Comments about new digital menu boards during a Wendy’s earning call quickly spiraled out of control on the internet, leading consumers to panic that dynamic pricing may impact the prices of their chicken sandwiches.
On February 15, the chain announced a $20 million investment in new digital menu boards that allowed for ““more enhanced features like dynamic pricing and day-part offerings along with AI-enabled menu changes and suggestive selling,” according to Wendy’s CEO Kirk Tanner.
“We expect our digital menu boards will drive immediate benefits to order accuracy, improve crew experience and sales growth from upselling and consistent merchandising execution,” he added.
For those unfamiliar with the term, surge pricing is where the cost of an item changes based on the demand for it at a particular time. Also known as dynamic pricing, it is most seen in airline tickets and ride sharing.
Advances in ordering technologies give foodservice the opportunity to test dynamic pricing, automated prompts to upsell menu items and even artificial intelligence (AI) in the drive-thru, Kelley Bailie Fechner, director, customer solutions, Datassential, said at the 2022 Chicken Marketing Summit.
The internet revolts
The internet reacted quickly to this statement. I’ll just say that the response was not positive.
“We don’t believe in charging people more when their hungry,” competitor Burger King said on X, formerly Twitter.
Another consumer approached the change as a day trader, debating if she wants to hold onto them “until the market goes back up or sell them now.”
Wendy’s clarifies
After the internet backlash, the chain clarified its earlier statement, denying any plans to increase prices during peak demand.
“We have no plans to do that and would not raise prices when our customers are visiting us most,” Wendy’s said in a blog post. “Any features we may test in the future would be designed to benefit our customers and restaurant crew members.”
It’s all about the messaging
The thing that most consumers don’t realize is that surge pricing is probably already in use. Use an app to purchase chicken at a foodservice or retail store? Your app might offer you a different price than others. Looking for an older, less technology-based example. Happy hours charge less money for food items to attract consumers when restaurants aren’t as busy.
Dynamic pricing could have several benefits for foodservice. It reduces food waste and improves the ability to match customer demand to staffing needs.
But in a world where consumers are already tired of paying higher costs for food, the messaging about these changes must be crafted carefully. Wendy’s says it plans to use dynamic pricing to save consumers money during late night visits – why didn’t they lead with that?
To learn more about consumer trends impacting the chicken industry, make plans to attend the 2024 Chicken Marketing Summit at the Renaissance Birmingham Ross Bridge Golf Resort & Spa in Birmingham, Alabama, on July 29-31, 2024. This one-of-a-kind event will look forward to the consumer of 2035 and the issues that will impact their protein choices.
For the first time, the Summit will have two content tracks. As always, one track will focus on consumer trends of today and what will be expected in 2035 and how advancing digital technology will impact how chicken will be sold and marketed in the future. The second content track will explore how the industry will meet consumer expectations by adapting new and existing technologies to raise and process broilers utilizing fewer resources and with improved welfare, food safety and convenience.
Registration for the 2024 Chicken Marketing Summit is now open. For more information, go to www.chickenmarketingsummit.com.
