Dive Brief:

• Popeyes has launched its first-ever loyalty program, called Popeyes Rewards, which provides exclusive access to deals, celebrations, swag and the chance to earn and redeem points from menu purchases, according to a press release emailed to Restaurant Dive. 
• The program is designed so members can earn points with each transaction. The chain is offering a "Welcome to the Popeyes Fam" meal to promote the launch, available exclusively for loyalty members on the Popeyes' app or online. Those ordering this meal from June 17 to July 1 will receive 500 loyalty points.
• The program's launch comes as Popeyes' digital sales make up about 17% of total sales in the U.S. as of Q1 2021 and have contributed to the chain's continued double-digit same-store sales growth throughout the COVID-19 crisis. As of Q1, Popeyes' same-store sales were up 30% on a two-year basis and up 1% over Q1 2020.

Dive Insight:

Adding a loyalty program will likely bolster Popeyes' digital sales and could help the chain gain ground against Chick-fil-A in the intensely competitive chicken category. Chick-fil-A's loyalty program is wildly popular and ranked second, following El Pollo Loco, in a recent consumer survey ranking fast food rewards programs conducted by data research firm Statista.

In 2018, Chick-fil-A had 13 million active users, according to Digiday, and that number has no doubt increased since. Those millions of users interacting with the brand on their mobile phones could perhaps explain why the brand has such a commanding market share lead on money spent on chicken sandwich delivery orders, securing 41% of that spending. Popeyes has a corner on just 12% of that money.

But Popeyes has strong potential for sales growth, driven by a triple-digit increase in digital orders industrywide throughout the past year, coupled with the brand's wildly popular chicken sandwich, which has lifted average unit volumes across the system. In a statement, CMO Bruno Cardinali said Popeyes' fans have expressed their loyalty "time and time again."

"Our goal has been to create a perfect loyalty program that matches and rewards their unparalleled enthusiasm," he said.

There is no doubt plenty of enthusiasm for loyalty incentives across the industry right now, as brands from McDonald's and Wendy's to Chuck E. Cheese and Taco Bell roll out new programs. These rewards programs help restaurants capture a targeted fan base that tends to spend more. Diners are also hungry for increased value and access across their favorite brands.

Popeyes' new rewards program should also enable the brand to better understand its customers' ordering behaviors and more effectively market to them. Another benefit is the potential to drive new customer acquisition, as well. According to a 2019 Publishers Clearing House study, 19% of consumers said a loyalty program would be enough for them to try a new QSR and 30% of respondents said they would download a restaurant app to gain loyalty points. 

One potential challenge as Popeyes joins an increasingly crowded loyalty space, however, is the fight over mobile phone space and how many apps consumers are willing to download. Differentiated perks are critical here, but Popeyes' chicken sandwich, which continues to drive a staggering amount of sales, could be a big enough on its own to motivate adoption.