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McDonald’s Aims To Become McData As Digital Strategy Takes Center Stage

Companies evolve over the decades – they have to, in order to remain competitive. Often, technology becomes a key differentiator. And a motto for the quick-service restaurants (QSRs), for the marquee names such as Pizza Hut and Chipotle and McDonald’s, the motto may be: Go digital or go home. The customer will eat their lunch somewhere else … and your competitor will eat your (proverbial) lunch.

So, it’s not all that far-fetched that McDonald’s is being re-imagined as a tech company.

“It’s clear that our next chapter will be driven by our leadership in digital, as we build on our momentum and embed our digital capabilities through the customer experience,” said McDonald’s President and Chief Executive Officer Chris Kempczinski in the release that accompanied the burger giant’s earnings results on Wednesday (July 28).

In the announcement, the firm said that year-to-date systemwide sales from digital channels across McDonald’s top six markets were nearly $8 billion — a 70 percent increase versus the prior year. In the U.S., comparable sales were up nearly 15 percent on a two-year basis, and were up just under 26 percent from a year ago.

In terms of the metrics that Wall Street watches, earnings per share came in at $2.37 vs. the $2.11 that had been expected. The top line, consolidated, surged by 40 percent year on year to $5.8 billion, outpacing the $5.6 billion that had been in place as the consensus estimate.

Management has remarked that 70 percent of the firm’s restaurants have reopened. But even with that rebound in the brick-and-mortar side of the business, it’s clear that the digital focus is firmly entrenched across channels. News this month has swirled over the launch of the MyMcDonald’s Rewards program, and the fact that the company will house its digital, data analytics, marketing, restaurant development and operations components as one joint entity.

The benefits of a robust rewards program are underscored by the data. Recent PYMNTS research has shown that loyalty program users spent almost twice as much on takeout monthly as their non-user counterparts, $200 compared to $104. In addition, roughly half of restaurants offer at least some form of a loyalty and rewards program. And a bit more than half of restaurants believe that digital payments will help pave the way toward success.

Digital in the Early Stages 

In the earnings call with investors and analysts, McDonald’s management said the digital strategy still is in its “early stages.”  Younger consumers, in particular, are looking at the McDonald’s app as a principal point of engagement. The loyalty programs, according to commentary on the call, are driving digital adoption, shorter purchase cycles and greater frequency of visits.

There were 12 million loyalty customers in place even before the company “even turned on the advertising” for the program itself. The firm is targeting an expansion of its loyalty program and presence to be part of the drive-thru service as well.

In this way, high tech and the omnichannel experience lead the way toward earnings growth, and toward a post-pandemic sales and earnings bump. The data and the digital are everything – but it all just happens to have burgers thrown into the mix.

Read More On QSRs:

McDonald’s Focuses On Rewards, Digital Initiatives With New Business Unit NEW REPORT: QSRs’ Lagging Loyalty-Reward Investment Hurts Innovation And Sales FinTech Goes Niche With Slice’s Pizzeria Payment Platform How Chipotle Is Protecting Its Mobile-First Diners From ATO Attempts

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