up with QSRs around the world are deploying safe, con- AI-powered platform Certona to help personalize tactless ways for customers to order and pay for menu recommendations and deals for its mobile their food to boost industry recovery from the on- app users. The AI platform supports guest prefer- going COVID-19 pandemic. Fast food chicken ences, dining history, location, menus and pricing. chain KFC recently introduced its first completely The chain said its goal is to use the latest machine robotics-based restaurant in Moscow. Customers learning (ML) and AI technology to target specific who enter are greeted with a self-serve kiosk that promotions and menu choices based on custom- utilizes facial recognition so diners can order with- ers’ ordering histories. out touching the device, and payments can be made via Apple Pay and other mobile wallets. For more on these stories and other headlines from the mobile order-ahead space, read the Tracker’s The pandemic is also driving many consumers to News and Trends section (p. 11). download mobile order-ahead apps for the first time and to rely more heavily on off-premises or- Leveraging AI to tackle fraud prevention, ders like takeout, delivery and curbside pickup. customers’ new needs Southern California-based Nekter Juice Bar is one The pandemic continues to make digital and mobile such chain that has seen its app usage and loyalty ordering investments a necessity for restaurants, program sign-ups significantly rise. The company and many are turning to advanced technologies like said digital orders have risen from about one-third artificial intelligence (AI) to streamline their opera- of its business at the pandemic's outset to more tions. These tools hold promise in numerous areas, one of which is fraud prevention. In this month’s © 2020 PYMNTS.com All Rights Reserved 4 WHAT'S INSIDE Executive Feature Story (p. 7), Slaton Smith, chief marketing officer for Boston Market, explains how the chain INSIGHT plans to utilize AI to combat evolving fraud threats, What are some of the cost benefits of investing personalize customers’ experiences and ultimately in unsupervised AI and ML tools? How can these technologies help QSRs boost their bottom lines and ensure the company’s success in the future. reduce the costs associated with chargebacks? “This year, consumers turned to mobile apps and online Deep Dive: How QSRs can profit by bringing AI ordering to limit person-to-person contact at their favor- to the fraud-fighting table ite eateries. Quick-service restaurants have adapted to A growing number of consumers are turning to mo- mobile order-ahead options and delivery platforms to meet the demand. These buying options are so common- bile and online channels to order food from QSRs place that consumers will expect businesses to maintain as the COVID-19 pandemic continues to grip the them well after 2020. nation, but this is leaving the industry more open But with an increase in mobile and online orders comes to fraud. Restaurants are scrambling to implement a greater risk of fraud, especially card testing. Not only does card testing lead to expensive chargebacks on digital technologies that can help them keep their small, fraudulent purchases, but it also wastes time, re- platforms and their customers secure, but many sources and inventory. And those costs to your stock — and your brand — add up fast. That makes AI-driven are overlooking a powerful tool that can help them fraud detection more important than ever. in this fight: AI. This month’s Deep Dive (p. 17) ex- Many businesses use supervised machine learning amines how restaurants can leverage AI to spot to prevent fraud. But alone, the technology is limited. and eliminate fraud while simultaneously improv- Because it relies on historical data, supervised machine learning has to learn from past decisions. It could be slow ing customer experiences and helping companies to detect the kinds of shifts in consumer behavior we’ve reap long-term financial benefits. witnessed in 2020. But advanced AI uses both unsupervised and super- vised machine learning to detect anomalies in everyday purchases. It uses payment data, location data, unique customer data and digital identifiers to detect fraud in real time. This establishes identity trust or risk in real time. QSRs should employ AI that marries supervised and un- supervised machine learning. With the help of Kount’s Identity Trust Global Network, businesses can weigh each order’s level of trust against historical proof and real-time trends. Advanced AI means reducing charge- backs, saving inventory, maintaining brand loyalty and spending more time managing the lunch rush than wor- rying about fraud.” VIK DHAWAN vice president of products at Kount © 2020 PYMNTS.com All Rights Reserved 5 WHAT'S INSIDE Five Fast Facts $23.6M 72% The amount QSRs are losing Share of restaurants that have per 2,000 locations from implemented mobile ordering slower drive-thru times capabilities in response to COVID-19 80% 67% 13% Segment of consumers who say Share of diners who have shifted Portion of 3,500 restaurant they are dining out less because to digital to order their food operators who have added they now prefer ordering takeout curbside takeout since March and delivery © 2020 PYMNTS.com All Rights Reserved 6 Boston Market On Tapping AI To Combat Fraud, Meet Mobile Customers’ Needs © 2020 PYMNTS.com All Rights Reserved 7 FEATURE STORY The restaurant space has seen explosive growth in restaurant’s chief marketing officer, said that while the number of mobile and digital orders customers Boston Market only recently began examining the have placed since the COVID-19 pandemic began. technology, it is bullish on the positive effects it This shift has prompted many eateries to rely on could have. emerging tools like AI to better manage various as- “I’m very excited about what AI can do for restau- pects of their operations as consumers transact rants, and we are looking at how it fits with Boston remotely. The technology is also credited with Market right now,” he said. “I believe AI is the fu- helping them meet diners’ demands for seamless ture of the restaurant sector, and it will help [us] run purchasing experiences as well as enabling them smoother, sell more and be more profitable.” to battle fraud.
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