Will table service be a difference-maker for McDonald’s?
McDonald’s last week announced plans to roll out table service to all of its 14,000 U.S. restaurants.
After customers place their orders at a touch-screen kiosk and pick up a digital location device, orders will be delivered to their tables. Orders can still be made from the counter or picked up at the counter after using the kiosk.
McDonald’s has faced weak traffic for several years amid the popularity of fast-casual restaurants such as Panera Bread and Chipotle. With 60 to 70 percent of sales coming from its drive-through lanes, the move aims to improve the in-restaurant experience.
One challenge table service addresses is slower food delivery to customers caused by having more items on the menu. The wait time is expected to feel shorter while sitting at a table than standing by the counter.
The self-serve stations make it easier to customize an order. McDonald’s has also found customers tend to order more food when they don’t feel pressured to order at the counter. Interactions with employees are also expected to increase.
“Typically, the majority of our crew is behind the counter, and that counter literally has been a barrier between our crew and the customer,” Steve Easterbrook, McDonald’s CEO, said at a media event last Thursday at a renovated store in New York’s Tribeca neighborhood.
Test runs at more than 500 restaurants in Southern California, New York and Florida delivered an increase in traffic, a mid-single-digit percentage gain in sales, a lift in the average check by $1 and higher customer satisfaction scores. McD’s will launch kiosks and table service in Boston, Chicago, Seattle, San Francisco and Washington, D.C. in 2017 and the service will eventually roll out nationwide.
The service has been particularly popular with groups and families, although McDonald’s expects all customers will use the screens as they become common.
Adding an extra table delivery element might frustrate efforts to keep stores clean. Core fast-food customers may also feel alienated, although McDonald’s officials seemed to recognize this risk. Said Mr. Easterbrook at the press event, “This is not being a different McDonald’s, but a better McDonald’s.”
- McDonald’s Introduces Screen Ordering and Table Service – The New York Times (tiered sub.)
- McDonald’s Table Service: Fast Food Redefined – The Wall Street Journal (sub. required)
- The ‘McDonald’s of the Future’ leans fast-casual – RetailWire
- Why Eating at McDonald’s Is about to Undergo A Massive Makeover – Fortune
DISCUSSION QUESTIONS: Will touchscreen ordering and table service improve the McDonald’s experience? What do you see as the pros and cons of such a move?
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20 Comments on "Will table service be a difference-maker for McDonald’s?"
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Managing Partner, Advanced Simulations
At least they did their research. If it raises revenue and is profitable, why not? Will it improve the experience? Come on, it’s McDonald’s — for better or worse.
Principal, Frank Riso Associates, LLC
First it was the banks and their ATMs, then the airlines with check-in kiosks and now its the quick service restaurants. It had to happen sooner or later, and what better place than McDonald’s? I think it will work as they replace their cashiers with table service people and improve overall customer satisfaction. Quick-serve pricing is not all that cheap anymore so adding table delivery is a good thing. But there are some questions. What does one tip or not tip the wait staff at a McDonald’s? Will customers go up and get one another free drink or not? While there are these pros and cons, I do think it will work and I look forward to it. Change is always difficult at first but good in the end.
Principal, Retailing In Focus LLC
One word: Culver’s. The Wisconsin-based chain (which has now spread to several regions of the country) has always made table service part of its business model, without a significant price difference vs. McDonald’s. You order at the counter, find a table, grab your soda and wait (maybe five minutes) for a friendly associate to bring your hot, good-tasting food to your table.
The key here is “hot” and “good-tasting.” Yes, I think the combination of kiosks (for efficient ordering) and table service can be a win for McDonald’s but they also need to improve the drive-thru experience. (Touch screens and mobile payments, anyone? Culver’s could use some work here, too.) But it’s all about the food quality.
There is a world of difference between the quality of employees at Culver’s and McDonald’s. Employees at Culver’s are not a barrier but more like ambassadors. Quality is also and issue. You will not see a dollar menu at Culver’s.
Principal, Retailing In Focus LLC
We both live in “Culver’s Country,” which other readers may be able to tell. David is right that Culver’s service culture grew organically, and it would be tough to impose this on an existing (and vast) organization like McDonald’s.
We agree absolutely that it’s all about whether McDonald’s can elevate the quality (not speed or value) of its offerings.
Owner, Tony O's Supermarket and Catering
For me (and others who like high-quality casual fast food), no it won’t get me in the door. The quality of their food is simply not very good and having someone bring it to me doesn’t impress me at all. I think for the regulars that go often it is a nice novelty and the stats above may prove me wrong, but we will see how this turns out.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
McDonald’s is borrowing a page from the fast-casual segment which has enjoyed continued growth in recent years. In addition, the touch screen ordering may be the biggest advantage in this project, since it leaves the customer in control of the pace and timing of the order. Also, it removes the need to tell the McDonald’s crew what you want only to have them touch the screen to enter the same. This approach is simply giving customers more options which may encourage new users.
Co-founder, RSR Research
I’m having a hard time figuring out what McDonald’s stands for these days. Fast food and orange decor says “in and out,” Free Wi-Fi and table service says “stay a while.”
I don’t quite understand how this raises profits in their existing model. It’s confusing. I’m not a patron and I can’t imagine table service would make me one … but who are they trying to steal business from? I’m honestly at a loss.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Touch ordering and table service is nice, but ordering and having food delivered that is below par doesn’t help any experience.
