McMobile – Will McDonald’s Mobile Strategy Kill the Drive-thru?

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Having consulted with and written two books about Starbucks (The Starbucks Experience and Leading the Starbucks Way), I seldom compare Starbucks with McDonald’s. Typically, I see these two iconic brands in two very different categories. From my vantage point, McDonald’s is an excellent example of a service brand which focuses on price, speed of delivery, and turnkey consistency. McDonald’s has innovated automated service efficiencies and revolutionized drive-thru purchasing. Starbucks, on the other hand, is an experience brand that drives emotionally engaging experiences on top of a foundation of operational excellence. Starbucks has also embraced digital technology swiftly and leveraged mobile technology successfully.

Things are changing however at McDonald’s and those changes will be interesting to watch. At a recent investors meeting, McDonald’s announced that it will be launching mobile order and mobile pay in the fourth quarter of 2017 in every one of its 14,000 restaurants in the USA.

According to Business Insider, “If customers choose curbside pickup, they can skip the drive-thru line and a McDonald’s employee will bring their food to their car. This represents a massive shift for McDonald’s. More than 70% of the fast-food chain’s orders come through the drive-thru.”

As a loyal Starbucks customer, I’ve almost forgotten what it is like to enter a drive thru. I have fully converted to mobile pay. What could be easier than clicking my app, submitting my drink order and timing my arrival so I can walk into Starbucks, have the baristas greet me by name, and whisk out without waiting to pay? The answer – doing all of that without having to leave my car!

While I personally won’t forsake my Starbucks ritual for McDonalds’ curbside delivery, I have to concede the prospect of having my breakfast provided to me as I pull up to a restaurant does sound appealing.

Invariably, McDonald’s has been test marketing the mobile order/mobile pay/curbside pick-up service offering but I suspect execution across the enterprise will be a challenging roll-out. Starbucks has refined its mobile order strategy and still has run into recent hurdles based on the impact mobile ordering has had on the perception of people who wait in line while others like me saunter in and grab our pre-ordered items. (Please see my blog title Are You Up for the Human/Tech Challenge?) for more information on the financial impact of this clash of service delivery methods and efforts to address it at Starbucks).

Increasingly brands are trying to find ways to mobilize their offerings without compromising the experience for customers who are not yet engaging in purchases digitally. McDonald’s will now need to deliver food in a fast, accurate, and economical manner across counter service, drive-thru, and curbside pick-up. All of this adds complexity and stretches resources to deliver the same quality of experience in every way in which they serve their customers.

So will you be mobile ordering and paying for your McDonald’s meal via an app? Will you do that and head to the curbside pick-up area? Or, are you old school and look forward to pulling up in the drive-thru to order at the menu board and pay at the first window, while picking up at the second?

More importantly, how are you accommodating mobile ordering/mobile pay and expedited delivery in your business? If you are expanding your service delivery aided by technology, how do you maintain a quality experience across your more traditional ordering/payment/delivery platforms?

4 COMMENTS

  1. Hi Joe: McDonalds and Starbucks should be compared, as they are direct competitors, and the competition is intensifying (see McDonald’s is Competing Directly with Starbucks Motley Fool 10/5/16 https://www.fool.com/investing/2016/10/05/mcdonalds-is-competing-directly-with-starbucks.aspx) and McDonald’s Wants to Be the New Starbucks, Fortune, 12/5/16 http://fortune.com/2016/12/05/mcdonalds-coffee-starbucks-dunkin-donuts/.

    I am certain senior executives at Starbucks are watching developments at McDonald’s closely. McDonald’s faces difficult strategic challenges right now, but they have many overlapping capabilities with Starbucks, and a powerful advantage in their distribution and supply chain operation. It will be interesting to see whether their new initiative will dent Starbucks’ revenue.

  2. Andrew Rudin, let’s agree they compete in the quick service restaurant sector (QSR). I will always see Starbucks as a “value add” player instrumental in paving the way in the experience economy. Similarly, I will see McDonalds as a “price” player from a generation where service efficiencies won the day.

  3. I think McDonald’s would be wise to follow the lead of Domino’s. The odds of McDonald’s becoming an experiential brand like Starbucks are slim and none. And slim just left town.

    Domino’s worked on convenience with a new app and mobile ordering. They also improved their products. McDonald’s could certainly do the same, while remaining a “price” player, as Joseph put it.

    What more worrisome to me is Starbucks trying to be like McDonald’s. Yes, people like mobile ordering and easy of pickup, but that doesn’t make it a good strategy for a brand built (and priced) on the in-store experience.

  4. Bob Thompson, I complete agree with the genius of Domino’s approach. They are constantly reinventing themselves not only on the product or brand perception fronts but also on ease and speed of delivery frontiers.

    I suspect part of the allure of mobile ordering is not only for speed in the customer experience but for the brands ability to drive more volume through their stores. I think you are correct that emotional engagement can be watered down in a walk-in/walk-out model!

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