Will McDonald’s mobile ordering pilot beef up listless sales?
McDonald’s announcement that it is testing mobile ordering in undisclosed markets arrives on the heels of the chain’s revamped loyalty platform – both bids to revive disappointing sales – but it may not be enough to win customers’ allegiance.
The Big Mac marketer recently revealed that it will kick off a mobile ordering pilot in several locations outside of the United States this year, a feature that will be accessible via the McD application. Although mobile ordering is a must-have solution for any major fast food chain, McDonald’s may not see widespread adoption occur immediately, due to consumers’ preferences for its competitors and lingering skepticism regarding its products.
“It would have been an amazing win if McDonald’s had introduced mobile ordering a few years ago and nailed it, but obviously this has been a challenge for many players in the space, with the notable exception of Taco Bell, whose mobile ordering app has been a nearly standalone success,” said James McNally, senior manager of business development at Prolific Interactive.
“Overall, it’s worth being realistic about the impact mobile can have on McDonald’s future in a broad sense; yes, a mobile ordering app that customers love will only help increase sales, but McDonald’s has other challenges that even a perfect mobile app can’t fully iron out,” he said.
“If consumers aren’t that excited about fast food in general, or prefer a McDonald’s competitor, then no mobile experience is going to solve those fundamental challenges. Still though, given that McDonald’s has presumably learned from its own experiences in mobile, and from its competitors’ efforts, it will be exciting to see what this new release can do.”
Testing on foreign ground
McDonald’s has not disclosed in which specific markets it is currently testing the mobile ordering program, but has admitted that they are not in the United States. The chain’s development team is working to address any kinks that may pop up during the trial run, as well as ensure that the platform will adapt to bricks-and-mortar restaurants in each of the brand’s worldwide regions.
For example, the app will need to reflect menu and price changes based on each user’s area of residence. Additionally, franchisees will be forced to decide how to coordinate food pick-ups, so that customers’ orders will always remain fresh.
Users will also be able to save recent and favorite orders, to allow for easier reordering in the future.
Passionate McDonald’s fans will likely find much to celebrate with this announcement, as mobile ordering offers unbeatable convenience to time-strapped customers.
The strategy is also adept at driving impulse purchases. If individuals know they will not be forced to stand in long lines, they will be much more likely to place an order via their smartphones and stop by a restaurant to retrieve the meal during their lunch break.
However, McDonald’s still faces stiff competition from its fellow fast food chains, which have already made waves in the mobile ordering space. While Burger King’s platform has not enjoyed considerable traction among customers, Taco Bell’s mobile ordering continues to rise from strength to strength.
Its mobile app users are able to customize their orders exactly to their liking and choose last-minute menu add-ons for their meals, such as an extra side of guacamole. The program is also heavily integrated with its mobile rewards, which include a strong gamification element designed to entice younger consumers.
Additionally, McDonald’s ordering app will be unlikely to convert non-fast food fans into loyal customers, meaning that it must cater toward longtime fans of the brand. Integrating it with the chain’s newfound rewards program will be a key tactic.
McDonald’s is reportedly developing a rewards program that hinges on targeted offers for driving frequency and discounts based on previous purchases instead of relying on broad-appeal coupons, as the chain has done in the past (see story).
Users of the Postmates delivery app currently have the ability to order meals from McDonald’s, in select locations. Having an expanded presence on third-party ordering platforms is a smart move for the company, which has suffered from declining revenue over the past year.
Despite possible shortcomings, McDonald’s mobile ordering app will not harm the marketer’s sales. It will undoubtedly aid the fast food chain in offering a more streamlined experience to customers, which it claims is a top priority for its digital team.
The brand has already implemented in-store kiosks into 45 percent of its locations in Europe, a number that suggests consumers’ desire to take control of their own ordering experiences.
The U.S. has typically been the last to receive access to McDonald’s digital offerings, as evidenced by its late app rollout. However, initial downloads have been strong.
During its January earnings call, McDonald’s revealed it has seen 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).
Ultimately, while mobile ordering may not be the silver bullet that McDonald’s needs to jumpstart customer excitement about its brand, the platform is set to be welcomed by longtime customers, a feat that could raise some of those fledging sales higher.
“Mobile can’t solve all of McDonald’s problems, but if you’re looking purely at McDonald’s mobile commerce business, a well-executed mobile app can definitely add some incremental growth,” Mr. McNally said.