For an industry that has been notoriously slow to adopt new technology, large restaurant brands, like Chipotle and McDonalds, have started ramping up investments in technology and, in some cases, even buying them outright. So, what exactly is going on?

Big Brands are dropping massive sums on tech investments & acquisitions
From McDonald’s to Yum! Brands to Subway, a string of tech company investments and acquisitions have hit the headlines over the past twelve months. In the past 30 days alone, the owner of Taco Bell and KFC has added two pure tech companies to its fold – an omnichannel ordering and marketing platform and an A.I.-based consumer insights company. And this very week, Chipotle Mexican Grill announced it had invested in a self-driving delivery company. It feels like these ventures are happening every other day now and is becoming less and less surprising to hear of these giant investments. But why are big name restaurant brands buying up tech companies? What exactly are their motives, and should we be paying them more attention?

Benefits of investing in and acquiring technology
Having exclusive access to game-changing technology – and the talent behind it – is very advantageous for those aiming to differentiate in a hugely crowded market. What’s more, by bringing tech capabilities in-house, the normal friction between a company and third-party provider is eliminated – the type of friction that can delay innovations and put companies behind their competitors.

For Example: McDonalds invested in New Zealand based company, Plexure – a mobile app vendor that helps companies engage with consumers on their mobile devices, using offers, loyalty programs and mobile ordering to encourage them to order more often. Through this buy-in, not only will McDonalds get new service levels and pricing, but Plexure will also not provide similar services to a list of McDonald’s competitors in the QSR space. It’s a shrewd investment will unquestionably see MacDonald’s get ahead of its competitors around the world and drive sales in some of its biggest markets.

Not too dissimilar is Pizza Hut’s acquiring of QuikOrder – an online ordering company. In doing so, it has improved its ability to deliver an easy and personalized online ordering experience. It frees them from having to create its own ordering service but also reduces its reliance on third parties, allowing them to accelerate growth across its base of more than 6,000 restaurants in the US.

What independents can learn from these investments
Big brand moves in the industry tend to drive the rest of the market. While we don’t all have a couple of million, even billion lying around to make such hefty investments there are learnings that smaller restaurant operators can take away.

From recent investments, we can deduce that big brands are focusing on digital ordering, delivery, and personalization. While these were all talked about pre-Covid, these trends have accelerated with the pandemic. We can see that in anticipation of the post-Covid world, the big brands see an increased role in technology and data to create a more convenient purchasing experience and more efficient customer service.

When the big brands introduce a new customer experience, their sheer size will drive new customer behavior and customer expectations. Remember, their customers are probably your customers too. And they will come to your website or restaurant with new customer experience expectations.

No, the answer isn’t to go out and buy a software company. But you should make sure you are taking advantage of the suite of technologies you have readily available to you that will help drive personalization and making ordering easier. Is your online ordering up to date with images and curbside ordering options? Are you regularly using email marketing to drive visibility? Are you active with new coupons and promotions in your loyalty program? Have you considered SMS marketing? How is your App looking? Are you line-busting with mobile tablets and kiosks? The big brands are making moves, but chances are, you have the technology you need at your finger-tips. Make sure you take advantage of it.