McDonald’s is getting ready to “flip the marketing switch” on digital services such as mobile ordering and delivery as it looks to drive up usage and ensure the features become a meaningful part of its business.
Speaking on an analyst call this afternoon (24 October) following its third quarter results, McDonald’s US VP Chris Kempczinski explained: “We are still in the early innings of digital but we’re seeing a really nice start to it.
“We are seeing strong offer momentum… and as we’re rolling out mobile order and pay, the power is going to then bring together the offer with the ability to do mobile order and pay. Right now we’re really focused on getting the operations right. What happens in 2018, when we flip the marketing switch on it and start to drive really much more increased usage? We want to make sure that we’re ready when we do flip on the marketing switch that we’re ready to handle the business with it.”
McDonald’s says 30 million people have downloaded its mobile app, with nine million monthly active users. And mobile order and pay will be in 20,000 restaurants by the end of the year, and all its restaurants in the US. On delivery, McDonald’s is currently offering the service in 5,000 – or 20% – of its restaurants across 20 countries with plans for that to hit 10,000 by the end of the year.
CEO Steve Easterbrook, speaking on the same call, described delivery as a “powerful accelerator for the business” and said he has been “encouraged” by the early success with its global partner, UberEATS. McDonald’s needs more than half the business it gets through delivery to be incremental and says it is “well up on that scale” with delivery a “meaningful contributor” in restaurants where it is offered.
Both services are also offering McDonald’s a wealth of customer data. For example, it now has data on repeat visitors, how much they spend and the most popular times of the day.
“More than 60% of our business comes in the evening and overnight, reinforcing the fact this is an incremental revenue stream we were not previously tapping into. We’re also getting very strong repeat business from those that use it as well, which again further encourages us,” explains Easterbrook.
“The markets that have been able to more effectively promote and raise the customer awareness are getting higher take-up per day… One of the things we are focusing on internally is what is there that we can do to get the awareness of the fact that we’re offering delivery higher up in consumers’ minds.”