McDonald’s has never had issues attracting a digital customer, U.S. leader Joe Erlinger said.
The burger giant’s domestic market—which includes 13,447 stores as of March 3—earned nearly $1.5 billion in digital sales in Q1. Additionally, roughly 20 million customers are using the app and delivery has grown to an all-time high in dollars and sales mix. McDonald’s growing list of Famous Orders—Travis Scott, J. Balvin, and soon global behemoth BTS—have fueled that digital boom, executives said. It’s a significant reason why domestic same-store sales soared 13.6 percent in Q1 compared to 2020, or 13.7 percent on a two-year basis.
Erlinger said the true digital challenge, however, is retaining those customers, and there will be a natural opportunity to do so when McDonald’s loyalty program arrives in the U.S. later this summer. The goal of MyMcDonald’s Rewards centers around creating a platform that elevates the brand, excites customers, and engages crew members. Erlinger said the program has checked all the boxes thus far.
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In tests markets Phoenix and New England, user adoption—as measured by guests ordering through the app—has increased significantly since tests started. Frequency has also risen; loyalty customers are far more likely to return in the next 30 days compared to non-loyalty consumers. Customer satisfaction is growing because guests enjoy the personalized experience of being greeted by their first name, Erlinger explained.
McDonald’s received “overwhelmingly” positive feedback from team members, as well. Erlinger said employees not only appreciate how the program is set up, but also the fact that they were trained using digital simulations.
“Of course as in any test, we’ve captured many leanings around training, operations, and deployment that will help us maximize the impact when we launch this nationally,” Erlinger said during the chain’s Q1 earnings call. “ … When you think about the impact this can have on the U.S. business, where 85-plus percent of the U.S. population actually comes to McDonald’s at least one time a year, if loyalty can build frequency given the base that we have of customers in the U.S., this is just a tremendous unlock for us.”
McDonald’s has spent the past couple of years globalizing its tech stack to facilitate a large-scale rollout of MyMcDonald’s Rewards. France, China, and other markets are already using the program, and it will also be launched in Germany and Canada later this year alongside the U.S. The burger chain isn’t ready to quantify the program’s impact just yet, but McDonald’s CEO Chris Kempczinski assured the company wouldn’t be moving forward on a global scale if it didn’t think there would be an incremental benefit.
In terms of the operational impact, the loyalty program is having a modest effect on the drive-thru. Order taking times are slightly up, but there will be benefits in the cash taking times. Kempczinski promised McDonald’s will have solutions in place to speed up the identification of customers at the order point.
“We’re not there yet, but I think it’s safe to say that we’ve got a number of ideas on how we’re going to be able to make that happen, and that’s part of our rollout plan over the next couple years,” Kempczinski said. “I think you can safely expect that we’re going to get a solution. It may not be the same solution everywhere, but we’ll have solutions in place.”