Fast Five Shorts | Is App Fatigue Real And A Reason To Move To Digital Wallets?

Summary

Omni Talk Retail Podcast Summary

Episode: Fast Five Shorts | Is App Fatigue Real And A Reason To Move To Digital Wallets?
Release Date: March 14, 2025
Hosts: Omni Talk Retail Team
Guests: Chris Walton, Dave (CEO of Portillo's)

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1. Introduction to Portillo's New Loyalty Program

The episode kicks off with a discussion about Portillo's latest initiative to combat app fatigue among consumers. Portillo's has launched a new loyalty program, Portillo's Perks, which integrates with digital wallets instead of relying solely on a traditional mobile app.

Host [00:09]: "They hope that their new loyalty program based in digital wallets can offer personalized options for guests and businesses without the issue of app fatigue."

According to a report from Marketing Dive, Portillo's Perks focuses on rewarding customers based on their frequency of visits and consumption habits rather than accumulating and redeeming points.

Portillo's CEO [00:09]: "The frequency, the element of the reward structure combined with digital wallets rather than traditional app based programs, allows us to truly personalize offers so we're able to surprise and delight our guests with easy access and relevant rewards."

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2. Dave's Perspective on App Fatigue and Digital Wallets

Dave, the CEO of Portillo's, shares his insights on the increasing trend of app fatigue and the potential shift towards digital wallets.

Dave [01:08]: "I do not know if this will have any impact on sales or traffic, but what I can say is app fatigue I believe is real."

He elaborates on the saturation of apps in the Quick Service Restaurant (QSR) sector, highlighting how platforms like DoorDash and Uber Eats are becoming primary channels for order and loyalty management.

Dave [01:23]: "When you have individual apps where they might have loyalty or they even don't and they're just trying to get your, your information I think is not going with where the consumer is."

Dave expresses skepticism about whether a digital wallet approach will significantly boost loyalty but acknowledges its novelty and potential as a pilot program.

Dave [03:00]: "Most of the consumers use their digital wallet more than anything."

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3. Host and Dave Discuss the Viability of Digital Wallets

The host probes deeper into the practicality and benefits of moving loyalty programs to digital wallets, drawing comparisons to existing models like Starbucks.

Host [03:11]: "I, I'm not understanding the benefit of this either... I use my Starbucks app five times a week. No problem at all."

Dave responds by differentiating between daily-use apps like Starbucks and more sporadic QSR visits, suggesting that digital wallets may better cater to the latter.

Dave [05:10]: "I think apps work if it's, if it's retail or, or, you know, something that's around more fashion or retail, not necessarily food."

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4. Chris Walton Challenges the Notion of App Fatigue

Chris Walton enters the conversation with a counterpoint to Dave’s assertion, vehemently disagreeing that app fatigue is a legitimate concern.

Chris Walton [05:53]: "I 100% disagree with David... app fatigue is just baloney for many people that just can't get people to find value in their app."

He argues that the real issue lies in the lack of value provided by many apps, rather than an inherent tiredness of having too many apps.

Chris Walton [06:20]: "Chick Fil A's got the best app out there... Portillo's app is someone who's been in this space. I’d grade it like a 5 or a 6 at best compared to what you get from a Chick Fil A."

Chris suggests that improving the functionality and value of existing apps could be a more effective strategy than shifting to digital wallets.

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5. Personal Experiences and Usage Patterns

The discussion shifts to personal anecdotes, illustrating how different users interact with apps and digital wallets.

Chris Walton [04:05]: "I don't think it's that much different than having an app... it just appears like a boarding pass in your wallet. Yeah, it's really easy to use, so I don't see any downside here."

Dave shares his minimal app usage, relying instead on aggregators for his food orders, highlighting a trend towards consolidation.

Dave [08:02]: "Personally, I was going to say, you guys know my affinity for Sweet Green... I have almost no apps now related to restaurants and QSR. It's all aggregators."

The host brings up their own usage of the McDonald's app seasonally, showcasing varied user behaviors.

Host [08:23]: "I download the McDonald's app every summer again, because it seems like during the summer, that's the time that we're using it."

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6. Conclusion and Final Thoughts

The episode wraps up with a reflection on the differing perspectives of Dave and Chris, marking it as a rare moment of disagreement between the hosts.

Host [07:53]: "That the tribe is the first time Chris and I have ever disagreed in this entire."

Despite the disagreement, both Dave and Chris acknowledge the complexity of the issue, emphasizing that the effectiveness of digital wallets versus traditional apps may vary based on consumer behavior and the specific context of use.

