Wednesday, March 30, 2016

Faster Fast Food

McDonald’s new app has just launched online ordering in test markets and is looking to launch a customer loyalty program early next year. McDonald’s aims to create faster and more accurate service with their new ordering system. With the loyalty program McDonald’s aims to collect more data on customers in order to personalize their experience
With online ordering through the app McDonald’s believes it will get rid of the risk of people who get impatient with long lines and leave. Forbes predicts that there will be a 10% spending increase in sales due to this new app feature. With the upcoming loyalty program McDonald’s aims to create a more one on one interaction with customers. They will be able to collect data on behavior and preferences that they cannot collect in stores. They will see spending habits, frequency of visits, and more. The company hopes to also collect more customer feedback through the new app. McDonald’s plans to use push notifications to lure in customers who haven’t been to the restaurant lately to promote more business. Starbucks and Dunkin Donuts already have successful loyalty programs that have drastically increased sales and McDonald’s, although late to jump on the bandwagon, hopes to do the same. Currently, the app has 10 million downloads since late last year and they predict a very high increase after both new features are launched. One successful part of the app that is already featured is the ability to play McDonald’s monopoly instead of having to use their website. McDonald’s monopoly is their most popular sweepstakes game. It offers more convenience which is the main target for all features of the app. 

Forbes failed to mention in the articles exactly how the McDonald’s loyalty program and online ordering will work. What perks will one earn and how long will it take or how much money do you need to spend in order to get loyalty rewards? If a customer orders online to avoid lines will there be a separate line for pick up? Do customers pick what time they want to pick up? Can customers pick up the food in the drive-thru or go in the store? If they use drive-thru won’t they just have to wait in line with all the other cars anyway? With the food being made so fast currently, how will the online order food stay fresh? With Starbucks being a more expensive drink company, it lures in more need for rewards. Will customers feel the need to have a loyalty program with such a cheap food option like McDonalds? Do consumers feel the need to get a free $1 fry unlike a $5 latte. McDonald’s is expected to have a huge increase in stock prices due to the new app whether or not it will have forecasted problems. 


http://www.forbes.com/sites/greatspeculations/2016/03/30/now-testing-mobile-ordering-on-the-mcdonalds-app/#549d973d2c17

13 comments:

  1. Tyler, I found your blog to be very interesting and I like the questions you asked towards the end of your blog as well. One thing I thought of when reading your blog was if a certain product is unavailable, will the app be able to notify the person using the app? Does the app show which products are currently unavailable so the customer knows not to order it? Overall, though, I think that this is an invention that could be useful and convenient.

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  2. I believe that this application and customer loyalty program is a great idea for McDonalds. I am actually surprised that they have not yet resorted to this strategy. So many businesses, restaurants, and retailers have these types of apps. It creates better and longer relationships with consumers, is a way to advertise new products, and, in the end, creates more revenue for the company. Not only will it provide these benefits, but it will give McDonalds additional data about their customers, their restaurant locations, and their customers buying habits. All of this data can be collected through the app and provide McDonalds with relevant information to increase business. It also will keep the business caught up with others using information technology and, therefore, allow them to be more successful in today's world.

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  3. I was very interested to read about McDonald's new online ordering systems and loyalty programs. Since I am a member of both Dunkin Donuts' loyalty program and Starbucks' loyalty program, I am particularly curious to see how McDonald's loyalty program works. Like Tyler, I have many questions pertaining to McDonald's loyalty programs. Like he said, I feel that people may not be as excited to use McDonalds programs because the food is already so cheap. Also, with Dunkin Donuts and Starbucks, you have to have a gift card to the store in order to use the loyalty program. If you pay with a credit card or cash, you do not get any rewards. I wonder if McDonald's will have the same system. I do not agree with this systems because many loyal customers do not receive gift cards regularly. I hope that McDonalds does not have this same requirement. As for the online ordering system, I do think it is a good idea, but in order for the system to take off, I think there must be some perks to it. The reason I think this is because chipotle already has an online ordering system. I am an avid customer of chipotle and I have never used the system. Chipotle takes even longer than McDonalds to get ready. However, I think many people are even too lazy to order off the application. Hopefully McDonalds will find a good way to market the system that will make people want to use it.

