McDonald’s, the Chicago-based fast food restaurant (QSR) giant with more than 40,000 locations in more than 100 countries, is leveraging its digital platforms to transform the way its restaurants are run.
During a conference call with analysts on Thursday (April 28th), McDonald’s President and CEO Chris Kempczinski shared his view that digital ordering is reshaping the restaurant industry, delivering capabilities that begin through customer engagement and ultimately lead to major operational changes.
“Digital changes everything,” he said. “So today, [with] 90% of the customers who come to my restaurant, I don’t know who they are. I don’t know their previous purchase. I don’t know what their buying pattern is… As I get better visibility into this customer, I can actually track and identify their preferences over time.
He added that this allows the restaurant to serve that customer faster and simplifies the displays they see both on their own devices, through the brand’s app, and on the restaurant’s menu boards. Additionally, the company can tailor deals and offers to that customer’s taste, providing a “much more bespoke” experience.
Looking ahead 10 years, Kempczinski predicted that with these insight-gathering capabilities, data on consumer buying behaviors will transform in-store and in-store operations.
“You can integrate it with restaurant operations, and it gives you the ability to do automation,” he said. “This gives you opportunities for speed of service, positioning. This has social benefits. So, it can change the whole economic profile of the unit for the better of what a restaurant looks like.
Over the past few months, PYMNTS research found restaurant orders were down. PYMNTS’ April study, “ConnectedEconomy™ Monthly Report: 3 Ways Consumers Are Dealing With Inflation,” which draws on a March survey of more than 2,800 U.S. adults, found that 45.8% of consumers ordered from restaurants online the previous month, down from 46.7% in February and down from 49.4% in January.
Read more: 6 in 10 consumers buy only the essentials as inflation rises
Still, digital control capabilities are important to many consumers. Research from the PYMNTS’ 2022 Restaurant Friction Index, created in collaboration with Paytronix, which is based on an October survey of more than 2,100 American adults, found that four in 10 consumers said that ordering options and online payment would encourage them to buy from restaurants.
See more : Loyalty programs are the best way to get customers to spend more
On the call, Kempczinski also discussed the company’s loyalty strategy. He noted that the rewards program is a “frequency game” as opposed to a tool for acquiring new customers, noting that about eight in 10 U.S. consumers visit McDonald’s at least once a year, so there’s no not “a great scope opportunity”. Instead, the company intends to leverage its program to generate more value from existing customers.
“What we’ve seen with loyalty so far is that it’s proven to be an effective way for us to increase frequency among our users,” he said. “Our view is that we are still early game on this. … For us, the focus then is to continue to drive overall registration, but also to drive engagement.