Dave [08:20]: "I think it's different if you're a loyalist and you go to Portillo's every week or every two weeks."

Chris Walton [08:23]: "Right, because there's no value in them for you."

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Key Takeaways

• App Fatigue Debate: While Dave acknowledges app fatigue as a real phenomenon influenced by the proliferation of apps, Chris Walton disputes its validity, attributing the issue to the lack of value in existing apps rather than the number of apps themselves.

• Digital Wallets vs. Traditional Apps: Portillo's initiative to integrate its loyalty program with digital wallets represents a strategic shift aimed at personalization and reducing app dependency. However, its success remains uncertain and is viewed as a pilot worth testing.

• Consumer Behavior Insights: The conversation highlights varied consumer behaviors, with some relying heavily on specific apps (e.g., Starbucks) while others prefer aggregated platforms like DoorDash, indicating that the effectiveness of loyalty strategies may be segment-specific.

• Value Proposition is Crucial: Both perspectives agree that providing tangible value to users is essential. Whether through enhanced app functionality or seamless digital wallet integration, the core objective remains to offer benefits that resonate with customers.

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Notable Quotes

• Dave [01:08]: "I do not know if this will have any impact on sales or traffic, but what I can say is app fatigue I believe is real."

• Chris Walton [05:53]: "I 100% disagree with David... app fatigue is just baloney for many people that just can't get people to find value in their app."

• Dave [03:00]: "Most of the consumers use their digital wallet more than anything."

• Host [03:11]: "I use my Starbucks app five times a week. No problem at all."

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This episode of Omni Talk Retail provides a nuanced exploration of the ongoing debate surrounding app fatigue and the potential shift towards digital wallets in the retail and QSR sectors. By juxtaposing differing viewpoints and real-world experiences, the discussion offers valuable insights for industry stakeholders considering similar strategic pivots.

Transcript

[Host]

Portillo's. I can't even say the name of the restaurant. The hot dog chain. Clearly I'm not a frequent, frequent visitor at the hot dog chain.

[Chris Walton]

Missing out and missing out.

[Host]

I'm missing out. They hope that their new loyalty program based in digital wallets can offer personalized options for guests and businesses without the issue of app fatigue. According to Marketing Dive, Portillo's has added a loyalty program called Portillo's Perks in which rewards are based on frequency and consumption habits rather than banked points redeemed by the consumer. The frequency, the element of the reward structure combined with digital wallets rather than traditional app based programs, quote allows us to truly personalize offers so we're able to surprise and delight our guests with easy access and relevant rewards. End quote. Portillo's CEO said, Dave, because you are our double chicken. Dave Sweet Green loyalist, you have the most QSR experience. That means what do you think of the idea of driving loyalty via a digital wallet versus an app? And do you think that app fatigue is a legitimate reason to press forward with a wallet based approach?

[Dave]

I do not know if this will have any impact on sales or traffic, but what I can say is app fatigue I believe is real.

[Host]

Really? Tell me more.

[Dave]

So I think this concept of food aggregators, I'm not even aggregators delivery like you have Doordash, you have Uber Eats, you have toast, you have chow. Now where you have a plethora of QSR restaurants at your fingertips that also have loyalty connected to it like DashPass, I think that is a more seamless way to the Amazons of food and delivery and pickup. And so when you have individual apps where they might have loyalty or they even don't and they're just trying to get your, your information I think is not going with where the consumer is. I think having something that's a little bit more with the daily use case of, of, of a digital wallet is something that is novel and interesting. Now will it actually drive that level of loyalty and, and repeat that that, that they're hoping? Not sure but I think it's a really interesting pilot to test. That's outside of the app. Personally, I was going to say, you guys know my affinity for Sweet Green. Yeah, I couldn't tell you the last time I used the Sweet Green app. You know, everything I do is through DoorDash because my, my, my, my whole world through that and when I'm just there I just, just order it Normally, especially considering the loyalty doesn't exist or go as far anymore. But at least a, you know, sample size of 1. I have almost no apps now related to restaurants and qsr. It's all aggregators, so.

[Host]

Interesting.

[Dave]

I'd be interesting to see if something like this works. But if you think about it, most of the consumers use their digital wallet more than anything. So fish, where your fish with the fish are is what I'll say, right?

[Host]

Interesting. Yeah, I, to me, like, I don't know if I'm not understanding this correctly, but to me this is like the equivalent of just a digital version of like my Starbucks card, like my gold card that's now like, I, I'm not understanding the benefit of this either. I don't know if I can side on you with the app fatigues portion of it because I think when you are frequenting certain places, like Starbucks for example, like I use my Starbucks app five times a week. No problem at all. But I think you're bringing up an important point though that I hadn't thought about, which is like, yes, now there's all this consolidation that's happening and are you just going directly to your, your delivery apps, your Uber eats, your door dashes? Chris Creets, where do you fall?