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  4. I believe that this new app will indeed increase sales for McDonalds. Long lines and waits are two negative factors that always discourage customers. Customers always get impatient and frustrated when they have to wait in long lines, especially when they’re hungry. Because this app will allow customers to order their food on the app, the customers know they will be able to walk in the door and their food will be ready for them. This will improve the efficiency of McDonalds which will improve customer satisfaction. Regularly, if a customer were to walk into the store and see a long line, they will most likely walk out and go to the near by Burger King or Wendy’s instead. But if a customer has used the app and has already placed their order, they will not be discouraged by the long line and will just walk to the front to get their food. I personally love apps like this because I hate waiting in line, and many other customers feel this way as well. This being said, customers will be more encouraged to make the effort to go out and get food since they know it will not be a long wait or a complicated process.

    In addition, I think the loyalty program will increase sales. By establishing a loyalty program where customers can earn points, get discounts, and receive awards, customers will be more likely to chose McDonalds over its competitors. Customers would much rather go to McDonalds instead of Burger King if by going to McDonalds they can receive points to get a free meal in the near future. In addition, if the loyalty program gives out discounts, the customer will be more likely to eat their, perhaps even purchase more than they usually would since they are saving money, and encourage their friends to come with them. This is beneficial for McDonalds because it will increase the loyalty and frequency of their customers.

    Overall, I think these two new features are going to be great for McDonalds. The app is going to increase efficiency and customer satisfaction, which will lead to an increase in loyalty. In addition, the customer loyalty programs will also lead to customers choosing McDonalds over its competitors and increase customer loyalty. By doing this, the sales will definitely improve. Because McDonalds is so similar to its competitors like Burger King and Wendy’s, it is crucial to have customer loyalty.

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  5. I definitely feel like McDonalds is making the right move although they're a bit late to the game. Many companies have created software exactly like this many years ago when mobile applications were starting to take off. Is it practical? I don't feel that its practical in the sense that McDonalds is already very fast. How much time would one be saving by using this app. I don't feel like it would be a lot of time unless they were placing a large group order. Most people order from they're cars which I feel is the reason for long lines. Ordering inside the restaurant is typically faster anyways. My question is would pickup be inside the restaurant or though a pickup window? I mean it just make much sense as "fast" if you had to get out of your car. I do feel that the reward system is very good because it encourages people to return for more food. Restaurants like Chipotle are still unable to deliver this system for some reason or by choice. I would love to try this product out but I don't really eat McDonalds so I don't think the reward program would be beneficial.

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  6. Tyler, very interesting blog. I agree with your notion that the launching of this new app will defiantly have a positive impact on the bottom line for McDonalds. I think another thing that this article, and all other articles about the movement within food service industry to non human service is the impact it will have on the economy. The more jobs these types of apps or devises take up, the less the demand for low skill jobs in the food service industry. The development of these apps will also lead to a higher demand for high skill jobs, to help implement them and run them. As the demand for low skill jobs falls, and the demand for high skill jobs rises, the inequality gap in the United States will continue to grow. So while there is no doubt this application will allow McDonalds to run more efficiently to please its customers, It will not necessarily be beneficial to the United States economy or the people who contribute to it.

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  7. I think that the new app will certainly increase McDonald's sales, as many experts are predicting. However, I believe some problems could arise, which were not discusses. While the app may indeed help to eliminate the number of people who leave due to long lines, this problem may be replaced by people who show up very late to receive their order, or decide not to come and pick up their food after placing an order. This could lead to a great deal of confusion for McDonald's employees, and is certainly a problem that should be considered. Furthermore, due to the nature of McDonald's prices, which are significantly cheaper than most of its competitors, they will likely have to give out rewards at a much higher rate than their competitors in order to keep customers feeling like they are truly being rewarded. The app may have to offer a free sundae or small fries after every one or two orders in order to keep their reward values comparable with other brand's loyalty rewards. Despite these problems to consider, though, the app is a wonderful idea and will most certainly benefit McDonald's greatly, and will most likely draw in a higher number of customers.

