McDonald’s Starts Testing Mobile Order and Pay Ahead

by Raymond Pucci 0

While late to the party, McDonald’s recently announced their version of mobile order ahead and pay would debut in the US by end of 2017. The burger chain is now piloting its mobile order ahead app at select California locations, with some in Washington state soon to follow, according to the following report.

McDonald’s began testing mobile ordering and payments on Wednesday in select U.S. markets — the first to receive the technology as part of a pilot test aimed at working out the kinks ahead of a full rollout across the U.S. and to other international markets by year’s end.

Initially, mobile ordering is available in 29 restaurants in Monterey and Salinas, California, through the company’s mobile application. The test will then expand to 51 more restaurants in Spokane, Washington on March 20, McDonald’s says.

By Q4 2017, McDonald’s plans to have mobile ordering live in its 14,000 U.S. restaurants. In addition, 6,000 others in Canada, the U.K., France, Germany, Australia and China will receive the technology by year’s end, Reuters noted.

The McDonald’s mobile app already allowed customers to browse the menu, check out the weekly deals, find nearby locations and more. But now it will begin to allow customers to place orders and pay within the app, as well, as mobile ordering becomes more broadly available.

Its implementation of the technology is a bit different from its fast food rivals. After customers place their order and pay in the app, McDonald’s uses geo-fencing technology to track the customer’s location, so their food is only prepared when they’re physically near the store. This will save the food from remaining under heat lamps for too long.

The time savings this will ultimately produce for some customers is questionable, as McDonald’s has already made a number of improvements to speed up its service over the years — especially through its drive-thrus. Its food may not be the best, but it’s certainly known to be quick.

However, for larger orders, mobile ordering has an advantage. McDonald’s tells us that the typical ordering process for 2-3 items takes 17 seconds on average at drive-thrus, but those with 8-10 items can take 50-100 seconds. Mobile ordering brings those averages back down to round 10-15 seconds.

Surprisingly, McDonald’s, Burger King, and Wendy’s have been missing on the increasingly popular Mobile Order and Pay bandwagon. Pizza chains, coffee shops, and others have discovered mobile ordering to be a new sales channel delivering profitable results. Mobile ordering typically results in higher check amounts and more frequent visits. Fast food restaurants also experience higher staff productivity and increased capacity utilization with the additional sales volume. We’ll have to wait to see out how appetizing burger fans find the new mobile ordering app from McDonald’s.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

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