McDonald’s outlined a long-term growth plan that will focus on convenience and technology in an attempt to win customers from competing quick-service restaurants.
Following the company’s investor day on March 1, McDonald’s announced it will launch mobile order and pay in 20,000 restaurants by the end of 2017, and that it will continue to accelerate its growth in delivery.
“As customers’ expectations increased, McDonald’s simply didn’t keep pace with them,” the company says in a statement. “Making meaningful improvements in quality, convenience, and value will win back some of McDonald’s best customers.”
The brand will also accelerate deployment of its “Experience of the Future” restaurant design in the U.S., which contains kiosk ordering and table service, increasing functionality with the mobile app, and a “more modern, more exciting restaurant environment.” Through the mobile order and pay feature, McDonald’s says its customers will also be able to skip the drive thru and choose curbside delivery. If customers choose the drive thru, they will read the already placed order code from the app and the order will be ready for pickup at the window.
McDonald’s plans to reimage around 650 restaurants in 2017 to the Experience of the Future model, and when combined with previously modernized restaurants, the U.S. will have around 2,500 locations. By the end of 2020, the company intends to have most of its U.S. free-standing restaurants updated to this design.
“To deliver sustained growth, we have to attract more customers, more often,” president and CEO Steve Easterbrook says in a statement. “Our greatest opportunities reside at the very heart of our brand—our food, value, and the customer experience.”
McDonald’s says it is “uniquely positioned to become the global leader in delivery.” In its top five markets, nearly 75 percent of the population lives within 3 miles of a location.
“Going digital is McDonald’s’ most recent push to lure customers back to its stores. Digital engagement is an increasingly important aspect of the modern foodservice experience and it enhances the level of convenience that consumers want and expect from a quick-service chain. Digital channels, whether through self-service kiosks, mobile ordering, or even delivery, help make the chain more accessible, and should be a positive driver of traffic,” says Stephen Dutton, consumer foodservice analyst for Euromonitor International.
Annual system-wide delivery sales are nearly $1 billion across areas including China, South Korea, and Singapore. Last year, McDonald’s China delivery business increased by 30 percent.
“Through enhanced technology to elevate and modernize the customer experience, a focus on the quality and value of our food and redefined convenience through delivery, we have a bold vision for the future and the urgency to act on it,” Easterbrook says. “We are moving with velocity to drive profitable growth and becoming an even better McDonald’s serving more customers delicious food each day around the world.”
By Alex Dixon