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McDonald's Tests Mobile Ordering; Rollout Slated for Year-end
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As per recent reports, McDonald's Corp. (MCD - Free Report) has finally begun testing mobile order-and-pay capabilities on its app in the U.S.
Presently, the burger giant is testing the technology at 29 restaurants in Monterey and Salinas, CA. Notably, its pilot program is set to expand to an added 51 restaurants in Spokane, WA on Mar 20.
Interestingly, the company plans to conduct various pilot tests to gather customer feedback, work out any flaws as well as streamline the integration with the company's prevailing technology systems before launching the option in nearly all 14,000 U.S. restaurants and 6,000 others in the UK, Canada, France, Germany, Australia and China, by the end of this year.
Additionally, McDonald's digital expansion will witness a more prominent presence of ordering kiosks in restaurants. These kiosks can help ease lines at the counter, enhance the accuracy of orders and speed up the ordering process by bringing up customer's favorite and past orders from the app, as well as preferred payment methods.
Notably, the company is at present testing most of its novel efforts in a Chicago warehouse, where it has established a brand new high tech restaurant.
Rationale Behind
The rollout comes as customers progressively seek out convenience via options like online ordering or delivery.
Thus, the company looks toward pushing to catch up with established mobile ordering offerings from competitors like Starbucks Corporation (SBUX - Free Report) , pizza giants Domino’s Pizza (DPZ - Free Report) and Papa John's International Inc. (PZZA - Free Report) , Panera Bread Company , Dunkin' Brands Group, Inc.’s Dunkin Donuts, among others. All of these companies have seen sales increases after the launch of mobile ordering options and loyalty programs, lately.
In fact, Domino’s is in the forefront of digital ordering and customer convenience given its world-class digital ordering platforms like Google Home, Facebook Messenger, Apple Watch, Amazon Echo and Twitter. Evidently, at the end of 2016, the company generated over 60% digital sales in the U.S. Also, Starbucks holds a leading position in digital, card, loyalty and mobile capabilities, which has helped to attract customers to visit more often and spend more when they do.
Concerns
McDonald's CEO Steve Easterbrook has himself acknowledged that though the chain is making changes to augment the overall customer experience, the ordering process in its restaurants can be "stressful" in the initial stages of visiting.
Digital ordering has been in fact challenging for many restaurant chains and their customers. Domino's Pizza, now the industry bellwether, took years to get it correct. Starbucks' technology took far less time but the coffee chain giant admitted at its first-quarter fiscal 2017 earnings conference call that mobile orders came in quicker than they could be processed, leading to congestion at pick-up counters and backlogs that drove away time-crunched walk-in customers.
Thus, it would be critical for the company to avoid the Starbucks’ like service hiccup and ensure that mobile ordering does not hampers the quality and speed of food.
Bottom Line
McDonald’s shares have gained 11% over the past six months as compared to the 0.6% dip witnessed by the Zacks categorized Retail–Restaurants industry. Moreover, McDonald’s earnings surpassed the Zacks Consensus Estimate in each of the past ten quarters, with the trailing four-quarter average earnings surprise coming in at 5.67%.
However, the company has now witnessed four straight years of traffic declines and it thus considers mobile ordering as a way to bring back customers.
We believe McDonald's is definitely late to the mobile ordering game and it won't be easy for the fast food giant to pull it off with success. Nonetheless, adding mobile to its ordering options should boost speed and convenience for customers and given McDonald's large footprint in terms of locations, this should logically boost sales and enhance the company’s competitive position against rivals.
Given the challenges, it thus remains to be seen whether going forward McDonald's will be able to get the same level of usage for its mobile order-and-pay option as some of its competitors,
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McDonald's Tests Mobile Ordering; Rollout Slated for Year-end
As per recent reports, McDonald's Corp. (MCD - Free Report) has finally begun testing mobile order-and-pay capabilities on its app in the U.S.
Presently, the burger giant is testing the technology at 29 restaurants in Monterey and Salinas, CA. Notably, its pilot program is set to expand to an added 51 restaurants in Spokane, WA on Mar 20.
Interestingly, the company plans to conduct various pilot tests to gather customer feedback, work out any flaws as well as streamline the integration with the company's prevailing technology systems before launching the option in nearly all 14,000 U.S. restaurants and 6,000 others in the UK, Canada, France, Germany, Australia and China, by the end of this year.
Additionally, McDonald's digital expansion will witness a more prominent presence of ordering kiosks in restaurants. These kiosks can help ease lines at the counter, enhance the accuracy of orders and speed up the ordering process by bringing up customer's favorite and past orders from the app, as well as preferred payment methods.
Notably, the company is at present testing most of its novel efforts in a Chicago warehouse, where it has established a brand new high tech restaurant.
Rationale Behind
The rollout comes as customers progressively seek out convenience via options like online ordering or delivery.
Thus, the company looks toward pushing to catch up with established mobile ordering offerings from competitors like Starbucks Corporation (SBUX - Free Report) , pizza giants Domino’s Pizza (DPZ - Free Report) and Papa John's International Inc. (PZZA - Free Report) , Panera Bread Company , Dunkin' Brands Group, Inc.’s Dunkin Donuts, among others. All of these companies have seen sales increases after the launch of mobile ordering options and loyalty programs, lately.
In fact, Domino’s is in the forefront of digital ordering and customer convenience given its world-class digital ordering platforms like Google Home, Facebook Messenger, Apple Watch, Amazon Echo and Twitter. Evidently, at the end of 2016, the company generated over 60% digital sales in the U.S. Also, Starbucks holds a leading position in digital, card, loyalty and mobile capabilities, which has helped to attract customers to visit more often and spend more when they do.
Concerns
McDonald's CEO Steve Easterbrook has himself acknowledged that though the chain is making changes to augment the overall customer experience, the ordering process in its restaurants can be "stressful" in the initial stages of visiting.
Digital ordering has been in fact challenging for many restaurant chains and their customers. Domino's Pizza, now the industry bellwether, took years to get it correct. Starbucks' technology took far less time but the coffee chain giant admitted at its first-quarter fiscal 2017 earnings conference call that mobile orders came in quicker than they could be processed, leading to congestion at pick-up counters and backlogs that drove away time-crunched walk-in customers.
Thus, it would be critical for the company to avoid the Starbucks’ like service hiccup and ensure that mobile ordering does not hampers the quality and speed of food.
Bottom Line
McDonald’s shares have gained 11% over the past six months as compared to the 0.6% dip witnessed by the Zacks categorized Retail–Restaurants industry. Moreover, McDonald’s earnings surpassed the Zacks Consensus Estimate in each of the past ten quarters, with the trailing four-quarter average earnings surprise coming in at 5.67%.
However, the company has now witnessed four straight years of traffic declines and it thus considers mobile ordering as a way to bring back customers.
We believe McDonald's is definitely late to the mobile ordering game and it won't be easy for the fast food giant to pull it off with success. Nonetheless, adding mobile to its ordering options should boost speed and convenience for customers and given McDonald's large footprint in terms of locations, this should logically boost sales and enhance the company’s competitive position against rivals.
Given the challenges, it thus remains to be seen whether going forward McDonald's will be able to get the same level of usage for its mobile order-and-pay option as some of its competitors,
McDonald's currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>