McDonald’s, the Chicago-based quick-service restaurant (QSR) giant with more than 40,000 locations in over 100 countries, is leveraging its digital platforms to transform the way its restaurants are run.
On a earnings call with analysts Thursday (April 28), McDonald’s President and CEO Chris Kempczinski shared his view that digital ordering is reshaping the restaurant industry, offering capabilities that begin with customer engagement and ultimately lead to major operational changes.
“Digital changes everything,” he said. “So today, [with] 90% of the customers coming into my restaurant, I don’t know who they are. I don’t know their prior purchase. I don’t know what their buying pattern is… As I get better and better visibility into that customer, I can actually track and identify their preferences over time.”
He added that this allows the restaurant to serve that customer more quickly and to simplify the displays they see both on their own devices, through the brand’s app, and on restaurant menu boards. Additionally, the company can tailor deals and offers to that customer’s taste, offering a “much more bespoke” experience.
Looking ahead 10 years, Kempczinski predicted that, with these information-gathering capabilities, data on consumers’ purchasing behaviors will transform back- and front-of-house operations.
“You can get it integrated into restaurant operations, and it gives you opportunity to do automation,” he said. “It gives you speed-of-service opportunities, positioning. That has labor benefits. So, it can change just the entire unit economic profile for the better of what a restaurant looks like.”
In recent months, PYMNTS research found restaurant ordering has been on the decline. PYMNTS’ April study, “ConnectedEconomy™ Monthly Report: 3 Ways Consumers Are Dealing With Inflation,” which drew from a March survey of more than 2,800 U.S. adults, found that 45.8% of consumers had ordered from restaurants online in the previous month, down from 46.7% in February and down from 49.4% in January.
Read more: 6 in 10 Consumers Buying Only the Essentials as Inflation Rises
Still, digital ordering capabilities are important to many consumers. Research from PYMNTS’ 2022 Restaurant Friction Index, created in collaboration with Paytronix, which drew from an October survey of more than 2,100 U.S. adults, found that four in 10 consumers said online ordering and payment options would encourage them to purchase from restaurants.
See more: Loyalty Programs Best Way to Get Diners to Spend More
On the call, Kempczinski also discussed the company’s loyalty strategy. He noted that the rewards program is a “frequency play” as opposed to a tool to acquire new customers, noting that about eight in 10 U.S. consumers visit McDonald’s at least once a year, so there is not “a big reach opportunity.” Instead, the company intends to leverage its program to drive more value from existing customers.
“What we’ve seen with loyalty so far is it has proven to be an effective way for us to drive frequency among our users,” he said. “Our view is, we’re still early innings on this. … For us the focus then is continuing to drive overall enrollment but also to be driving engagement.”
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