Wednesday, February 24, 2021
Feb. 24, 2021

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McDonald’s taking time bringing app

Burger giant slow with technology giving boost to other chains

The Columbian
Published:

In 2013, McDonald’s described a future where customers could order Big Macs on a smartphone. Almost two years later that vision remains far off, even though fast-food apps have become commonplace in much of the industry.

While McDonald’s will test mobile ordering in the U.S. next year, the technology may not be widely available in 2016, a spokeswoman said. Contrast that with the competition. Starbucks has had a smartphone app for more than five years and began taking mobile orders in 2014; Chipotle is even letting customers order burritos with the new Apple Watch. For now, McDonald’s customers will have to content themselves with mobile coupons, in an app scheduled to arrive this fall.

“McDonald’s is a company that tests and tests and tests before rolling out technological change through its vast system,” said Asit Sharma, an analyst at the Motley Fool. “It’s a detriment when customers’ expectations are constantly set by competitors’ innovations.”

An app won’t cure all that ails McDonald’s — when the company reported earnings Thursday, U.S. sales fell for a seventh straight quarter — but without one, Chief Executive Officer Steve Easterbrook will struggle to reignite growth and attract younger diners who live online.

The restaurant industry is a relative laggard technologically. McDonald’s didn’t get around to hiring a chief digital officer until 2013. Atif Rafiq arrived from Amazon, where he ran Kindle’s direct publishing business. He also worked at Yahoo and AOL. Since his arrival, McDonald’s has followed a well-trod path by opening trendy offices it hopes will lure tech talent. One’s in Silicon Valley, the other in downtown Chicago — a few miles from the company’s Oak Brook, Ill., base.

Late to the party, Rafiq’s team has been busy testing a variety of payment and ordering technologies with the likes of Visa, PayPal and Google. Last year, McDonald’s and Visa began tryout out an app in Singapore that allowed consumers to select food, pay for it and arrange for delivery. McDonald’s is working with Google on “hands-free” technology that would let customers order and pay without pulling out their phones.

The coupons app will roll out across the U.S. in October. Next year, McDonald’s plans to test ordering at a limited number of restaurants, said Becca Hary, a company spokeswoman.

“We feel this is a great starting point from where we’re taking the entire digital experience,” Hary said.

Making mobile apps work seamlessly at a sprawling company is a big undertaking. McDonald’s has more than 14,000 U.S. locations; only Subway has more. An ordering app must be integrated with a national computer system and work at drive-thrus, where McDonald’s generates about 70 percent of U.S. sales.

“A lot of what you see the merchants doing now is less full-blown roll-outs and more pilots,” said Sam Shrauger, a senior vice president at Visa. “They’ve spent 50 years optimizing the operations of the store environment. Any disruption to that or modification of the models they have in place may have operational consequences.”

Perhaps the Taco Bell experience will help persuade McDonald’s franchisees — and spur the company’s mobile efforts.

Since debuting an ordering app last year, the Mexican fastfood chain has found customers typically spend 20 percent more than in person. Why? Because adding extras like guacamole, sour cream and bacon is so much easier from a smartphone.

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