Yahoo Finance KFC thinks it has a finger-clickin’ good digital strategy
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Fried chicken is seldom swept up in the “digital revolution” buzz. Except at KFC, where the company is cooking up plans to use everything from augmented reality to the newest Amazon Alexa device to keep customers buying buckets.
Ryan Ostrom became KFC’s first global chief digital officer when he stepped into the role nearly four years ago. He oversees technological change across KFC’s more than 22,000-location restaurant empire in over 130 countries.
“We have a large footprint in the digital technology space,” Ostrom told Yahoo Finance Canada. “We're going to have more order online, pick up in store outlets than Walmart, Kroger, Target and Costco combined.”
The Kentucky-based division of Yum! Brands Inc. (YUM) is the second-largest restaurant chain by sales, serving more than 12 million customers per day. Speeding up those transactions in a way that fits consumer-driven changes in fast food is at the heart of the company’s digital strategy. For Ostrom, it comes down to delivery, online ordering with in-store pickup, and lots of digital kiosks.
Self-serve touch-screen kiosks are fast replacing human cashiers. In Canada, KFC has just one store running a pilot project. Russia and France are fully equipped, and a roll-out is underway in the U.K. Ostrom said it’s led to faster ordering times, as well as bigger orders as guests scroll through options to customize their meals. There’s also the added benefit of freeing up staff previously tied down behind their cash registers.
“We're looking at where table service eventually plays within the QSR space, where you actually start bringing food out to the customers at their tables,” Ostrom said.
“We actually will have more kiosks globally than Bank of America.”
The digital makeover in KFC restaurants comes as a growing number of consumers opt to order online. Shares of Yum! Brands surged when the company announced a partnership with Grubhub Inc. (GRUB) in February.
While app-based food ordering marketplaces like Uber Eats and Grubhub Inc. have grown increasingly popular in North America, Ostrom said customers in Asia often prefer to order online and pick up their food in a store.
“We’re starting to bring that technology and those solutions to the West,” he said. “Seamless interaction between all the technology points, mobile ordering, kiosks, and loyalty programs will make it really fast and easy for customers to engage with the brand.”
Digital changes are underway in KFC’s kitchens as well. The company is testing a voice-based system that cuts back-of-house employee training time down from four to five weeks to about one. In India, Ostrom said employees are using Amazon Alexa-powered devices to learn how to cook up the secret blend of 11 herbs and spices that Colonel Harland Sanders perfected more than a half century ago.
“As our chefs are back of house with their hands deep in flour and they are making our chicken, they can ask a question and visually see a response from the Echo Show, as well as hear a voice,” he said.
Google Glass, Alphabet Inc.’s (GOOG) eyewear-based computer display, is also being tested as a visual aid to help new soldiers in the colonel’s global chicken army.
“The benefit of being in 136 countries around the world is we can try all these activities,” Ostrom said. “By executing these kind of foundational technologies, it will really drive an impact for our business and our franchisees.”