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  8. I think that the new app will certainly increase McDonald's sales, as many experts are predicting. However, I believe some problems could arise, which were not discusses. While the app may indeed help to eliminate the number of people who leave due to long lines, this problem may be replaced by people who show up very late to receive their order, or decide not to come and pick up their food after placing an order. This could lead to a great deal of confusion for McDonald's employees, and is certainly a problem that should be considered. Furthermore, due to the nature of McDonald's prices, which are significantly cheaper than most of its competitors, they will likely have to give out rewards at a much higher rate than their competitors in order to keep customers feeling like they are truly being rewarded. The app may have to offer a free sundae or small fries after every one or two orders in order to keep their reward values comparable with other brand's loyalty rewards. Despite these problems to consider, though, the app is a wonderful idea and will most certainly benefit McDonald's greatly, and will most likely draw in a higher number of customers.

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  9. Hi, I like your blog. I agree with the fact that it will bring in a lot more revenue for McDonalds and can be a very good thing. However, I am more concerned with the health aspect of this venture. America has a nationwide obesity issue and McDonalds over the years has tried to accommodate that by producing products that are healthier. However, it is still not as healthy as other options. With this new app it will allow people to get fast food at an even faster rate. Meaning that they will be more inclined to purchase it. With the rewards program as well it only temps people to go to McDonalds because they could be getting discounted or free food out of it. The more people eat at these fast food chains the more unhealthy America becomes.

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  10. I think that this new app will be incredibly beneficial to McDonalds. Not only does it give frequent customers rewards through a loyalty program, it allows them to order ahead of time and escape the line. Even though when you go to McDonalds you receive your food very fast, it is still convenient to walk in, pick it up, and walk right back out. I am not surprised that McDonalds has created an app, because a large amount of companies are starting to make apps to become more connected with their customers. In today’s society, we are constantly on our phones, and simply looking at the app on your home screen everyday reminds you of the company and is great marketing on their part.
    Not only will this app help McDonalds to acquire more loyal and happy customers, it will help them acquire more information about their customers including demographics, other companies that they are interested in, and their McDonald’s buying habits. This will help McDonalds see which of their products do the best, and which products they could potentially cut. McDonald’s app is an incredibly beneficial strategy for the company and will help them a lot in the long run.

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  11. McDonald's is an extremely successful fast food company that just seems to continue to grow and can be found all over the world. Known for it's cheap food that you never have to wait more than 5 minutes for, McDonald's is a convenient way to fill your hunger craving...for the moment. McDonald’s speed has made people more impatient and the app is just going to add to this impatience.
    This introduction of an app that lets you order food then go pick it up is similar to what Panera has been doing for a while now. But at Panera you have to wait a little longer for your food. But is this wave of apps that allow you to order your food before you’re at the establishment going to take over waiting in line for the food? This new technological advancement for companies, once it becomes second nature, is going to end up reducing the need for cashiers and lower the cost for companies in what they spend on employees that take orders. So in the end, is this app going to benefit companies or the customers more?

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  12. I think that this new app rewards program is a great strategy for McDonalds to catch up to their competitors, such as Chick Fil A, Chipotle, and Starbucks, that have recently overcome them in the fast food market. In order to reach the millennial generation, they need to reach out to their customers through different marketing tools and have a strong identity online. Like Starbucks, they are reaching customers in a way that gives them incentive and will bring new people into McDonalds. I would also be interested in what other steps that McDonalds is taking to keep up in a fast and evolving market. I believe that in order for McDonalds to compete in this market, they need to continue to target young millennials and grow their relationship with this generation.

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  13. Hello Tyler,
    I would like to start by saying that this is a very interesting topic, and I think it is appropriate to write a blog post about. I think that McDonald's is going to succeed in the fast-food market with the development of this new application. The fast-food market is incredibly competitive and it is always changing. In-order to stay relevant McDonald's has to examine and realizes ways to keep their customers happy and returning to McDonald's. I think that this new rewards program is a amazing strategy for McDonald's and it is a step in keeping McDonald's competitive advantage. Also, I like the questions that you asked at the end of the blog post. I think that the questions pose situations that consumers of McDonald's are going to take into consideration when they are trying out this new technology.

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