Yum! Brands said digital sales exceeded $8 billion, with digital mix over 50 percent, during the third-quarter of 2024. Yum! Brands owns popular restaurant chains such as KFC, Taco Bell and Pizza Hut in several markets.
Joe Park, President of Yum!’s Digital and Restaurant Technology Ecosystem, is driving the company’s vision to become the leading global digital restaurant company.
Under his leadership, Yum! is enhancing collaboration, consistency, and efficiency across its digital and technology teams, with a strong focus on AI-driven capabilities and leveraging global data assets to scale proprietary technologies. Yum! Brands reveals that its operating profit grew 1 percent in Q3 2024 despite investment in digital transformation. Operating margin fell to 43.1 percent in Q3 2024 from 49.2 percent in Q3 2023.
Yum! is advancing in two key phases of its digital transformation.
Phase 1 of digital transformation focuses on building and scaling foundational platforms, including cloud-first point-of-sale systems, e-commerce engines, delivery optimization, and scalable global data platforms, which house over 80 percent of transaction data.
Phase 2 of digital transformation aims to maximize value creation through AI innovations like labor scheduling, inventory management, consumer feedback dashboards, and AI-driven marketing.
Key Digital Initiatives:
Voice AI at Taco Bell: Taco Bell has deployed voice AI in over 300 stores, making it the largest QSR brand in the world to use this technology, processing over 2 million orders. This initiative is being tested by franchisees and shows promise for enhancing customer experience at the drive-through.
Loyalty Program Enhancements: Taco Bell’s loyalty program is integrated into its digital ecosystem, allowing consumers to easily earn and redeem rewards via drive-through and kiosk personalization. This initiative expanded to 160 stores and is showing strong early results, including increased sign-ups and loyalty transactions.
E-commerce and Digital Menu Boards:
Yum! completed the migration of Pizza Hut U.S. traffic to its e-commerce engine and expanded this initiative to Pizza Hut U.K. and other international markets. The digital menu boards rollout is progressing rapidly, with over 6,000 restaurants now equipped and a goal to make it a Taco Bell standard by 2025.
SuperApp Expansion:
The SuperApp, a modular restaurant management platform, was expanded to KFC U.S., reaching nearly 5,000 KFC and 8,000 Pizza Hut stores across 50 countries. The app simplifies tasks for restaurant managers and team members, enhancing operational efficiency.
AI-powered Operations:
Yum! is deploying AI-powered tools to improve operational efficiency.
AI-driven labor scheduling is now used in over 5,000 Taco Bell U.S. stores, enhancing labor planning and efficiency.
AI-powered forecasts are being used at Taco Bell for both labor scaling and inventory management, with plans for expansion across other brands by 2025.
Yum! launched AI-driven marketing campaigns that personalized consumer engagement. These campaigns saw significant increases in consumer engagement, leading to higher purchase rates and a reduction in consumer churn compared to traditional digital marketing.
Taco Bell U.S. Digital Performance:
Taco Bell’s digital engagement played a key role in its performance, with digital sales increasing by 30 percent year-over-year. The brand’s loyalty program saw remarkable growth, with 90-day active users rising by 50 percent year-over-year. Taco Bell led the QSR industry in value perception and continued to gain market share, driven by its digital initiatives, strong consumer connection, and innovation in menu and pricing.
KFC International’s Digital Strategy:
KFC’s digital sales also saw significant growth, with its digital mix now surpassing 55 percent, up 3 percentage points from the previous quarter. The brand’s investment in click-and-collect services and kiosks has been a major factor in its digital growth. KFC Rewards contributed to a 20 percent increase in digital sales compared to last year, enhancing customer loyalty and engagement.
Both Taco Bell and KFC leveraged Yum!’s digital and technology platforms to optimize their customer experiences. Taco Bell’s success in the U.S. serves as a model for international markets, where the brand continued to see positive same-store sales growth through a focus on brand, food, and value.
KFC’s establishment of seven centers of excellence focused on areas like restaurant design, food innovation, and customer insights is designed to improve both operational and marketing effectiveness, with a strong emphasis on digital tools and data-driven decision-making to ensure sustainable growth across global markets.
Growth Through Technology:
Digital innovation was pivotal in driving Taco Bell’s continued market leadership, with its digital platforms enabling the brand to stay competitive in a tough market environment. Similarly, KFC’s agility in adopting digital tools has allowed it to stay ahead in key regions, including Africa, Latin America, and parts of Asia and Europe.
Yum! Brands’ digital transformation has been a major contributor to growth, with both Taco Bell and KFC expanding their digital capabilities to strengthen customer relationships, improve operational efficiency, and drive sales across global markets.
Baburajan Kizhakedath
