Key Sources of Potential Tech Driven Cost Savings
- Digital orders save labor by eliminating the need for employees to take orders & payments. YUM! believes it is possible to eventually drive a 100% digital order mix, up from 40% currently. China’s digital order mix is 90%+.
- Digital & loyalty drive higher checks which help leverage labor costs. Taco Bell’s loyalty program is driving a +30% increase in check size.
- Kitchen reworks (with a particular emphasis on improving order accuracy) are improving labor & waste costs. This is particularly important for Taco Bell which has one of the industry’s highest rates of customization.
- Back-of-house solutions for multichannel fulfillment also help improve labor efficiency. For instance, Dragontail monitors delivery driver location & traffic conditions to calculate how long it will take them to return. In turn, the system instructs the kitchen exactly when to start preparing these delivery orders so that they come out of the oven or off the line when the delivery driver arrives.
- Some stores have the ability for cameras to detect when an employee forgets to put tomatoes on a taco (for instance), providing an alert. Management believes vision & voice tech represents a significant opportunity to reduce labor costs.
- YUM!’s innovation team is further evaluating robotics & automation solutions.
More Insights from Yum! Management
- Low-income consumers probably aren’t pulling back as much as expected given that the bottom 25% of salaries are up +10% vs. pre-covid levels (reflecting entry-level wages increasing from $8/hr. to $15).