Sonic has a new weapon to compete with McDonald's and Chick-fil-A
- Sonic plans to roll out mobile ordering across the United States by the end of the summer.
- The chain started offering mobile ordering as a test earlier this year, with roughly 20% of locations now allowing customers to order ahead using an app.
- While drive-thru-centric chains have to overcome major roadblocks with mobile ordering, Sonic's drive-in model makes it easy for customers to order via app, executives told Business Insider.
OKLAHOMA CITY, OK - Sonic is rolling out mobile ordering across the United States - and it could give the chain a key advantage against drive-thru rivals.
The drive-in chain plans to make mobile ordering available across the US by the end of the summer, executives announced on Tuesday. Currently, roughly 20% of Sonic locations offer mobile ordering, with locations in Oklahoma starting to test the service earlier this year.
"Once you use this as your way to Sonic, you'll never go back," Kim Lewis, Sonic's vice president of digital solutions, told Business Insider prior to the company's earnings on Tuesday.
Mobile-ordering apps have become expected and almost mandatory across the fast-food industry. However, in a business where up to 70% of sales come through the drive-thru window, adding mobile ordering isn't necessarily straightforward.
Some chains, including Chipotle, are testing drive-thrus in which customers can place mobile orders ahead of time. Other chains such as Chick-fil-A and McDonald's have attempted to address the problem with curbside pick-up, with customers waiting in their cars for employees to bring their orders to them.
"There is not really a benefit to ordering ahead if you still have to sit in the drive-thru," Lewis said.
Sonic has the unique advantage of already having a model that operates in a similar manner to curbside pick up. While getting the behind-the-scenes tech up to date slowed down the initial roll-out, executives say that actually adding mobile ordering to locations has been shockingly smooth-going.
"We absolutely anticipated that there were going to be some pretty major adjustments that we needed to make," Lewis said of the chain's first mobile-order test location.
Instead, the biggest issues haven't been operational. It's just a matter of figuring out how to best convince customers to download the app.
Sonic is driving downloads by offering its Happy Hour deal of half-off drinks, typically available only from 2 to 4 p.m., at all hours of the day to customers who order via mobile. Down the line, Lewis says the chain plans to offer personalized deals exclusive to the app in order to draw in customers. Sonic is planning on launching national advertising to promote mobile ordering this fall.
Executives said that mobile plays a role in the chain's plan to improve traffic and increase average check. While executives said that the chain is still working out some glitches and kinks with the app, CEO Cliff Hudson said in a call with analysts on Tuesday that customer satisfaction is, on average, higher in mobile orders.
Sonic's same-store sales declined 0.2% in the most recent quarter, with the company missing analysts' expectations on revenue. As the chain looks for an edge against price-slashing rivals, mobile ordering is front-and-center in the chain's plans to regain momentum.