[Chris Creets]

Yeah, first of all, I'm updating Dave's contact information in my phone to Double Chicken Dave.

[Host]

Yes, that's how, that's the only way we refer to him here.

[Dave]

I love that it's going.

[Chris Creets]

Yeah, I mean, I think, I think it's funny, right? I'm, I'm like, let's be real, I'm a, I'm, I'd be a little self conscious to have a hot dog ordering app on my phone. Like where, where have I got to in life where I have a hot dog ordering app? So, so I don't, I mean, I don't think it's that much different than, than having an app. It's like, you know, you still give them your information, you still sign up with your email and to your point, it just appears like a boarding pass in your wallet. Yeah, it's really easy to use, so I don't see any downside here. I think the, the interesting part I, I used it this morning or I played with it this morning. I lived in Chicago for, for 10 years, so I was interested in this one. One of the interesting things I thought was you don't earn any of their loyalty rewards or perks and a visit doesn't count unless you spend at least $10, which I thought was like a really interesting kind of basket building price point for them. But I like the concept. I get why people aren't going to install one more app for a restaurant that maybe isn't so core to their identity, like Starbucks. So I like the idea.

[Host]

Okay.

[Dave]

I think apps work if it's, if it's retail or, or, you know, something that's around more fashion or retail, not necessarily food. And those food is the delivery apps, not specific restaurants. Starbucks is different because Starbucks is a daily routine than if you go to a restaurant once every three, four weeks or maybe, maybe you get a hot dog every day. You know, you do. You.

[Host]

We don't judge. We don't judge people. People's QSR habits on this show. That's another whole, another podcast. Okay, Chris Walton, I know you have some differing opinions here based on our prep discussions, but what is your thought on app fatigue, and where do you fall within all of these opinions?

[Chris Walton]

Yeah, I. Well, first of all, app fatigue, I 100% disagree with David, with all respect. Like, I, I have been hearing about app fatigue since 2010. I think it's just a baloney excuse for many people that just can't get people to find value in their app. That is essentially why you're hearing this. So the second piece of this to me is, you know, what's, what's going on at Portillo's from an executive perspective, you know, if you think digital wallets are better, like, Chris seems like he liked it. Okay, just say that. Come out and say that. Yeah, don't say that. It's because people have app fatigue. That's just, that's just baloney. They have app fatigue because you haven't been providing value to them. So you've talked about Starbucks. Dave, I would disagree with you here. Chick Fil A. Chick Fil A's got the best app out there. And so contacts matter. So Portillo's. But, and here's the other thing. Portillo sites pound, like the article says they do. $9 million a year, and with volume like that, your customers should want to use your app. I like Portillo's. We have one in Minnesota. I go there regularly. I get more than hot dogs. They also got nice Italian beef sandwiches, I might add. And their app, their app is someone who's been in this space. I, I'd grade it like a 5 or a 6 at best compared to, you know, what you get from a Chick Fil A. So. So I think that's the real issue here. And that based on, on the recent performance, because they've had a down year, too. I wonder if the executive team really gets that, or is just kind of fumbling in the dark for trying to find an answer to loyalty when it might actually be staring in the face. Because getting Chris to do this is new. It's a new consumer acclimation issue that you're creating, and you don't know what's in front of you. Whereas if you can get your actual app to work harder for you, as other people like Chick Fil A could do, I think that's a smart move. So I don't think it's an either or situation either at the end of the day, but I don't think you should be like, we're disavowing our app because of app fatigue. I think that's just absolute bs.

[Host]

All right, well, there you have it. That the.

[Dave]

The tribe is the first time Chris and I have ever disagreed in this entire.

[Chris Walton]

I know, right? Yeah.

[Dave]

Eight times.

[Chris Walton]

Did I bring you to my side, though, Dave, or what? I don't.

[Dave]

Partially. I. I don't need a thousand different apps. I think I. I think it's different if you're a loyalist and you go to Portillo's every week or every two weeks. That's different. Like, I still have some qsr, but there are other ones. I'm just like, I haven't used you in a couple of months. Like, I'm gonna get rid of it.

[Host]

Yeah.

[Dave]

Yeah.

[Chris Walton]

Right. Cause there's no value in them for you. Right, so. That's right.

[Host]

But, yeah, I mean, I download the McDonald's app every summer again, because it seems like during the summer, that's the time that we're using it. So I. I don't know. I guess to each. To each their own.