Thursday, 26 October 2017

McDonald's readies marketing push for mobile ordering

mobilemarketer.com

Brief:

  • McDonald's, the biggest U.S. burger chain with more than 14,000 U.S. restaurants, is preparing to enhance marketing efforts for its mobile pay and ordering, Marketing Week reported. The company has spent this year working out kinks in its mobile platforms and setting the stage for a larger push next year.
  • The company offered mobile order-and-pay in more than 6,000 restaurants by the end of September and expects to reach all 14,000 restaurants by the end of 2017, according to its Q3 earnings report.
  • McDonald's said about 30 million people have downloaded its mobile app, while nine million actively use it. Same-store sales grew 4.1% in Q3 2017 from a year earlier, as total revenue reached $5.8 billion.  

Insight:

McDonald's is in the midst of a significant push to upgrade its in-store and online use of digital and mobile technology, as it addresses the need for updated digital experiences to appeal to today's tech-savvy consumers, especially millennials who generally like to eat out or order in — but often not with fast food chains, according to data from the USDA via Forbes.
This emphasis on mobile presents several challenges, the company acknowledged in its conference call with investors on Oct. 24
"We're really at this point focused on getting the operations right," said Chris Kempczinski, McDonald's U.S. president. "Getting, for example, the crew to understand when a curbside order comes up, how do they take that order, how do they go out and bring the food to the customer. We're spending a lot of time on mobile order and pay.
As the chain is starting to get a handle on these challenges, it is planning to ramp up marketing behind mobile ordering. Doing so any sooner could have turned off customers if, when they arrived to pick up their order, they had to wait. Chains like Starbucks and Chipotle have similarly had to manage behind-the-counter operational changes demanded by the introduction of mobile ordering. 
"What will happen then in 2018 is we're going to flip the marketing switch on it and start to drive really much more increased usage," he added. 
In the past few years, the fast food giant has begun to embrace new technology to reach the next generation of consumers, including digital ordering kiosks and delivery options. It partnered with ride-hailing company Uber earlier this year for UberEats delivery to address consumers' shifting preferences toward convenience. Customers can now request food on a smartphone without ever leaving their home.
As the company realigns its operations to respond to mobile capabilities, it plans to drive orders and store visits with fresh digital offers. "We are increasingly driving traffic and check growth with digital offers," CEO Steve Easterbrook said in the call. "Retention of mobile offers continues to grow month-on-month, with a meaningful portion of the redemptions representing incremental visits."
Despite its efforts to emphasize mobile engagement, McDonald's saw its biggest mobile misstep in July when its app crashed during a free ice cream offer to celebrate National Ice Cream Day, causing customers to take to social media to air their frustrations.