How Taco Bell Accelerated Progress on Digital and Mobile Initiatives

November 10, 2015

When Taco Bell tried to deliver new digital and in-store technologies for its customers and team members, the quick-service restaurant chain felt like it wasn’t able to move fast enough. With employees working on these new initiatives scattered across different departments, progress bogged down and there wasn’t enough cohesiveness.

So in July, the chain created a new, 20-person team focused on Digital Innovation and On Demand. It brings together employees with backgrounds in marketing, IT, operations, communications, and finance. The team, which sometimes calls itself Taco Beta, is housed in the QSR giant’s corporate headquarters in Irvine, California. Taco Bell has about 6,000 locations around the United States; it is a division of $13 billion restaurant operator Yum! Brands.

Lawrence Kim, director of the new team, joined Taco Bell from Samsung Electronics and, prior, Procter and Gamble. InnoLead spoke recently with Kim about the Digital Innovation and On Demand team’s accomplishments so far; how it tests (and sometimes kills) new ideas; and what its objectives are moving forward.

Why the Team was Formed

InnoLead: What was the impetus behind the formation of the Innovation and On Demand team?

Lawrence Kim: It was formed to help us understand where we can go as a company for both consumers and team members at the restaurant level. It was a vision by our leadership team to think about how we bring new consumer and team member experiences to life by leveraging technology.

InnoLead: What is the makeup of the team?

Kim: It started several months ago with a small task force, and has grown to include about 20 individuals. We initially called it Taco Beta. It’s a cross-functional team comprised of marketing, IT, internal communications, operations, and finance, and we’re basically tasked to think different. [The team reports up to Tressie Lieberman, VP of Digital Innovation and On Demand.]

Before this official team came into place, the company had different task forces assigned to solve different challenges.

InnoLead: Taco Bell launched its mobile app a year ago, before this team was formed, calling it the “biggest innovation since the drive-thru.” [The photo-laden app makes it possible to send digital gift certificates to friends, or customize an order that will be ready when you arrive at the location. See the video below.] How is the company’s approach to innovation different now?

Kim: It took two years to bring the mobile app to life. There were so many team members and functions involved. When we took learnings from that project, we realized we wanted to streamline our approach and be more collaborative, pulling together different team members with different experience. Now, we collaborate within our team, then circulate the ideas and get learnings from across the company.

I’d say the mobile app launch was a catalyst for how this team came to be. The mobile app just took a long time to launch, and rightfully so as it was so new to this space. But…we needed a different mindset that could focus on speed and innovation, and bring new technology to the world.

Cultivating and Testing Ideas

InnoLead: How does your team come up with ideas?

Kim: We try to step out of the office as much as we can. We’re always talking to our consumers via social media, and talking to third-party partners and team members. If we just go out into the marketplace, we’ll see the innovation that’s happening.

But for innovations that are not yet happening, our team members and consumers give us the best ideas. They’re telling us how we can be enhancing their experiences.What we do is try to identify what an opportunity is – try to tackle challenges we see either through consumer research or restaurant research. We identify core issues, and see if an opportunity can be identified and tackled through technology. Then, we’ll look at a prototype and discuss if this is something that can be addressed with our core resources.

InnoLead: Do you have an example of what the team has worked on or brought to fruition so far?

Kim: Our delivery test is a good example. We’re partnering with DoorDash to make this work, because delivery has been and continues to be the No. 1 request from our consumers. Understanding that it was high demand, our team was challenged to test this and test it quickly and figure out if it was something worth moving forward with.

We had to focus on the company’s core fundamentals – speed, quality and customer service – and find a partner that can tie those in, which is why we connected with DoorDash. We tested the service in a few weeks [Kim actually went on a few deliveries himself] in Stanford and Palo Alto [California], and received solid results in the first week or two.

Then we approached ways to expand, and delivery is now in about 100 cities.

Some Projects Need to be Killed

InnoLead: How do you evaluate the success of the On Demand and Digital Innovation program?

Kim: Every project has its own metrics. We’ll check sales growth, brand engagement, effectiveness, and consumer and team member research, which is done by our consumer research team at our Insights Lab. We will see if the project is meeting the metrics we established for it.

We also evaluate key metrics before launching a project, which is one of the beauties of having this team. As much innovation as we’d like to push forward, we simply can’t take on every single project. Some have to be killed because they aren’t meeting expectations. The projects we’ve taken on have met established criteria from the beginning.

In that way, we have a startup mentality. We’re always in beta, and when a test doesn’t move forward, we just crush it. [Taco Bell often tests new ideas, like kiosks that diners can use to place their orders, at a store close to its headquarters in Irvine, Calif. It’s known as the “Sandbox Store.”]

Collecting Feedback

InnoLead: How do you gather consumer feedback?

Kim: Again, each project has its own approach. For delivery, when we tested, we got feedback from our Insights Lab team, which went out to the delivery markets directly to get feedback from customers. They asked about their user experiences and if it met their expectations of food quality, speed, accuracy. We received a lot of positive feedback from them.

Then we confirmed feedback with our third-party partners, and synched the information from consumers and from DoorDash.

Next Destinations

InnoLead: What are the team’s objectives moving forward? What will the team be working on a year from now?

Kim: The speed is numbing – both in the QSR [quick service restaurant] space and technology in general. A year from now will be very fascinating, with virtual reality and mobile moving so quickly. Who would have thought that the on demand and delivery space would have evolved so quickly, but now you have Amazon, DoorDash, Uber. It’s brilliant, but at the same time, it’s mind-blowing.

For us, we have to figure out what elements and technologies would apply and have the most impact for our brand. We’re always looking to enhance our mobile app and [website] experience. From a team member standpoint, we’re testing things like digital communications boards, ordering kiosks [see photo below], and virtual kitchens where customers can see their food being made. [A virtual kitchen is a display that lets diners watch food preparation behind-the-scenes.]