Subway's strategy for changing how it handles orders, payments

Subway is a classic example of an analog company that needed a digital upgrade.

The sandwich chain is piloting its new “Fast Forward” design in a dozen restaurants, revamping in-store design with a new color palette, curated music, comfortable seating with USB charging ports and complimentary Wi-Fi, but the upgrade is more than cosmetic — the chain is experimenting with technology to enable faster customer throughput with self-order kiosks that handle payments as the sandwich is built.

Subway is one of the world’s largest franchises, with over 45,000 restaurants globally. This means that to create any kind of chainwide overhaul, the company must convince countless franchisees that it is worth their effort to invest. Thus, this new system must be more than an experimental upgrade; it must prove its worth before it goes in place.

CHRIS RADCLIFFE

Learning from experience

This isn't Subway's first time trying to overhaul its point of sale technology, but it's a lot more ambitious.

Back in 2014, Subway was a major supporter of the telcos' Softcard mobile wallet, launching support at 26,000 locations in what was then one of the largest NFC wallet deployments. This move, which roughly coincided with the U.S. launch of Apple Pay, tied into Subway's rewards program and extended its 2013 support of Softcard's pilot in Salt Lake City.

Despite its ambition, this partnership didn't change much for Subway patrons. Softcard shut down in early 2015, selling off its technology to Google. More recently, Subway has signed on to support Mastercard's Masterpass, but the lesson of its Softcard alliance was clear: To succeed in mobile payments, Subway can't pin its hopes on a third party.

A new recipe

With Fast Forward, Subway is more focused on what's going on in its stores than what's going on in the broader payments industry.

“We didn’t look at other merchants; we talked to our customers,” said Trevor Haynes, vice president of operations at Subway. “We conducted consumer research in Brazil, Australia, the U.S. and other locations around the world. We asked ourselves, Do customers come in more often when there is a kiosk in restaurant; do they spend more? We told ourselves if the customer doesn’t notice the kiosk, we take it out. What we found was the designs were very well received around the world.”

Ultimately, franchisees will have options for how to deploy Fast Forward. "For instance, some restaurants may not have kiosks or the back-of-house line based because of its size and the needs of the guests. There are different design tiers to fit the needs of each location," Haynes said.

With the kiosks, patrons can pay for their meal as they place their order. Patrons then pick up their meals in a designated pickup area, whether the order came through the kiosk, the Subway app or other means.

The app is still a key part of the company's strategy. Forty-seven percent of Subway's customers decide to eat there only an hour before they come in to eat, the company told PaymentsSource last year, and the mobile app is a large part of Subway's strategy for guiding that decision. To further this strategy, Subway hired about 20 technologists from Avanti Commerce, a Vancouver-based company that develops web-delivered digital ordering, engagement and payments technology, last September.