Jack In The Box Leads Late Night With ‘Munchie Meals’ And Dance Club Lighting
Burger King, Domino’s, and Taco Bell are also doing well with night owls thanks to digital engagement tools, xAd says in its Q2 foot traffic report.
On average, visits to Jack In The Box’s 2,200 franchises tend to be fairly slow compared to other quick service restaurants during the daylight hours, but the burger chain’s share of foot traffic jumps almost 60 percent higher between the 12am and 3am, according to location marketplace xAd’s Q2 foot traffic report.
In comparison, Domino’s Pizza, the other QSR that have traditionally served as destinations for young, nighttime diners, sees a 34 percent average rise during the midnight period versus overall fast food visitation times.
To put that in further context, Burger King’s and Taco Bell’s late night foot traffic increases are 28 percent and 21 percent, respectively.
Jack In The Box’s promotion of its “Munchie Meal” — make of that menu item what you will — and its shift to a more club-like lighting and party atmosphere during the wee hours are the main reasons for its late night lead, says xAd.
Still, the emphasis on courting late diners has been a positive for all four of those QSRs, particularly when compared to mainstay fast foot places like McDonald’s and casual diners like Panera Bread. (Again, further context: Jack In The Box has a 4 percent slice of the overall foot traffic that QSRs attract.)
“These QSR night owls are thinking beyond normal mealtimes and getting increasingly creative,” says Sarah Ohle, xAd’s senior director, insights & innovation. “Domino’s, for example, is relying heavily on digital in the late night hours, making it easy for their customers to engage with their mobile devices (yes, including emoji filled tweets) long after their competitors close.”
The report represents “geo-precise ad requests observed in xAd’s platform mapped back to defined business locations,” says xAd of its foot traffic methodology. It does say that each ad request represents “a real consumer on their smartphone while at a QSR restaurant.” The analysis was conducted on 37 million unique consumer visits between April 1 and June 30, 2016.
Fast Food Accelerates, Fast Casual Slows
In general, Q2 was a time of solid performance for QSRs, as foot traffic rose 5 percent higher compared to fast casual dining establishments. While the South continues to lead in fast food visitation, the Northeast saw a 4 percent gain compared to the national average during Q2 as the winter frost finally melted and consumers stepped outdoors, the report found.
xAd’s foot traffic data showed that the fast food category comprised over 80 percent of the 37 million visits analyzed in this report. QSRs, such as McDonald’s which remains the undisputed category hegemon with a 36 percent share of that market, “are slowly, but surely” gaining share back from fast causal dining challengers thanks to cheaper food promotions, such as KFC’s $5 Fill Ups and updated in-store experiences including Taco Bell’s new higher-end cantinas.
While xAd noted that digital engagement tools from mobile ordering to the use of emojis in their social media messaging have appealed to consumers, its report didn’t look at the direct impact of location advertising on visitation rates.
“This specific report is intended as a reflection of consumer foot traffic rather than a measurement of ad impact,” Ohle tells GeoMarketing. “However, there are powerful implications for marketers trying to reach consumers using location-based marketing. By understanding foot traffic patterns of where people go — which often times may even differ from what they say in self-reported surveys — marketers are able to understand the best times and places to reach consumers with a meaningful and relevant message.”
Still, the report did credit promotions and the introductory of a loyalty program for helping turn around visits for beleaguered fast casual Mexican-style chain Chipotle.
“Chipotle, once the most promising fast casual restaurant, suffered a series of hits in recent months because of their E. Coli outbreak,” the report notes. “However, recovery efforts and aggressive promotions such as offering free burritos and guacamole seem to be working. Despite a drop after the end of the promotions, Chipotle share still increased by about 8 percent between Q1 and Q2 as they successfully fought off rivals for traffic.”
Nevertheless, Chipotle’s foot traffic topped out in April — the same month it initiated the free burrito promo. Foot traffic slipped a bit when the freebie ended in mid-May and again in June, xAd notes. In any case, Chipotle’s moves have kept it competitive against its primary rival, Qdoba Mexican Eats (which is owned by Jack In The Box).
While Qdoba was able to take advantage of Chipotle’s bad press during the E. Coli outbreak, the gains appear short-lived, according to xAd. Since January, Chipotle’s won back 4 percent of visitation share versus Qdoba.
“Economic uncertainty and aggressive deals are leading to a resurgence in the fast food industry. In the first quarter of 2016, McDonald’s, Burger King, and Wendy’s all saw growth in same-store sales,” Ohle says, noting the shift back to QSRS versus fast casual.
Meanwhile, the ongoing “breakfast wars” between QSRs and fast casual is also evolving, as all sides seek to build more foot traffic for those meal offerings.
“Subway gained foot traffic share quarter over quarter, including a 4 percent increase in share during breakfast hours (6- 10am) compared to many ‘morning’ brands as their ‘2 for 1 breakfast’ promotion brought customers through the door,” the report states.
As competitive pressures rose, both McDonald’s and Starbucks experienced small drops in morning visits.
“Starbucks also made changes to their rewards program which may not have gone over well with their loyal ‘gold star’ coffee drinkers,” xAd says. “Meanwhile, Dunkin’ Donuts saw a 1 percent boost, driven by more traffic in the Northeast (the brand’s top market) as the weather warmed up.”
VR, AR, Loyalty — Trends Or Fads?
Location and loyalty were major trends during Q1, xAd previously observed. Looking ahead, the burst of activity by local businesses seeking to capitalize on Pokémon Go’s use of mapping and augmented reality have brands wondering if they’re witnessing a new marketing avenue or a one-time craze that will burn out quickly.
“Virtual Reality and Augmented Reality are huge right now and there are major implications for marketers trying to drive consumers to business locations,” Ohle says. “AR specifically is such a natural fit for QSR as it brings together the digital and physical worlds for marketers and can be tied directly to business locations.
“McDonalds in Japan was the first QSR restaurant to really capitalize on the excitement over Pokemon Go by turning nearly 3,000 locations into Pokemon gyms,” she adds. “In Q3, we expect to see marketers getting really creative with the trend in terms of promoting new products and promotions to drive in-store sales — we’re really excited to see how it evolves.”