In any quick service restaurant business four key metrics will influence the bottom line performance of that business. The average order value placed by customers, how long customers wait for their meal, how accurately each meal is delivered and what the staff costs are.
Market leaders lead and once again in quick service restaurants McDonalds show the way. In the US in 2016 McDonalds created their Experience of the Future strategy, where many different technologies are being tried and tested. The results are then rolled out where they have seen results that increase customer satisfaction and the bottom line.
By mid-2017 Wall Street analysts were celebrating an all time high in McDonalds stock up 26% YTD, but many other restaurant chains at the same time across the US were seeing a very different picture.
So, what had McDonalds been doing that enabled the brand to buck the market and increase bottom line performance while many others experienced the reverse.
Their Experience of the Future strategy looked at how their customers behave and the key experience factors that influence satisfaction in the McDonalds brand promise.
Technology is in the hands, literally, of almost every quick service restaurant customer, a mobile phone. So, aligning the McDonalds brand promise to that device and bringing in other convenience technologies was deployed.
The effectiveness of this strategy has been analysed by many, including Cowen’s Andrew Charles, and when measured it shows what technologies have had most impact in four key areas.
- Average order value
- Lower waiting time
- Increased order accuracy
- Lower staff costs
To quote Andrew Charles precisely… “MCD is cultivating a digital platform through mobile ordering and Experience of the Future (EOTF), an in-store technological overhaul most conspicuous through kiosk ordering and table delivery. Our analysis suggests efforts should bear fruit in 2018 with a combined 130 bps contribution to U.S. comps. We believe mobile ordering better supplements the drive-thru business where 70%+ of U.S. sales are transacted. In our view, MCD’s differentiation lies in the operational enhancements of mobile ordering that includes curbside pick-up of orders in order to not disrupt the drive-thru.”
Put simply, McDonalds are making life easier for customers through providing technologies they use in ever increasing frequency.
As most of us will have seen already these technologies, most notably self-service or self-ordering kiosks, are now in many McDonalds restaurants in the UK. The trials have been done and the increased revenues and bottom line results tested, they work.
Technology has undoubtedly changed how every consumer engages with every restaurant proposition. Technology will continue to lead that change and market leading restaurants will lead in the adoption of technology.
Learning from market leaders like McDonalds and others is far less risky and far less expensive than leading a market through trailing and testing. Analysis of technology strategies and roll outs and the effects seen can be bought relatively inexpensively through analysts like Cowen and others.
So, the H&C News team will continue to research and report on trends like these that hopefully help our readers gain insights to an ever faster changing hospitality and catering industry.