Yum Brands to Leverage Cross-Brand Data Amid ‘100%’ Digital Transformation

Yum Brands

Yum Brands is going all-in on data in its ongoing efforts to have “100% of sales powered by digital,” gearing up to combine insights across all its brands.

On a third-quarter earnings call Wednesday (Nov. 1), executives from the quick-service restaurant (QSR) giant, the parent company of Pizza Hut, KFC, Taco Bell and The Habit Burger Grill, discussed the data efforts.

“We continue to expand the Yum Global Data Hub, which captures the vast majority of global transaction-level sales data and other key operational and customer metrics,” Chief Financial Officer Chris Turner told analysts. “We believe this centralized hub is a key asset and differentiator for Yum as we develop leading AI capabilities.”

Next year, he added, the company will leverage the hub’s data to “develop and test new AI-driven capabilities,” ultimately integrating these capabilities into the restaurants’ digital platforms.

He cited examples of personalized recommendations to drive order sizes on eCommerce channels, more informed menu pricing guidance and intelligent tools for restaurant general managers.

Additionally, the QSR giant is not only getting smarter with each brand’s analytics but also looking to unify all its restaurants’ data to drive synergies and expand the scale of its data capabilities. Turner noted that the company will “begin activating” its cross-brand platform in the United States next quarter and through the year.

“This cross-brand platform gives us unprecedented visibility into the ordering behaviors of millions of customers across our four brands,” Turner said, adding that these insights will also be a breakthrough source of learnings for Collider Lab, a marketing strategy consultancy that was acquired by the QSR giant in 2015.

Digital channels make up a growing part of the restaurant industry. The PYMNTS Intelligence report “Consumer Interest in an Everyday App,” created in collaboration with PayPal, which drew from a survey of more than 2,200 U.S. consumers, found that 60% of those who purchased food from a restaurant in the previous 30 days did so using internet-connected devices at least some of the time.

Additionally, Yum Brands is seeing its loyalty programs drive sales. CEO David Gibbs noted that Taco Bell loyalty members spend 40% more each year than nonmembers, and the company plans to expand the program next year. He noted that the company will change the rewards program to make it easier to use “across channels” and boost the perks associated with the program, providing exclusive access to certain products and experiences.

Additionally, the brand will even “integrate its loyalty program with digital menu boards to create an even more personalized experience,” he said, suggesting that the company will adjust in-store menus to appeal specifically to nearby customers.

More than half of all restaurant customers now use loyalty programs. PYMNTS Intelligence’s March study, “Connected Dining: Consumers Like the Taste of Discount Meals,” based on a February survey of more than 1,800 U.S. consumers, revealed that 51% reported using a restaurant loyalty program. Plus, the study found that adoption of quick-service restaurant (QSR) programs had grown 15% year over year.

PYMNTS-MonitorEdge-May-2024