Monday, March 20, 2017

McDonald's Plays Catch-Up with Mobile

McDonald's wants to catch up to what Starbucks and Panera have been doing for many months--encouraging gadget-toting customers to use advance mobile ordering, adding convenience by speeding up transactions in the store.

Of course, Starbucks was so successful in influencing consumer behavior that its stores were bombarded with advance orders and the company had to reorganize work flow to prevent bottlenecks.

As of today, McDonald's US has more than 69 million Facebook likes, 3.4 million Twitter followers, 2.2 million Instagram followers. Its mobile app allows menu browsing, store locator functions, and more--but no order and pay functions, yet. Bear in mind that this company has a definite digital presence and has experience engaging brand fans.

However, according to one report, McDonald's has lost 500 million transactions to competitors since 2012. That's a lot of transactions. And competition is extremely fierce in the fast-food and casual-dining world, where technology is helping to shape and improve the customer experience.

Big chains have to out-innovate smaller, hungrier rivals (pun intended). Moreover, they have to out-innovate each other to retain market share. Panera has had mobile order for more than a year, and the results indicate it's having an effect on sales. So McDonald's is playing catch-up.

Finally, McDonald's is testing a national mobile system for advance ordering. The initial test involves 29 stores in California (and some UK stores). McDonald's expects to roll the system out month after month, with thousands of stores participating by the end of 2017. Will customers use the new process, and will this be a valuable competitive move for McDonald's?

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