McDonald’s Goes Back To the Future (and Its Roots) For Growth


McDonald's CEO Steve Easterbrook kiosk create your taste 2017

McDonald’s is advancing its turnaround plan that began in 2015. And its goal, in any market, is to surprise and delight; be more relevant and immediate; and take advantage of the best technology and customer experience thinking to keep customers coming back for more. No tall order, right?

McDonald's app mobile order and pay

While it’s continuing to invest in product with sustainable beef and fish, as well as localized limited time menu items such as the popular Shamrock Shake (and this year, a high-tech straw) to woo people into its stores, McDonald’s is going back to the future in order to retain and win customers by refreshing its app to include mobile order-and-pay functions along with delivery options.

McDonald's digital kiosks

The world’s largest fast-food (it prefers “informal eating out”) chain is doubling down on its original positioning to convert casual to committed customers while investing in digital and mobile technology and personalization to increase loyalty.

“We’ve lost hundreds of millions of visits from our core customers—students, teachers, construction workers” and others said Lucy Brady, senior vice president for corporate strategy and business development, to investors at its March 1st Investors Day event in Chicago. “We don’t need to be a different McDonald’s, but a better McDonald’s.”

McDonald's 2016 US new Chicken McNuggets ad commercial

Its own research indicates that customers want McDonald’s to do what it does, only better. The company’s recent, biggest-ever survey of customers showed that it has lost about 500 million US orders over the last five years, primarily to other fast food and even burger chains, not to fast casual restaurants that have been serving up health-conscious fare.

Convenience has always been a hallmark, so it’s expanding tech-driven ideas embodied in its Experience of the Future, including more create-your-own kiosks, mobile ordering and a curbside-pickup that scheme that evolves its iconic drive-through ordering system. Its recently relaunched app in India already offers McDelivery, which will be rolling out to other markets.

McDonald's app delivery McDelivery

As noted in its global growth plan announcement, the innovations connect to the brand’s roots:

In the 1970s, McDonald’s revolutionized convenience in the drive-thru to make getting high-quality food easy. Now, that experience is being transformed once again. By enabling mobile order and pay through the McDonald’s app, customers can personalize their order while skipping the drive-thru line and instead choosing curbside delivery. If customers choose the drive-thru, they will simply read the already placed order code to the crew and their mobile order will be ready for pickup at the window. These more efficient enhancements will speed up the process and allow more customers to pass through our drive-throughs. Mobile order and pay will be launched in 20,000 restaurants in some of our largest markets, including the U.S., by the end of 2017.

McDonald's Next Hong Kong Create Your Taste theater kitchen

Given the concentration of Golden Arches in and around major metro areas globally, it sees big opportunities for increases in urban deliveries in its top five markets: the US, UK, France, Germany and Canada. As it works with its franchisees, it’s expanding its “experience of the future” design that includes Bluetooth-enabled table service, even if it doesn’t go as far as its McDonald’s Next Hong Kong experience, with its exposed theater kitchen, above.

At its heart, McDonald’s is going back to the playbook that made it the world’s top fast serve eatery and best-known food brand in the first place. That includes improving core burger products Big Mac — witness its new “There’s a Big Mac For That” campaign in the US — and Quarter Pounders while continuing its commitment to fresh, healthy fare (see its refreshed Chicken McNuggets spot below), and owning its traditional value positioning.

It’s been testing, a la Wendy’s, burgers made from fresh, not frozen, ground beef, part of its sustainability commitment along with sustainably-sourced fish for its Filet-O-Fish sandwich.

Globally, it’s also looking to win market share from Starbucks and other coffee purveyors, big and small, with more McCafé locations.

As the new McDonald’s UK spot above highlights, “The coffee market has got a bit over-complicated, hasn’t it? But with McCafé, none of the frills or fuss. Only freshly ground beans, making great tasting coffee. It’s simple.”

It’s been one of the big successes in recent years at McDonald’s, so the chain is devoted to continuing to bolster that business and touting the sustainability of its beans to engage millennials who value transparency and ethical food and beverage choices.

“We’re not the same McDonald’s we were two years ago or even six months ago,” said Steve Easterbrook, the British company veteran who has been CEO for about two years (with a short stint as CEO at the UK’s Asian eatery Wagamama for some outside perspective).

As he noted in this week’s investor meeting, “We have fundamentally changed the trajectory of our business over the past two years. Now, we are fit for purpose, ready to build on our momentum and transition to focus our efforts on profitable, long-term growth. We are building a better McDonald’s, one that makes delicious feel-good moments easy for everyone, and I believe the moves we are making will reassert McDonald’s as the global leader in the informal eating out category.”

McDonald's new store design