ARCHIVES: This is legacy content from before Industry Dive acquired Mobile Commerce Daily in early 2017. Some information, such as publication dates, may not have migrated over. Check out our topic page for the latest mobile commerce news.

McDonald’s fulfills consumer demands for mobile delivery with Postmates

McDonald’s is joining the shift towards mobile delivery by partnering with mobile application Postmates for a test at 88 New York locations, news that coincides with a business turnaround plan to increase profits and focus on consumer-driven decisions.

The franchise is testing delivery of its full menu in 88 locations in New York with the third-party app, giving in to consumer demands for delivery. McDonald’s is using Postmates, along with many other retailers, to ensure the effectiveness of the feature and to avoid any unforeseen issues as little as possible, instead of developing the service through its own branded app.

“Mobile ordering is certainly not a recent phenomenon,” said Chester Ritchie, senior vice president at Worldpay, Orange Country, CA. “Industry insights suggest now is the time to get in the game.

“The National Restaurant Association found more than three-quarters of consumers ages 18 to 34 say they would order takeout or delivery via mobile device if it were available,” he said. “With that in mind it is no surprise McDonald’s would choose to start offering their own delivery service.

“Many of McDonald’s predecessors who went the way of mobile ordering were not without their problems. Utilizing an outside app may help the fast food chain avoid breakdowns or delays in the technology if consumer response is overwhelming and enlisting the help of Postmates also lets McDonald’s test the waters and gauge consumer demand before putting in the time and resources to build their own platform on a larger scale.”

Profits and sales for the fast food service have been declining, prompting it to develop a new business plan and major restructuring. McDonald’s plans to focus more on customer-based decisions and closer join the industry standards in respective markets to stay ahead in the evolving business, with the delivery service as a reflection of that.

Delivering on demands
The retail industry is shifting more and more towards delivery services, utilizing apps such as Postmates, but also incorporating the services in their own apps. On-demand services are now a staple and a standard in retail, and it is imperative that these food marketers incorporate that.

Consumers now expect to receive commodities or content when and where they want it, in a short time frame. McDonald’s customers have long requested delivery, and the fast food chain is carrying through on that, which opens up a greater chance for extra revenue and creates a more loyal brand image to consumers.

The popularity of Postmates is growing, and brands should be keen to pay attention. This allows retailers such as McDonald’s to foray into delivering without the extra development costs and risks.

An example of ordering Chipotle through the Postmates mobile app

For consumers, the app showcases a consolidated list of delivering retailers, making them more inclined to use the Postmates service. Consumers are reluctant to download a wide array of individual brand and retailer apps, instead preferring to have them all listed in one app for a more seamless and uncomplicated purchasing experience.

Accessible goods
Starbucks recently added several shots of espresso to its mobile ordering strategy by announcing two delivery models, a tactic which will be a game-changer for food and beverage marketers aiming to compete with the brand (see more).

Chipotle also got involved and rolled out mobile-enabled delivery services for users of the Postmates application (see more).

Using mobile is essential with delivery services such as this because this is where consumers are spending all their time. It creates a seamless option that minimally disrupts their lives when ordering and purchasing.

“Today more consumers are choosing smartphones over personal computers and in the restaurant business the focus has shifted from online ordering to mobile,” Mr. Ritchie said. “Additionally, consumers are more willing to transact via mobile, due in part to better security and seamless payment integration.

“Consumer adoption is at the right threshold for fast food and fast casual restaurants to take advantage of the opportunity to put their brand directly in the pockets of millions of customers via delivery services,” he said. “Mobile ordering and delivery can do much more than draw up sales.

“The reason Starbucks has been so successful with its app is because it includes other value-added services for their customers, like loyalty programs and special offers. Mobile ordering can provide behavioral, purchase-oriented data that in many ways justifies the investment and mobile delivery has the ability to make fast food even faster in an increasingly volume-driven industry that no other solution has yet been able to match.”

Final take
Brielle Jaekel is editorial assistant at Mobile Marketer and Mobile Commerce Daily