KFC-owner Yum Brands Inc. YUM -0.19% is buying an Israeli-based startup that helps customers order food to go via text, a strategy executives hope will fuel sales as people shift away from fast food and return to full-service restaurants.
Yum is set to use software made by Tictuk Technologies Ltd., a private tech firm founded in 2016, for fast-food ordering through text as well as social-media apps such as Facebook Messenger and WhatsApp, the companies said. The technology turns around a customer’s order in as fast as 60 seconds, said Clay Johnson, Yum’s chief digital and technology officer.
Sales at Yum, which is based in Louisville, Ky., have risen since testing Tictuk’s technology in roughly 900 KFC, Pizza Hut and Taco Bell restaurants in 35 countries, the company said. Financial terms of the deal weren’t disclosed.
As America’s restaurant industry begins to reopen, fast-food companies are searching for ways to keep customers they gained while sit-down restaurants were shut. Many chains are investing in online-order pickup systems to try to make them an appealing option as consumers eat out more.
Tictuk—which can be used for pickup, delivery or dine-in orders—is Yum’s second technology deal in a month. Yum also acquired Kvantum Inc., a Texas-based company that crunches consumer data to determine the best way to spend marketing money by area. That deal is expected to close later this year.
Yum executives say they are focused on tech deals after a surge in online ordering during the Covid-19 pandemic. The company made $17 billion in online sales last year, a roughly 45% increase from 2019 as dining rooms closed amid the crisis and customers ordered food for delivery or pickup instead.
Online orders tend to come with bigger sales and require less labor as they reduce customer interaction with workers, Yum Chief Financial Officer Chris Turner said. “Our digital transactions are a win on just about every dimension from an economic standpoint,” Mr. Turner said in an interview.
Tictuk and its 15 employees will become a business unit within Yum and work on additional tech projects, the companies said.
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