Some of McDonald’s problems seem solvable, like its inability to come up with a huge new product hit every once in a while. Some seem intractable, such as the severe erosion of its brand equity over the past few years.
And then some are, well, opportunities for improvement. One of those seems to be how McDonald’s can keep labor cost in check given the enormous upward pressure on wages of its lowest-paid workers, which has found the chain and its franchisees having to boost pay and promise to do more.
What if McDonald’s and other fast-food chains could offset some of those rising hourly costs for human laborers by eliminating the need for so many of them? That’s the idea behind the self-service kiosks now popping up in US McDonald’s stores after the company saw some success with them overseas.
The burger kiosk is designed to appeal to millennials, “who would rather spend their cash on Chipotle where there’s a bevy of ingredients to choose from and the food is vaguely healthy,” as Eater notes. “With this new Micky D’s machine, guests punch in their order at a giant kiosk and then the burger is delivered to the table. Unlike a regular combo meal, this one comes with an open-faced burger and fries in a little metal basket. Also, customers can choose new fancy toppings like sliced jalapeños and caramelized onions, plus seven sauces. The chain is rolling out these kiosks all over America right now.”
As McDonald’s CEO Steve Easterbrook told investors on an earnings call last week, all its stores in France now have self-order kiosks, which handle more than 40 percent of the orders during busy hours. People like the self-order option, he said, and the line at the counter is shorter, while store management can deploy workers more productively.
Easterbrook also said that stores see higher average checks via kiosk orders. “They can browse the menu for a little bit longer, feel a little less pressure and they just tend to spend more.”
The Create Your Taste experiment can lead to some unusual choices, as Business Insider comments. Case in point: the lettuce leaf bun that McDonald’s Springfield (in Queensland, Australia) shared on Instagram, eliciting a “Wow” from the CYT team in Sydney. McDonald’s Australia is promoting the DIY burgers and hosting an Instameet contest to engage food bloggers and influencers on Instagram.
In one CYT location, McDonald’s also found that the average check size was about a dollar higher, or a 30 percent increase at the time, when a customers used that technology, according to Ryan Buell, an assistant professor at Harvard Business School, who studies the intersection of operations and customer behavior.
Buell noted that some research from 2011 showed that “a seven-second reduction in service times in fast-food restaurants can increase the company’s market share by 1 to 3 percent.”
It’s against this backdrop that McDonald’s is now rolling out the DIY kiosks at its US restaurants, adding ingredients that appeal to the American palate such as jalapeños.
“A window populates alongside the order screen as you add burger elements, so that you can, perhaps, reconsider whether you really want pepper jack with jalapeños and peppercorn sauce,” explains the Los Angeles Times in a review. “Other on-screen options allow you to ‘make it a meal’ and add a drink and fries.”
Of course, what would a new digital platform be without hackers? And, in fact, hackers (of a sort) in Australia recently posted a video on Facebook that managed to give a step-by-step guide to manipulating the Create Your Taste self-serve system so that punters could pay only half the price for a family box that would normally cost $20.
McDonald’s is far from alone among cost-pressed fast-food restaurants developing self-serve kiosks. Taco Bell, Chili’s and Cinemark theaters are pumping up the average order size through various uses of autonomous customer options, such as dessert-ordering tablets at Chili’s with Ziosk.
Other players are taking the self-serve concept even further, back to the days of the automat. For example, Eatsa is a San Francisco startup that is launching automated cafes, Bamn!! offers the “return of the automat” in New York City while Paris offers “organic” automats and Amsterdam has the Febo chain.