I bought fast food for a group of people last night. The menu pricing was significantly higher than ordering through the app, which also allowed me to attach a digital coupon.
The pricing within the app is what I would expect to pay, or what I believe is “fair” or “reasonable” for chicken nuggets, French fries, and cheeseburgers.
On the other hand, I have cut my fast food consumption by at least half over the last few years because the published menu prices have skyrocketed.
What possible benefit would a fast food restaurant derive from publishing high prices to the casual customer and drastically reducing them within the app?
They have to be realizing a net loss of customers with this model, right?
In: Economics
Remember that the customers who aren’t using the app are ordering in person in the store. Such a customer is going to weigh the expense of the inflated in-store pricing vs. the inconvenience of leaving the store for the chance at a cheaper meal. Most often that customer stays and pays.
Meanwhile the app user specifically is NOT in the store and has to be enticed with lower prices. That user feels good about getting a deal and goes along with the scheme.
The store owner gets in on the action, too! Suppose that the store inventory and kitchen systems are tied into the app in real time (I assure you, they are). The app drives traffic into the store just in time to sell through expiring inventory. The app drives traffic into the store with “happy hour” deals that even out demand across the day, simplifying the labor schedules. The app replaces at least some expensive TV, radio, and print advertising. Huge wins for the store owner across the board.
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