6 things we learned about McDonald’s future from SXSW

As the sole restaurant sponsor at South by Southwest, the huge technology and entertainment conference underway right now in Austin, Texas, McDonald’s had an opportunity to showcase the digital strategy that figures into its efforts to make the brand more relevant to today’s consumers.

More than 20 attendees of the event listed McDonald’s as their affiliation—including CEO Steve Easterbrook, who partied with employees and climbed aboard the McDonald’s food truck at the brand’s VIP kickoff party. Many more from its U.S. and global digital teams, including Chief Digital Officer Atif Rafiq, participated as speakers on panels and facilitators of daily fireside chats in the McDonald’s Lounge inside the Austin Convention Center.

These are some of the gems the company dropped about its plans for customer engagement and interaction now and in the future.

Discussing how the brand can deliver on consumers’ desire for on-demand convenience, Rafiq outlined a world where the transaction begins at the point of impulse—that moment when the customer thinks, “I’m hungry and I want McDonald’s.”

“That’s super powerful. I think there’s a lot that can happen there,” he told the audience.

“You know location, you know what the person wants and you know what’s going on in the kitchen at McDonald’s. If you take all of that information [together], the customer doesn’t have to think,” he said. “You can actually find the perfect moment to begin making that food, to optimize between speed and the quality of the food. That’s actually on-demand.”

He admits no one has solved for that yet, adding, “It probably involves a lot of algorithms.”

On a panel discussing the future of payment, McDonald’s U.S. VP of Digital Julia Vander Ploeg shared that the burger chain is testing Google Hands Free—a new payment app the tech company introduced in early March.

PC World explained it this way: “Google’s new payment app lets you buy stuff with your face.” More descriptively, it allows customers to walk into a store and make a purchase without taking the smartphone or wallet out of their pocket. The customer tells the cashier they want to pay using the app; the cashier asks for and enters the customer’s initials and then matches them up to a picture that pops up in the POS. Once recognized, the cashier accepts the transaction. (Google is also testing visual recognition using in-store cameras to automatically confirm a customers’ identity.)

Currently only select McDonald’s and Papa John’s (and some local businesses) in California’s South Bay Area are participating in the pilot test of Google Hands Free. According to Vander Ploeg, the test began in three McDonald’s stores and now is in test at a dozen. Plans are to roll out Google Hands Free in up to 50 McDonald’s units in the next month.

As a service to attendees—and a preview of technology it’s experimenting with—McDonald’s outfitted its Lounge at SXSW with wireless charging stations. “That’s going to be important in a business like ours,” explained Vander Ploeg. “If you go all the way through the customer experience, having the power to do these things [such as payment] is part of what’s going to make it work.”

The company sees on-table charging pads like these as a potential differentiator. “Imagine somebody’s getting off the highway, wants to have lunch and needs to [charge] their phone. Those conveniences can make a difference,” Vander Ploeg said.

Starbucks is also providing high-speed, free phone charging.

“Personalization per se, in my opinion, is not a benefit at all,” said Silvia Lagnado, McDonald’s global chief marketing officer, during a fireside chat on the topic. Instead, the evidence shows that, for McDonald’s, personalization increases the perception of freshness and quality. “Because you’ve decided what you wanted and a few minutes later you got it, and by definition it’s prepared fresh, specially for you.”

She added, “For us, in addition to being [about] fun and individuality and all of those really important emotional benefits, there is a very strong consumer benefit [to personalization] around quality.”

It doesn’t hurt that customers who engage with the new McDonald's self-ordering kiosks spend more. While it’s not twice as much, Lagnado said, “it’s definitely more.” The verdict still is out on whether that’s because they were going to spend more anyway or they just got carried away with the choices at the kiosk. “It’s probably a little bit of both,” she said.

VR is a big topic at this year’s SXSW, and McDonald’s is trying to make itself part of the discussion. At the McDonald’s Loft, the brand’s temporary home in Austin during SXSW, it’s offering visitors a virtual reality experience. Participants who don special goggles are transported to an animated world inside a Happy Meal box where they can use controllers to paint the walls of the box with neon colors, as virtual butterflies flit around and jolly music plays through headphones. The experience is just for fun, but members of the McDonald’s team in attendance speculated to us about applications that could range from using VR to introduce future restaurant prototypes to a future iteration of the McDonald’s PlayPlace.

It isn’t the brand’s first go-round with VR. Earlier this month in Sweden, it began doling out Happy Meal boxes that can be folded to form “Happy Goggles,” or virtual reality headsets.

“Digital is about convenience, but it’s also very much about fun,” said Vander Ploeg on a panel, pointing out that research shows people’s perceptions are linked to their experiences from their childhood.

Asked by an audience member about McDonald’s position and plans for adopting bitcoin, Vander Ploeg simply replied, “We’re keeping track of all the trends.” (Translation: No comment.)