In the rapidly evolving landscape of quick service restaurants (QSRs) in India, digital ordering has transitioned from a mere novelty to an essential component of the customer purchasing journey. As global chains introduce the "phygital" model, integrating physical and digital experiences, Indian QSRs are critically examining their pace in adopting such advancements.

The Phygital Model in International Chains

Globally, many QSRs have embraced self-service kiosks as a key touchpoint for enhancing customer experience. For instance, chains like Shake Shack and Burger King have heavily invested in kiosks, leading to significant increases in average check sizes and customer engagement. These kiosks offer personalised menu recommendations, loyalty rewards, and more, catering to a range of customer preferences from the fast and efficient "beeliner" to the leisurely "explorer".

“For stores, the benefits are multiple: they can save on counter staff; they can serve more customers; they can consistently upsell and make personalised offers; they can capture customer data through a loyalty program (and prompt diners to sign up if they’re not already members; and they can eliminate the chance of human error by sending orders straight from kiosk to kitchen. The icing on the cake is that the average sale on a kiosk is 5% bigger than those at the counter, with some restaurants reporting uplift as high as 10%,” Viraj Rawat, founder of Big Burgers commented.

The Hesitation Among Indian QSRs

Despite the clear benefits demonstrated globally, Indian QSRs appear more cautious. Several factors contribute to this hesitancy. Infrastructure and Investment: The initial cost of setting up advanced digital systems, including kiosks, is substantial. Given the economic diversity across India, QSRs must consider ROI more carefully, balancing between advanced digital infrastructure and the traditional cost-effective models.

While India is rapidly digitising, the varying levels of digital literacy across different demographics can affect how quickly new technologies are adopted in everyday transactions like those in QSRs.Indian customers often prefer personal interaction, particularly in service-oriented sectors like dining. This cultural nuance might slow the adoption of impersonal digital solutions like kiosks.

Current Digital Trends in Indian QSRs

However, the landscape is not entirely bleak. Many Indian QSRs are making strides in digital integration. Apps are increasingly popular, with features for custom ordering and loyalty benefits. Chains like Domino's India have seen significant success with their app-based ordering system.

“The surge in online food delivery platforms like Zomato and Swiggy has pushed QSRs to integrate digital ordering systems more seamlessly into their operations. Some regional chains are experimenting with in-house apps and contactless ordering systems, tailored to local preferences and languages.

Examples of Digital Innovation in Indian QSRs

McDonald's India has been a front-runner in adopting digital solutions by launching self-service kiosks in select cities, allowing customers to browse the menu, customise their meals, and complete payments without cashier interaction, aligning with global trends and appealing to the tech-savvy urban population. Similarly, Domino's Pizza has extensively leveraged its mobile app in India, introducing features like zero-click ordering, real-time tracking, and integrated payment solutions, making their app a significant contributor to their sales and exemplifying the successful adoption of app-based ordering systems in Indian QSRs. Additionally, Kolkata-based chain Wow! Momo has embraced a digital-first approach in some of its outlets, featuring kiosks for ordering and a digital menu displayed via QR codes, which streamlines the ordering process and addresses safety concerns by reducing the need for physical menus, especially relevant during the pandemic.

“By implementing localised digital strategies, such as app-based ordering that supports multiple regional languages, Indian QSRs have seen a 40% increase in app-driven sales, demonstrating effective adaptation to the phygital model” Mihir Mehta, Restaurant Consultant commented.

Local Challenges and Innovations

While international chains bring global technology trends into the market, local chains face unique challenges that require innovative solutions. In regions where internet connectivity is unreliable, QSRs need robust solutions that can function offline and sync when online.
India's diverse payment ecosystem with options like UPI, Paytm, and other mobile wallets requires QSRs to integrate multiple payment gateways to cater to customer preferences.

Cultural Adaptations

To resonate with Indian consumers who value personal interactions, some QSRs are blending digital enhancements with human elements. Chai Point has introduced a 'boxC.in' smart vending machine, which not only dispenses chai but also allows customization of orders via an attached digital interface. This service combines the convenience of digital ordering with the traditional chai culture in India.

Bikanerwala, this traditional sweets and snacks chain has adopted an online ordering system but retains a strong in-store presence, understanding that many customers prefer to see and select sweets personally. Their approach moderates between full digital adoption and maintaining a personal touch.

“The next phase of “phygital” ties in with the above. How are operators handling proprietary versus third party (and app versus website)? There aren’t many quick-serves in today’s landscape not working to elevate digital ordering and loyalty to complement in-store operations. After all, customers aren’t differentiating between digital channels and the physical locations, rather it all contributes to a single cohesive phygital experience,” Nikhil Bota, co-founder, Kitchen Lord Foods commented. 

How to capitalise efficiently on the phygital trend

Instead of a full-scale overhaul, Indian QSRs could implement digital solutions gradually, starting with mobile ordering and loyalty programs, allowing for smoother transitions and customer adaptation. Additionally, developing digital interfaces that cater to local tastes and languages can significantly boost customer acceptance and satisfaction, as customization and localization are key in diverse markets like India. Investing in educational initiatives about the benefits and usage of digital ordering systems can help bridge the digital literacy gap, enhancing user engagement across various demographics. 

Combining the personal touch that Indian consumers appreciate with the efficiency of digital processes through hybrid models could offer the best of both worlds, maintaining traditional service elements while incorporating modern efficiency. As India continues to embrace digital advancements, the evolution of QSRs into the phygital domain is not just beneficial but necessary, potentially significantly influencing their market positioning and customer loyalty in the highly competitive food service landscape of India.