McDonald’s included a pack of surprisingly bold McNuggets with its Investor Day in downtown Chicago earlier this week as the fast-food giant unveiled plans for meal delivery, app-based mobile ordering, curbside pickup and a “more modern, more exciting restaurant environment” as part of its new Experience of the Future restaurant concept that’s already delivering sales gains in markets outside of the United States.
Calling delivery “one of the most significant disruptions in the restaurant business today,” McDonald’s committed to technological upgrades, in-store changes and partnership with third-party delivery providers to expand its customer base and win back previously loyal customers who have migrated to other, presumably fresher brands in recent years.
Presented by President and CEO Steve Easterbrook, the new growth plan’s five pillars include enhanced digital capabilities and technology to elevate the customer experience, “redefining customer convenience” through delivery, accelerated deployment of its “Experience of the Future” restaurants in the U.S., new financial targets and a new three-year target for improving cash return to its shareholders.
All told, it’s a fairly dramatic shift from one of the largest and most visible global brands, and the largest franchisor with more than $82 billion in global sales according to the Franchise Times Top 200.
“To bring customers into the restaurants, McDonald’s must matter to people and be relevant in their daily lives,” the company said in a press release. “To do so, McDonald’s is accelerating digital capabilities and enhancing its use of technology in restaurants, in the drive-thru, and on the go.”
Explaining its strategy, the company portrayed the McDonald’s system as uniquely positioned to capitalize on current trends—delivery, technology, speed of service—which is a notably modern outlook that runs counter to much of the press the QSR giant has received in recent years.
Easterbrook said its multi-fronted approach will retain existing customers, lure back customers lost to QSR competitors, catch up with ever-increasing customer expectations, result in “meaningful improvements in quality, convenience and value” and, ultimately, bring back past customers and convert casual customers to committed McDonald’s enthusiasts.
“To deliver sustained growth, we have to attract more customers, more often,” Easterbrook said. “Our greatest opportunities reside at the very heart of our brand—our food, value and the customer experience.”
Through the use of computer kiosks, customers will be able to place orders in advance and skip the front counter, with food brought right to the table. Even more on-trend, app-enabled customers can personalize their orders and get curbside delivery, skipping the drive-thru line entirely. Mobile ordering and payment will launch in 20,000 McDonald’s locations, including the U.S., by the end of 2017.
In teeing up its plans for delivery, the company said nearly 75% of the population lives within three miles of a McDonald’s. It’s already one of the largest providers of delivered food in the world, with system-wide delivery sales of almost $1 billion in markets including China, South Korea and Singapore. Its delivery sales in China grew 30 percent in 2016.
“No other food company in the world has this reach and ability to be this convenient to so many customers through delivery,” the release read, adding that it is currently experimenting with different delivery models including third-party providers for ordering and fulfillment across the globe.
Seeking to offer a more convenient and enjoyable in-store visit, McDonald’s Experience of the Future restaurant concepts that are already in several international markets will expand to approximately 2,500 U.S. locations by the end of 2017.