Will ‘doubling down’ on tech help McD’s disrupt the fast food business?
McDonald’s model for serving cheap burgers fast disrupted the food industry in the chain’s early days. Now, the fast food giant is looking to again stir up the market, except this time it plans to use technology to help achieve its goals.
Steve Easterbrook, CEO of McDonald’s, appeared on CNBC’s “Squawk On The Street” show yesterday and said the chain is “doubling down” on technology, such as kiosks in stores to accept customer orders as well as offering online ordering for pickup or delivery.
Last year, McDonald’s announced plans to add touchscreen kiosks and roll out table service to all 14,000 of its restaurants in the U.S.
Mr. Easterbrook also touted the success of the chain’s home delivery tests using Uber Eats. Knowledge gained from a 20-location test in Miami that was then expanded to 200 restaurants has proven invaluable as McDonald’s deploys the program on a much wider scale, he said. He cited accessibility as a benefit, with 75 percent of the U.S. population being within three miles of a McDonald’s.
While in the “early, early days,” according to Mr. Easterbrook, McDonald’s is using digital technology to help move beyond its restaurants in its efforts to be “customer obsessed.” He pointed to mobile order and pay technology and adding a loyalty program to its app as ways the chain is looking “to make their experience with McDonald’s friendlier, more convenient or more fun.” The chain is looking to use digital interactions with customers to gain more insights and improve performance.
Ultimately, he told CNBC, McDonald’s understands that the fast food industry will be “disrupted by technology.” The choice, as he sees it, is to either make use of technology to become “the disrupter” or not pursue its use and become “the disrupted.”
McDonald’s reported that its second quarter comparable sales increased 3.9 percent in the U.S. while operating income improved five percent.
- McDonald’s Reports Second Quarter 2017 Results – McDonald’s Corporation
- Steve Easterbrook Interview – Squawk On The Street/CNBC
- McDonald’s CEO: ‘You have a choice to either be the disrupter or the disrupted’ – CNBC
- Will table service be a difference-maker for McDonald’s? – RetailWire
DISCUSSION QUESTIONS: Will McDonald’s investments in technology help it disrupt the fast food industry? Which of the chain’s tech investments are most likely to pay dividends for the chain?