Here’s What's Trending in Franchise Innovation for 2024
From QSR to retail and beyond, franchises are using technological innovations like augmented reality and artificial intelligence to stay competitive and deliver the best customer experience possible.
In 2024, the landscape of franchise innovation is rapidly evolving. Franchisors in a wide variety of industries are leveraging cutting-edge technologies and adapting to shifting consumer behaviors to stay ahead of the curve.
1851 Franchise spoke with Marty Flanagan, vice president of brand growth at Valhallan ESports to explore some of the key trends driving franchise innovation in 2024.
Technology Reigns Supreme
In a variety of franchise industries, technology is heavily used to enhance the customer experience and drive revenue growth. Technology shapes consumer habits, from online scheduling for appointments to curbside pickup and dedicated mobile apps; retail franchises are embracing a plethora of tech solutions to cater to the evolving needs of modern-day consumers.
Consumers are constantly seeking a more personalized experience. This holds true within the retail franchise industry. A study conducted by Forrester in 2016 found that 77% of individuals are willing to pay more for personalized experiences. Augmented reality (AR) is emerging as a game changer in meeting this demand, especially in the beauty sectors where brands can use the technology to showcase potential outcomes of cosmetic services. And the convenience factor only goes so far in seeking out this individualized approach to selling a service or product.
“They're willing to pay more, but they're also willing to travel more,” Flanagan said. “Consumers are also willing to go out of their way, even if it’s less convenient, for a better, more personalized experience.”
That being said, technology can go a long way in increasing both personalization and convenience. For example, omnichannel experiences are gaining momentum, especially with fitness brands. This technological innovation allows members to utilize services virtually anywhere through live classes, on-demand sessions and mobile app integration.
The Digital Transformation of Franchising
Artificial intelligence (AI) is driving the digital transformation of the fast-paced quick-service restaurant (QSR) world. The aftermath of the pandemic has accelerated the adoption of digital solutions and has given consumers a taste of technological solutions that they’ve quickly become accustomed to. For example, many franchises are using AI to drive their kiosk and drive-thru services for consumers who desire convenient ordering options that are efficient and interactive.
Beyond improving the consumer experience, innovation is increasing revenue. Loyalty programs are undergoing a major shift as well, as they transition towards data-centric frameworks driven by AI algorithms that analyze consumer preferences and behaviors to deliver personalized promotions and recommendations.
While some worry that AI — and technology in general — are stripping away chances for human connection, Flannagan argued that technology can actually aid in improving personalized outreach and connections between a franchise and consumer.
“As humans, we can't remember everything and if technology should be doing anything, it should be increasing that personal human interaction,” he said. “It’s not there just to make the job easier; it does make the job easier but the benefit of that is it gives you more time to increase personal interaction. Automation can remember personal information, like birthdays, and allow for personalized messages.”
Personalized automation feels more human, but even more, Flanagan believes that the data technology can capture and assist business owners in remembering or recognizing key information about their customers, which actually leads to a more genuine connection.
Embracing Innovation for Future Success
As we navigate the evolving landscape of franchise innovation, one thing is clear: adaptation and innovation are imperative for sustainable growth and success. Franchisors must remain receptive to new technologies and creative approaches that engage customers and optimize business operations. And better yet, they should aim to be transparent in how they are using technology to improve the experience of their customers. Big changes in technology can feel overwhelming and worrisome, but the more the consumers understand about what it can do and the positive impact it can make, the better.
“Using AI to enhance the customer experience starts with education and getting rid of the fearmongering that's happening out there about AI,” Flanagan said. “This allows consumers to understand that AI can be their friend and it’s not going to be taking over the world.”
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