How unsuccessful digital marketing is hastening the demise of Subway

     Less than 20 years ago, Subway rose to national prominence on the back of a national TV marketing campaign focused on the healthy options, choice, and value that the chain offered. The success of this strategy drove a massive sales and store increase that made Subway the largest QSR chain (by store count) with over 27,000 stores in 2015. As marketing has shifted from TV based to digital, Subway has struggled to make the change and as a result has dealt with consistent sales decreases and store closures. 

    In contrast, several other well-known QSR brands have successfully made the leap to an increasingly digital environment. Starbucks was one of the first companies to launch a mobile app and the current iteration of the app is widely lauded for being easy to use. This combined with a successful loyalty program has driven 16 million active users to the app and led to 40% of US orders being made through the app in 2019. All this user data can be used by the marketing team to customize digital messaging and to deliver these advertisements direct to consumer’s phones free of charge. Digital success has led to consistent same store sales increases for Starbucks stores. While Starbucks is one robust success story, there are also numerous additional examples of using creative digital marketing techniques through social media to drive same store sales increases. One example is Burger King’s promotion that allowed customers to order a Whopper for 1 cent on the Burger King app if they did it from within 600 feet of a McDonalds. This humorous marketing tactic drove a 200% increase in users on the Burger King app, increasing quarterly sales and jumpstarting the company’s efforts to build a successful app ecosystem.

              When comparing these examples to Subway we can clearly see some glaring differences. Subway’s app is not easy to use and its rewards program is not prominently advertised in stores nor particularly compelling from a value perspective. In addition, Subway has continued to focus heavily on TV advertising even as many competitors heavily utilize other mediums like social media. To survive for the next 20 years, Subway will need to significantly invest to modernize its digital marketing strategy and capabilities and add fresh creative marketing talent to become one of the brands pushing the envelope.