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Restaurant service too slow? There’s an app for that.

Claire Zillman
By
Claire Zillman
Claire Zillman
Editor, Leadership
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Claire Zillman
By
Claire Zillman
Claire Zillman
Editor, Leadership
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June 11, 2014, 1:33 PM ET
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Casual dining might not be casual enough.

Casual dining restaurants — those that offer wait service, liquor, and meals that run between $12 and $50, like Chili’s, Applebee’s, and TGIFridays – have been struggling. Actually, struggling may be putting it lightly; their results have been altogether dismal. Making up about one-third of the full service restaurant industry, the segment generates $160 billion each year, and from 2008 through 2013, its sales have grown just 0.6%; they grew 2% last year, according to Technomic, a research and consulting firm for the foodservice industry.

The recession, of course, deserves much of the blame for casual dining’s disappointing growth. When consumers have fewer dollars in discretionary income, they’re careful about how they spend them. When people want a special evening out, they splurge on a fancier, full service restaurant; for everyday occasions, they want something cheaper than the $10 or $12 burger on the casual dining menu.

But the negative trends in casual dining precede the downturn, says Mary Chapman, director of product innovation at Technomic, and were sparked mainly by the segment’s lack of innovation. “In some people’s minds, they’re all the same. Applebee’s looks like TGIFridays, which looks like Chili’s,” she says.

This monotonous casual dining void has been filled by the fast casual restaurant, like your neighborhood Chipotle (CMG) or Panera (PNRA) where a meal will cost you, on average, $8 and $12, respectively. Fast casual’s cheap, made-to-order food and quick service times appeal to consumers’ appetites and hectic, penny-pinched lifestyles. From 2008 through 2013, fast casual — a $35 billion industry in the U.S. – grew by 11.2%.

But now, at least one casual dining establishment is trying to fight the fast casual phenomenon, one mobile device at a time.

BJ’s Restaurant, Inc., which has 151 locations in 18 states,  launched a mobile app on Tuesday aimed at getting guests to order ahead and dine in. Through the app, customers can place food orders before arriving at the restaurant. Once guests arrive and are seated, the restaurant’s cooks fire up their food  – saving customers the time it takes to decide on their order and place it. At the end of the meal, customers can pay through the app, cutting out the time it takes to get the check and hand over cash or a credit card.

BJ’s isn’t the only casual dining restaurant tapping into tech for a leg up. Chili’s and Applebee’s have announced plans to install tabletop tablets at their restaurants, but while those devices allow for mobile payments, their real purpose is to provide customers with video games while they dine. Neither chain offers an order-ahead option.

The app BJ’s launched on Tuesday comes as a direct response to the promptness of fast casual restaurants, according to president and CEO Greg Trojan. “Time is the most precious commodity for us all,” said Trojan, who’s Huntington, Calif.-based chain reported net income of $21 million in 2013, down from $31 million in 2012.

While sales in the causal dining space have been dismal overall, there are a few bright spots. Buffalo Wild Wings, for instance, has increased sale and profits by more than 20% a year for the past five years and plans to expand its 990 locations to 1,700 in the U.S. and Canada over the next decade. The restaurant is doing well, Chapman says, because unlike the generic bar and grill concepts of so many other casual dining establishments, it has taken a focused marketing approach, touting itself as the go-to location for wings, beer, and sports.

Other casual dining chains have found success through similar efforts at differentiation. Yard House, which serves American cuisine in 19 states, is known for its wide selection of draft beers. Bonefish Grill, Chapman says, has set itself apart with servers who are extremely knowledgeable of the restaurant’s seafood menu.

BJ’s, meanwhile, is using a different tactic to attract customers: warp speed. Will it work?

Faster service time will certainly offer a competitive edge over other casual dining restaurants, Chapman says, especially at lunchtime, when guests want to get in and out in under an hour. But there’s no telling if the order-ahead app will convince customers to sit down for a meal instead of cycling through the Chipotle line.

In the long run, though, there’s little downside for restaurants and retailers to offer mobile payment options. It often saves on transaction fees and gives restaurants the ability to push promotions through a customer’s handheld device, which helps build loyalty, says Michelle Evans, a consumer finance analyst at Euromonitor International, a market research firm. And, she says, it’s no secret that “once it’s easier to make a purchase, you’re likely to spend more.”

About the Author
Claire Zillman
By Claire ZillmanEditor, Leadership
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Claire Zillman is a senior editor at Fortune, overseeing leadership stories. 

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