In the midst of a lot of bad financial news from department stores late last week, a major announcement from Wendy’s received little attention outside of QSR industry circles. Attributing the decision – at least in part – to minimum wage hikes, Wendy’s execs said they would begin installing up to 6,000 self-serve ordering kiosks in their restaurants.
The business and political implications of this move could be profound. Wendy’s can gain a leg up in the market by reducing its labor costs, thus pushing other restaurant companies to follow suit. Perhaps more importantly, they could also drive a huge wedge in the public debate over minimum wage increases. Opponents of government-mandated wage hikes will now have a perfect red-headed, freckle-faced poster child. You can hear them now: “See, raising wages actually hurts U.S. workers!”
But it all hinges on a few big questions: How will consumers respond? Will the promise of more convenience and (theoretically) lower-cost food bring diners through Wendy’s doors? Or will the job market implications and (theoretically) poorer customer service keep diners away?
When the news broke on Friday, our company launched a nationwide survey of U.S. adults to gauge their attitudes about Wendy’s announcement and kiosk ordering in general. We started by looking at how people felt about the socio-political trade-offs of self-serve kiosks:Our sample of just over 1,500 U.S. adults painted a clear picture. 39% of respondents believe kiosks will have a net negative impact, compared to 22% who believe it will be positive. Notably, twice as many people believe the negatives “greatly” outweigh the positives, versus those who believe the contrary.
What’s driving these numbers?
The first thing we notice is gender. Women were much more likely than men to view kiosks as a negative.Age was another strong factor. GenXers are clearly the most supportive of kiosks, while Boomers are the most likely to be against them.We also thought, given the latent political undertones to this conversation, that we would look at the party affiliation of respondents. And, while it’s worth noting that they were over 2X more likely than Democrats to support kiosks, even Republicans clearly viewed the innovation as a net negative.
Let’s look at the only numbers that really matter: How do frequent QSR diners feel about kiosks?The ratio among the most frequent fast food eaters holds pretty steady with the overall numbers. Negative sentiment outweighs positive sentiment by just under 2 to 1.
All of this must spell doom for Wendy’s and the kiosk manufacturing industry, right? Maybe not. Look what happened to the results when we asked specifically about Wendy’s.These numbers tell a much different story. Yes, 9% of respondents and 24% of Wendy’s diners say that they will eat there less as a result of the kiosks. However, 12% of respondents and 34% of ‘in-market’ diners say they will eat at Wendy’s more. The largest group of regular Wendy’s diners will be unaffected.
The numbers look even better for Wendy’s among the most frequent QSR diners. 17% of respondents who eat fast food at least once a week say they will visit the restaurant more because of the kiosks. 10% say they will visit less.It’s obviously way too early to tell how Wendy’s kiosk experiment will shake out and whether they’ll inspire more QSRs to follow their lead. A lot will depend on the execution, the marketing, the ease of use for customers, and the overall experience. But, for now, it’s interesting to see the disparity between how people feel from a socio-political impact perspective and how they intend to behave. People may care a lot about the minimum wage – they may just care about convenience and savings a lot more.