There’s no denying that, to a certain extent, the once Big Mac of the food industry has become a small fry in the restaurant business. After a near 60 years of success as the king of QSRs, the consumer shift away from fast food and to healthier alternatives, coinciding with the rise of fast casual, has taken a big bite out of McDonald’s.
Although the brand is still popular for its inexpensive efficiency — even if millennials don’t want to admit it — the last few years have plagued McDonald’s with challenges. From headlines such as “Fallen Arches: Can McDonald’s Get Its Mojo Back?” and “Still Not Lovin’ It: McDonald’s Sales in US Drop for Seventh Straight Quarter,” it seemed as though foodservice professionals and consumers alike were watching and waiting to see if the world’s largest restaurant company would finally crumble under all the pressure of falling market shares and its giant corporate identity crisis, as the brand struggled to find its footing with an increasingly health-conscious audience.
Even fast-casual success story and founder of Freshii, Matthew Corrin, penned a letter to McDonald’s, calling out the QSR and calling for action by saying, “The reality is that McDonald’s is stagnating…. You are struggling with declining same-store sales, offering franchisees inadequate leadership and fumbling through your menu rather than adding healthier options.”
Back From the Digital Dead? Mobile and Self-Serve Kiosks
McDonald’s has taken some impressive tactics to recapture waning consumer attention. From all-day breakfast, a promise to nutrition changes, and even replacing its CEO last year in an effort to turn the ship around, the brand managed to get a boost in same-store sales, but the improvement has leveled off since. What’s next on the burger joint’s road map?
According to Bloomberg, McDonald’s is going digital. The chain is zeroed in on technology and plans to invest in it for the next two years to improve service. How? By digitizing its stores with new menu boards, setting up stations of self-ordering kiosks, and introducing mobile ordering and paying while boosting its current app.
“Enhancing the overall experience is a critical part of us growing our business,” Jim Sappington, executive vice president of operations and technology systems, said to Bloomberg. “If we’re more convenient, our customers are going to be more willing to come to McDonald’s.”
This tech-savvy, almost fast-casual-like approach not only could buffer the brand as the shifts to a $15/hour minimum wage begin, but this also could draw the millennial crowd back in with a newly highlighted feature: customization. The touchscreens allow guests to customize their order as they wish. At their leisure, hungry visitors can read nutrition facts, compare prices, and build their burger from start to finish. Currently, these kiosks exist in about 7,000 restaurants worldwide, primarily in Europe, but will soon speed up service throughout all its stores.
"It’s very difficult now to ask for something to be added to your double cheeseburger, or ask for no onions," Sappington said. "Doing that through the kiosks, doing that through the app, is very easy, is very natural."
And speaking of the app, not only can it be used for discounts and tracking down the McRib sandwich, but next year will feature mobile ordering-and-paying capabilities. By 2018, this will expand to 25,000 of its locations. As 60 to 70 percent of McDonald’s sales come from the drive-through — meaning most guests do not even set foot into the restaurant — customers will also be able to pick up their meals curbside.
This technological push is already appearing in our Foodable Labs data. Since the fourth quarter of 2015, McDonald’s mobile engagement score jumped from 69.02 to 95.12 — that’s an impressive 26.10 points. And its social restaurant visits score, social restaurants visits (SRVs) being a location-based social media action a consumer takes, increased 23.67 points from 65.37 to 88.97 in that same amount of time.
McDonald’s new technology is bringing it to the right trajectory, but will this success be sustained and truly be enough to bring the brand back from the digital dead? Only time will tell.
McDonald's Mobile and Social Restaurant Visits Growth
Two New Words to McDonald's Vocabulary: Table Service
Who would have thought two words could completely revolutionize the entire experience for the fast-food diner? McDonald’s employees will no longer just be behind the counter. Whether the customer places an order with a cashier or through a digital kiosk, they have the option of choosing their meals to go or having those meals served to them at the table.
The corporation has already started implementing this new structure among its 14,000 United States locations, in hopes that this change will soothe the congestion by the pick-up counter that occurs during peak-service hours. With a mentality of table service, perhaps more consumers would be willing to wait for their meal, as McDonald’s has already been faulted for slow service, likely a side effect to the brand adding more menu items in an effort to attract consumers to their doors. This new process is already available in 500 U.S. stores, particularly in New York City, Florida, and Southern California.
"For the best part of our 16 years, we've asked customers to work around our business model," CEO Steve Easterbrook said. "But now, customers are more demanding, and we're looking to evolve our business."
Despite a rough last few years, McDonald’s is without a doubt an iconic, culture-defining brand for a reason — McDonald’s has a proven record of reinventing the restaurant industry. It has paved the way of fast food long before Chipotle became the poster child of fast casual, and its new direction of tech and table service will certainly change the culture of foodservice and fast food as we know it. Will these efforts make consumers smile and raise the Golden Arches? The future for McDonald’s is still up in the air, but once again, all eyes are on this brand’s movement.