Yum! Brands, the parent company of popular restaurant chains like KFC, Taco Bell, and Pizza Hut, has unveiled significant advancements in its digital and technology strategies, driving impressive growth across its global operations. Yum! Brands says digital sales reached nearly $8 billion during the second-quarter of 2024, representing 50 percent of its total sales mix.
KFC Digital Sales Surge
KFC has seen a remarkable 20 percent increase in digital sales, excluding China, with kiosk sales alone experiencing a 40 percent growth. This surge is a testament to the brand’s focus on enhancing customer experience through digital platforms.
Taco Bell’s Digital Expansion
Taco Bell, which contributes 37 percent to Yum! Brands’ divisional operating profit, has reported a rapid growth in digital sales. In Q2, Taco Bell’s loyalty program saw sales increase by over 30 percent. The digital sales mix for the chain now stands at 35 percent, enabling the brand to further optimize operations, improve labor productivity, and enhance both consumer and team member experiences.
Strategic Leadership Appointments
In a move to strengthen its brand strategy, Yum! Brands has appointed Kalen Thornton, a former PepsiCo executive, as the Global Chief Brand Officer for Pizza Hut. Thornton will oversee global brand strategy and marketing, focusing on creating engaging consumer connections across both physical and digital touchpoints. Additionally, Melissa Friebe has joined Pizza Hut U.S. as Chief Marketing Officer, bringing her 27 years of experience from Taco Bell.
Digital and AI Investments
Yum! Brands is making significant strides in its digital strategy by acquiring, building, and scaling owned platforms that allow greater control over the digital ecosystem and speedier innovations. The first phase includes the deployment of key platforms such as the Poseidon POS system, the Yum! e-commerce platform, Dragontail, Super App, and a global data hub. These platforms are central to the brand’s strategy of leveraging scale for cost advantages and innovation.
Yum! Brands’ leadership team is also accelerating the adoption of voice AI technology, which is now operational in over 100 Taco Bell stores and is expected to be scaled to several hundred by the end of the year. A pilot test is currently underway in KFC Australia. This AI technology enhances consumer experiences and boosts team member productivity through digital menu boards, set to become a Taco Bell standard by 2025.
Lawrence Kim, Chief Innovation Officer, Yum! Brands, said: “We’re accelerating our AI capabilities like Voice AI to enhance the consumer and team member experience.”
The rollout of Voice AI technology in Taco Bell, currently in more than 100 Taco Bell U.S. drive-thrus across 13 states, is designed to enhance back-of-house operations for team members and elevate the order experience for consumers. Benefits include easing task load for team members, improving order accuracy, providing a consistent, friendly experience, and reducing wait times, while driving profitable growth for Taco Bell, Yum! Brands and their franchisees.
Dane Mathews, Chief Digital & Technology Officer, Taco Bell, said: “Tapping into AI gives us the ability to ease team members’ workloads, freeing them to focus on front-of-house hospitality. It also enables us to unlock new and meaningful ways to engage with our customers.”
E-Commerce and Future Growth
On the e-commerce front, Yum! Brands is rolling out its Yum! e-commerce platform at Pizza Hut U.S. and transitioning the platform to Pizza Hut in the U.K. This move is part of a broader strategy to create a seamless digital experience across all markets, with Pizza Hut Canada next in line for the transition.
Despite the challenging global environment, including consumer sentiment impacted by the Middle East conflict, Yum! Brands delivered a 10 percent growth in core operating profit, underscoring the resilience of its multi-brand business model and the growing benefits of its digital and technology investments.
Yum! Brands continues to optimize resources, with a strategic focus on reinvesting in future growth drivers, including artificial intelligence, setting the stage for continued innovation and leadership in the digital space.
In 2023, Yum!’s digital sales approached $30 billion with over 50 percent of its sales coming through digital channels as of the first quarter of 2024. Yum!’s said its digital business has more than doubled since 2019, demonstrating the power of its digital ecosystem and capabilities to meet changing consumer needs.
Baburajan Kizhakedath
