2014 and 2015 were rocky years for McDonalds; sales plummeted. Revenue fell by 2.2% and net income was down 15%, and the fast food giant was losing its grip on an industry it has long dominated. Ushering in a new CEO, Steve Easterbrook, McDonalds sought to both refresh its brand and revamp its stores and offerings to compete with the growing popularity of fast-casual restaurants.
How popular? It’s estimated that the fast-casual restaurant category has grown more than 500 percent in sales since 1999 and now it represents 10 percent of the total U.S. fast-food market. In the wake of the growing popularity of fast-casual restaurants and shifting consumer trends, Easterbrook identified digital technology as the linchpin for turning around the company.
A New Plan
In 2016, McDonalds announced that it planned to roll out self-service kiosks to all 14,000 US locations. McDonalds CEO noted that the move towards digitizing the order process signals a “commitment to putting customers at the heart of everything we do.” With the increase of fast-casual establishments, popularity propelled by their commitment to healthier foods, convenient ordering, and faster wait times than casual restaurants, fast-food establishments are threatened.
McDonalds called for help from those that know them best, their customers. McDonalds CEO stated, “for the best part of our 60 years we’ve asked customers to fit around our business model.” Now the company is adapting its “business to fit around customers" by empowering their customers with choice. This transition to kiosks has changed how a McDonalds customer sees themself, one with greater control and autonomy, by deciding what they order, how they pay, and how they’re served.
In addition to improved customer experience, McDonalds is looking to drive traffic and revenue with revamped technology. In response to the implementation of kiosks and mobile ordering, Andrew Charles from Cowen, where the firm raised its rating on McDonald's to outperform from market perform and price target for the shares to $180 from $142. The firm explicitly cited that the “in-store technological overhaul” is the key reason for their positive analysis.
People are more willing and capable of interacting with self-service kiosks than ever before. With a feature-rich Self-Service Kiosk, you can introduce a new stream of revenue and integrate your CRM and loyalty programs seamlessly into your kiosk. Customers can earn rewards, quickly view their order history, and easily reorder their favorites.
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