McR&D: How McDonald’s Tests Innovations in Canada and Australia

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As McDonald’s struggles to turn around its long-declining operations in its home US market, the fast food leader is drawing inspiration from experiments and successes in other parts of the world, with markets such as Australia serving as the off-Broadway to the main stage that is McDonald’s US. But is its innovation pipeline helping transform its flagship domestic market quickly enough?

With its DIY Create Your Taste digital self-serve stations now rolling out in the US, McDonald’s tested the concept in Australia. Next up, it’s bringing the platform to the majority of its 1,400 Canadian restaurants by 2017, where it will add self-service kiosks and table delivery with dedicated wait staff, as the Canadian Press reports.

McDonald's Kiosk

As a result, each restaurant will need to hire 10 to 15 more people to fill new roles, including a greeter who will guide customers through the ordering process and new chefs to make the more complex meals.

“We’re looking to match and exceed other restaurant experiences in terms of the personal interaction,” McDonald’s Canada CEO John Betts told the wire service.

McDonald’s Canada is adding nearly 30 different options including five types of cheese and a dozen different toppings. “It used to be uniformity, reliability, consistency,” said Betts. “Now everybody’s got their own way of connecting with the world.”

McDonald’s has been sprinkling Create Your Taste test spots around the US including in California and New York City, but the chain is eager to speed up its US transformation to reverse its slide in same-store sales and re-engage consumers with a brand that has been drifting. Recently, McDonald’s added all-day breakfast in the US in another significant gambit.

McDonald's All Day Breakfast

To be sure, it’s easier to innovate in smaller markets like Australia and Canada, where the stakes aren’t as high and its footprint is smaller. McDonald’s Canada was the first market to launch a “You Asked, We Answered” transparency campaign, which was introduced north of the border before migrating to other markets including the US last year (it’s just launching in the UK, for example).

Canada doesn’t have as much competition, said Betts. Neither does Australia, where in June McDonald’s reported 10 consecutive months of positive sales, according to Entrepreneur. Indeed, Australia has served as a major testing ground for new ideas from McDonald’s, including launching the original Create Your Taste outlets.

McDonald's McCafe

As far back as 1993, when McDonald’s opened the first McCafé outlets in Australia, the chain has tested major innovations there, in part because the market is very similar to the US. Now McCafés have become one of the largest coffee chains in Australia although McDonald’s hasn’t rolled out standalone McCafés in the US, instead sticking with in-store McCafé locations and selling it in supermarkets.

“McDonald’s is innovating and changing again to meet the needs of our customers,” McDonald’s Australia CEO Andrew Gregory said in a statement when the chain introduced Create Your Taste in the market. “All our innovations have been led by Australians. What we’re really doing here is just what our customers have asked us to do.”

In addition to testing a McCafé concept in Australia called “The Corner by McCafé,” McDonald’s ran a promotion there in 2013 that rebranded itself as Macca’s, the local nickname for the brand.

Earlier this year, an Aussie ad campaign featured the tagline, “How very un-McDonald’s,” showing foodie customers surprising themselves by enjoying a “gourmet” meal at McDonald’s.

That attitude might not be a bad idea for the US, where the brand could use a jump start to make customers feel that “lovin'” feeling again.

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