McDonald’s admits app adoption rates are ‘pretty low’ but it will keep investing in mobile

Addressing investors, Easterbrook didn’t go into specifics around download numbers or sales conversations around the app / McDonald's

McDonald’s is two years into journey to connect the dots between how consumers behave offline and online via its mobile app. The US is its testbed, but chief executive Steve Easterbrook has conceded that adoption is still “pretty low”.

When the fast-food chain first unveiled the platform in 2016, Easterbrook was confident that the tool – which affords diners the ability to click-and-collect food and sends them personalized offers – would become an “increasingly compelling” part of McDonald's data arsenal.

However, discussing the uptake of the app two years later Easterbrook took a more modest tone.

“Current adoption is pretty low, but the platform is getting more reliable,” he said during the brand's Q1 earnings update on Monday (30 April)

“We’ve still got things we want to improve on our end, including the user experience and training the teams in our restaurants. The adoption is still relatively low but it’s certainly seeing the curb side [click-and-collect] pick up being the most favoured benefit among customers.”

Addressing investors, Easterbrook didn’t go into specifics around download numbers (which hit 7 million months after its release) or how many sales had been processed by the app in the US.

But to improve adoption rates, he said McDonald’s will focus on improving the product itself, rather than funneling marketing spend into it.

“We’re not going to be putting massive emphasis behind it in terms of promotion, for example ,but it’s pretty inevitable that our customers will increasingly engage with us as brand and business through their phones. So the fact we’ve got a product out there that’s decent at the moment is an upside, we’re excited about the potential."

If McDonald's can crack the app, it will not only be afforded the ability to track consumer behaviour online but also the potential to drive traffic in-store. Since the US version launched, the chain has also unveiled similar propositions in the UK and Canada.

Stores of the Future

Away from mobile, the company has plans to accelerate its 'Experience of the Future' concept throughout 2018. This will see it revamp stores with tech like touch-screen order points and Uber Eats tie-ups internationally.

Menu innovations also fall under this proposition, with flat white coffees and 'gourmet' fresh beef burgers finding their way into stores.

In the US, McDonald's has committed $2.4bn to this mission with the target of remodeling 1000 stores per-quarter this year alone.

"We're keeping the customer at the centre of everything we do as we continue enhancing their McDonald's experience. Guided by our 'Velocity' growth plan, we are satisfying the rising expectations customers have for the taste and quality of our food and greater convenience as they visit our restaurants or enjoy meals delivered to their homes and offices," continued Easterbrook.

"We are confident in the strategies guiding our business for today and for long-term sustained growth into the future."

The company enjoyed a 5.5% year-on-year sales increase globally in Q1 of 2018. McDonald's net income rose to $1.3bn over the same time period, with sales in the US - its biggest region - enjoying a bump of 2.9%.

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