Why QSR innovation demands a new playbook for CMOs

It’s been a long day at work and you forgot to stop at the grocery store on your way home. Now your kids are grumpy, your own stomach is growling and you need dinner fast. How do you decide where to eat? Do you look for what’s healthiest? Quickest? Has the best taste? 

When it comes to choosing a quick service restaurant (QSR) consumers have choices and chief marketing officers (CMOs) need an edge. 

QSR CMOs must innovate to keep pace with shifting consumer demands, competitive saturation and inflation-era pressures. Some of the top concerns for QSR CMOs at the moment include: 

• Rising costs

• Market saturation

• Changing consumer preferences

• Failed innovation

• Innovating too slowly

• Scaling from local testing to national rollout 

• Consistency in operations, products and supply chains

This complexity raises a critical question: What actually drives loyalty and choice for QSR consumers today? 

In this article, I’ll take a closer look at each of those concerns, along with strategies for success. 

Let’s dive in! 

Although the QSR sector continues to grow and experts don’t expect that trend to reverse, margins are under pressure. Inflation is pushing up the cost of ingredients, labor costs are rising and supply chain disruptions are happening more often — with all of those factors cutting into the bottom lines. 

Added to all of those external pressures, market saturation is a serious issue as well. Restaurant Dive declared it’s the summer of chicken for QSRs in June because so many different chains were promoting deals on chicken. Trends tend to come in waves, whether it’s loaded fries, fish sandwiches or adding bacon to everything.

Imagine the average McDonald’s customer in 1965 compared to the average McDonald’s customer today. Consumer expectations prove the cliche “change is the only constant” true! Currently, QSR customers have expectations about health, taste and sustainability that they didn’t have just a few years ago. Even the idea of convenience is evolving. CMOs tasked with meeting these challenges need both a thorough understanding of what consumers want and a robust toolbox for delivering on expectations. 

“While quick service restaurants are racing to innovate with loyalty programs, digital apps, sustainability messaging and customization, our recent survey of over 5,500 US consumers reveals a surprising truth: Fundamentals like taste and location still win.” - PwC 

PwC interviewed 5,500 QSR customers and found that the main reason people choose one restaurant over another is very simple: taste. Price matters, but not as much as taste. The same is true for speed, loyalty perks, digital innovation and so on. The only thing that is as important as taste is convenience—and that has more to do with location than speed of service. 

Apps and delivery services are changing how people define convenience, but much more slowly than you might expect. According to PwC, 96% of QSR meals are still picked up in person, either in the store or in the drive thru. Not only that, but 57% of people decide where to eat based on the restaurant’s proximity to either their home or their work. 

Value also matters, and in times of economic volatility it matters more, but taste and location are still the true drivers of consumers’ decisions about which QSR to choose. 

Consistency in quality and taste across locations also make a difference for consumers. A customer who frequents a location of a particular restaurant near work expects the same quality from a location near their home. 

With all of the threats QSRs are currently facing, missteps are costly. Failed menu items and promotions waste food cost, staff time and marketing spend. Poorly tested messaging or packaging hurts brand perception. 

It’s not too difficult to find examples of failed QSR menu items. Failed menu items alone are expensive, but even something as simple as confusing messaging or poor packaging can be costly. In 2015, Starbucks went with a plain red cup instead of their usual festive seasonal design, and the backlash was intense from people who thought the chain was “scrubbing Christmas from the holidays,” according to DDD Near Me, a website featuring restaurants from the TV show Diners, Drive-ins and Dives. 

Long feedback cycles extend the cost of mistakes. With thorough testing, Starbucks might have been able to avoid the controversy of the red holiday cup. 

Shortening the cycle from idea to consumer feedback is one of the best ways for QSRs to innovate better. Using ideation tools to generate new menu items quickly and testing them with real customers before rolling them out to a wider audience allows brands to optimize and balance value and margin. 

For example, consumers increasingly care about sustainability, and QSRs are responding by making packaging more sustainable. Yet, packaging made from renewable materials that doesn’t preserve the quality of the food will do more harm than good—because quality is the number one concern of customers. 

Testing is the crucial step in the process of improving packaging while maintaining quality. Optimizing based on real consumer feedback means less waste on designs that don’t work well, and finding what does work faster.

“The Fast-Food and Quick-Service Restaurant Market is projected to witness substantial growth between 2025 and 2035, driven by the demand for convenient and affordable dining options and the expansion of online food delivery services.” - Future Market Insights

Although experts are predicting a 5.1% rate of growth for QSRs in the next decade, brands face serious challenges, such as balancing local and regional tastes with scalability. Many menu items  may be successful in one location, but not a candidate for a national rollout. 

At one time QSRs were mostly family destinations, with playgrounds and special kids’ menus. Dining rooms were set up for families. Today, consumers are seeking more flexibility, whether they order online and pick up in the store, drive-thru or have their food delivered. Seating in stores and hours of operation are two areas where brands may offer more flexibility. 

QSRs can serve as meeting places for groups, spots for solo diners to enjoy a moment of peace or for families to gather. Seating arrangements should reflect those different needs, with modular elements so that people can arrange seating to fit their needs, or outdoor dining areas. 

But adapting to the evolving needs and preferences of consumers must be accompanied by ensuring consistency in operations, sourcing and supply. Customers expect at least a very similar experience at any location of Taco Bell, for example. That’s part of the strength of big brand QSRs. New technology, like AI and blockchain, offers some opportunities for QSRs to create more efficient supply chains and sourcing in order to create that efficiency. 

But scaling successfully means more than operational discipline. It also requires learning quickly and applying those lessons across the organization.

CMOs are tasked with walking a narrow path with shrinking margins on one side and opportunities for growth on the other. Choosing the most effective menu items, packaging and dining configurations, testing and scaling calls for tools that let you measure, test, adjust, implement, test again and so on until customers are happy and profits are increasing. 

After all, for CMOs, innovation isn’t just about ideas — it’s about measurable business impact.

Metrics that show incremental sales lift, impact to check size, number of repeat visits, operational cost savings and waste reduction, as well as create connected feedback loops, let you understand what’s working and what’s not.

This is where Zappi comes in — a connected consumer insights platform that helps CMOs reduce risk in menu or promotion decisions and enable quicker pivots.