Taco Bell Answers Your Request: It Wants to Ring Your Doorbell
Niccol -- who's been heading up the Yum Brands (YUM) chain since January -- is trying to keep Taco Bell relevant.
- Taco Bell will be rolling out a loyalty program, rewarding repeat customers. This is the kind of stuff that flies at fast-casual darling Panera Bread (PNRA), but it could also appeal to the value-minded millennials that Taco Bell attracts.
- Catering is also something that folks typically associate with comfort-food outfits including Boston Market or Cracker Barrel (CBRL), but it's also on the menu at Taco Bell. The chain is testing catering in Houston with plans to roll it out across the country.
- Taco Bell is tinkering with smaller locations. It introduced a small store carved out of a shipping container at Austin's South by Southwest festival last month, and it plans to open as many as 200 more. It's also testing urban locations with open kitchens that take up just half the space of the traditional unit.
- Ordering at a register or drive-through window is so passe. Taco Bell is also one of the many fast-food chains gearing up to roll out online ordering later this year.
Gears and Gorditas
"Even though it's the No. 1 request from consumers, we have to make sure we can give them an experience that's consistent with Taco Bell," Niccol told Nation's Restaurant News in explaining the challenges of rolling out delivery. "We have to figure it out, and I can tell you right now we don't have it figured out."
It's not just about logistics, though assembling a fleet of capable local drivers isn't easy. Taco Bell's biggest advantage -- its low prices -- is also the biggest roadblock. The chain is known more for the quantity of its food than the quality, and giving hungry patrons deep value will make it hard to get away with charging too much for delivery. Will there also be minimum order sizes for delivery, because you can get a lot of food at Taco Bell for just a few bucks if you order off the chain's Dollar Cravings menu?
Taco Bell won't be the first fast-food chain to introduce its own delivery service. Delivery is a key component of the Jimmy John's sandwich shop, and Burger King (BKW) has been offering delivery in select markets for a couple of years now. Starbucks (SBUX) has also announced that it will be testing delivery later this year.
Taco Bell doesn't need to be working on so many new initiatives. It has come through with three consecutive years of positive comps, but the success has stemmed mostly from its innovative menu additions. This is the year that Taco Bell moves beyond the kitchen to win your business, and that move may soon take it right to your front door.
Motley Fool contributor Rick Munarriz owns shares of Cracker Barrel Old Country Store. The Motley Fool recommends and owns shares of Panera Bread and Starbucks. Try any of our Foolish newsletter services free for 30 days, and check out The Motley Fool's one great stock to buy for 2015 and beyond.