Board Advisor, Light Line Delivery
Last year, I actually experienced McDonald’s table service and touch screen ordering near their headquarters in Illinois. Note that on the touch screen you could also build a personalized burger. I thought the experience was great as compared to the typical counter top order. Once you complete your order at the touchscreen you grab a RFID puck and can sit anywhere. The RFID puck is used to locate you for order delivery, which was fast. Behind the counter, the staff has a display that shows order details and customer location. Lastly, they delivered the order in a metal basket, which was a nice touch. The experience was newsworthy — people we definitely talk it up to others. Also, it increases staff productivity as McDonald’s will be able to increase order throughput with the same, or fewer, labor hours. This last point may be the rub, ultimately this may reduce the number of entry-level workers McDonald’s requires.
President, Global Collaborations, Inc.
The dine-in service option changes the brand connection. Instead of fast service in a clean restaurant, McDonald’s is slowing the service experience with many more items on the menu and with customers having to wait for the order. Providing tables and delivery to table service makes the wait more pleasant but does not hide a longer wait. However, with the greater number of choices and longer wait, having tables helps. Will the tables and nicer ambiance encourage people to stay longer? If people stay longer is there a problem with turnover or no free tables at busy times? Hopefully, the tests have worked through these issues.
In any event we are witnessing the re-invention of McDonald’s and we will see if this makes them more competitive and profitable or an also-ran.
President, b2b Solutions, LLC
This may not help McDonald’s compete against fast casual and the better burger chains but it will be a point of differentiation against chains such as Wendy’s and Burger King. The process will allow customers to order at their own pace without the pressure of the line behind them. Getting their drinks will help shorten the perceived wait time. The ability to begin social interaction while waiting for the service will also be a plus.
I admit I was surprised by the traffic and sales numbers mentioned given the majority of their sales are through the drive-thrus. I am assuming that was for all transactions and not just for those from customers who actually entered the restaurant.
Founder, CEO, Black Monk Consulting
Will it improve the experience? Maybe, maybe not. Does that have anything to do with McDonald’s real problem? I don’t think so. The issues for McDonald’s are, and always have been, taste and nutrition. If the food doesn’t taste as good as similarly-priced options, they’ll continue to see sales erode. I guess improved service will make some people feel better about eating at McDonald’s, but they are adding added labor and technology costs. Not sure if the math works on this one.
Principal, Your Retail Authority, LLC
McDonald’s is already pretty much self-serve other than placing the order, so this seems to be the logical next step. The question I would ask is, will the kiosks be at the table? If we have to stand in line to access a kiosk, the consumer hasn’t gained much other than full control over the order. There will still be others breathing down our necks waiting for the next kiosk.
On the other hand, bringing the food out to the table is a nice touch and does make for more personalized service.
For my 2 cents.
Independent Board Member, Investor and Startup Advisor
Though interest will start out as customer interest born from novelty, touch screen ordering and table service will bring in more eat-in patrons at McDonald’s with added control and customization options.
As long as store personnel can execute well across multiple ordering/delivery options and food quality meets expectations, then the dining experience will get a boost. McDonald’s should be ready for patrons “crossing” ordering and delivery options.
The keys to success are not only having a friction-less and pleasant UI, but having the trained personnel to handle the unexpected.
Senior Retail Writer
The real question is, if McDonald’s does 70 percent of their business in the drive-thru, why don’t they test drive-thru-only locations? It would cut down on a lot of operational costs and could help streamline service.
Most people go to McDonald’s because it’s fast, convenient and requires minimal human interaction. Touch screen ordering will definitely help customers feel more comfortable. However I’m not sure about the table-side service. I can see people going inside to use the touch screen to enter a highly-customized order that would be hard to do in the drive-thru, then taking their order to go anyway.
Founder, Branded Ground
I appreciated reading Shawn’s overview of how the experience works, as it’s difficult to weigh in on something that one has never experienced. It sounds like it is enhancing it in many areas and doing what my firm really believes in, which is innovating in ways that are highly unique to the brand. I am also not a fan of their food due to nutritional concerns, but I give them a high five for at least getting out there and trying! It would also seem logical that the next step is an app that lets one order from their personal device. I would also hope that they use this new platform to open up visibility to the product’s origins and nutrition — hopefully with better stories to share on that end as well!
Strategy Architect – Digital Place-based Media
Table delivery sure beats waiting around a pick up counter for your number to come up. Now if the interface on those self-order kiosks and an interface to mobile ordering could be added to the process….
CFO, Weisner Steel
Short answer: no.
Longer answer(s): This really isn’t table “service,” it’s table delivery; a distinction which might be dismissed as a semantic quibble, but for the fact that it points out that the McDonald’s “experience” really isn’t changing. So whatever problems that exist, either at the chain level (people not liking the food, limited menus) or the specific restaurant level (dirtiness, riff-raffy clientele) will remain. How people will pay, presumably a concern in a cash heavy operation like McD’s, doesn’t seem to be discussed.
CEO, The Customer Service Rainmaker, Rainmaker Solutions
My first thought when reading this was “C’mon man, this is McDonald’s we are talking about.” But reading the research they say they did, it begins to make sense.
Still we have a few considerations to keep in mind. Foremost is the training the staff gets appears to be weak. That needs an upgrade. If the food delivery is made by the counter staff, I can not see it being an improvement. You still need to get your drinks, condiments and utensils.
I have seen this work when checking out and paying the bill. I am looking forward to seeing this work at a QSR. It could be interesting.