McDonald’s reveals Next Gen to-go model

mcdonalds

McDonald’s is adding curbside delivery and altering how customers place drive-thru orders as part of a revised long-term strategy revealed today to investors.

The plan also included a pledge to make McDonald’s “the global leader” in delivery through arrangements with third-party services, and accelerating the conversion of restaurants to a new high-tech, kiosk-studded format, with a goal of completion within the U.S. by 2020. 

The program’s end goal is increasing customer counts, according to executives. They set three pillars to the approach: hold onto current patrons; win back consumers who defected to other restaurant brands during McDonald’s recent struggles; and boost the frequency of what they called casual customers.

Technology will be key to the effort, not only as a way of speeding service but also providing more leeway for customization, indicated CEO Steve Easterbrook.

To-go customers who want to personalize their orders will be able to spec a complex order via a smartphone and then pull into an area in the parking lot where the food will be brought to them.

If patrons prefer to use the drive-thru, they can still input the personalized order via their phones and provide a code to the employee at the other end of the drive-up microphone. In that setup, the order can be highly customized without the need for the customer to painstakingly place the order, have it checked by the kitchen staffer, and then executed.

Digital technology will also converge for customers at in-store kiosks, which McDonald’s is already installing in selected stores. Recognition technology will enable the kiosk to “read” a signal from regular customers’ phones, suggest patrons’ favorite orders, and default to the guests’ usual method of payment.

The kiosks are an underpinning of what McDonald’s is calling the Experience of the Future, a new way of using the Golden Arches. McDonald’s has revealed that stores given an Experience of the Future facelift tend to see a sales increase in the mid-single digits.

Executives said the significant capital expenditure of updating all restaurants will come from the proceeds of selling company stores to franchisees. The agenda calls for refranchising 4,000 restaurants by 2018.

Under the new accelerated renovation scheduled, McDonald’s said it would give 650 stores the Experience of the Future facelift this year, for a year-end tally of 2,500 updated branches.

The pledge to become the leader in delivery came a day after Domino's Pizza, a pioneer and still a leader in that form of service, posted domestic same-store sales gains of 12.2% for the fourth quarter of 2016. McDonald’s U.S. comps for the same period were 1.3%. 

Technology has also figured prominently in Domino's strategy for growing off-premise sales.

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