McDonald’s supersizes mobile sales strategy with 5M installs in Q2

McDonald’s revealed during its second-quarter earnings call that it has seen 12 million downloads of its application and an average check increase among consumers who redeem mobile offers, a feat likely accomplished due to the chain’s focus on welcome incentives for new users.

The fast-food marketer also said it has eight million registered users active in its Mowingo-powered app, which continually refreshes available offers and features a digitized version of a loyalty punch card. McDonald’s ability to garner five million new app downloads this quarter showcases the need for quick service restaurant chains to provide fans with redeemable mobile coupons and welcome offers.

“By comparing the basket size for transactions involving a mobile redemption and those not involving one, and further accounting for other guest variables, we can calculate the actual ROI of each promotion,” said Daniel Dreymann, co-founder and CEO of Mowingo. “The lift in check size is real and I’d attribute it to the perception of getting value.

“Consumers love a good deal.”

The Q2 wins
During this week’s Q2 earnings call, McDonald’s emphasized its focus on local promotional activities, as well as nationally available deals found within its McD app. The app has seen 12 million downloads so far, and maintains eight million registered users.

McDonald’s first-quarter earnings call this year saw the brand reveal that it garnered more than seven million downloads of its mobile app since the fall 2015 launch, proving that welcome offers are directly correlated to high registration rates (see story).

The chain claims that its mobile loyalty card and offers are the reasons for increased app engagement.

Additionally, recent rollouts of mobile order-ahead capabilities and self-order kiosks contributed to its revenue stream.

However, McDonald’s is still struggling to regain its footing in the competitive QSR sector following several stumbles, a notion that is likely one of the driving forces behind its focus on mobile sales-driving strategies.

Per FactSet, the company’s same-store sales increased 3.1 percent this quarter, falling slightly below Wall Street’s expectations of 3.6 percent.

Nevertheless, the chain remains optimistic in its efforts to maintain restaurant profitability, according to chief financial officer and executive vice president Kevin M. Ozan’s remarks during the earnings call.

Reeling in mobile offer redemptions
Stephen J. Easterbrook, McDonald’s CEO, president and director, also revealed during the call that the brand sees an average check increase among customers who redeem offers via the McD app.

This indicates that consumers are likely to spend more when they are able to bundle various deals together and take advantage of the new coupons available in the app.

“One of the reasons McDonald’s app has been so well-received is that promotions in the app are very local in nature – tailored to each market by its co-op of local franchisees,” Mr. Dreymann said. “Mowingo’s decentralized platform allows McDonald’s to think globally while delegating operations and marketing activations to the field.

“A workflow control protects brand integrity: while markets are encouraged to innovate, the company maintains quality control, ensuring a positive user experience.”

However, the brand will still need to develop other digital sales-driving tactics in order to stay competitive in the sector.

With quick service restaurant chains trying harder than ever to fuel in-store foot traffic and sales, next-generation customer engagement strategies will likely see brands leverage multiple mobile technologies, such as portable chargers for smartphones and virtual reality headset packaging (see story).

“A new tool for generating downloads has been made available by Google: The Physical Web,” Mr. Dreymann said. “Promotional URLs broadcast by Eddystone-capable beacons, such as Beaconix’s Smart Beacons, are soon going to be visible on 85 percent of Android smartphones (Android 4.4 and later).

“These beacons can be used both for standalone (no app required) promotions, and to encourage downloads of the McDonald’s app.”