McDonald’s Looking a Customer Ahead and Sharing some Success Clues

 

Success does leave clues and McDonald’s has picked up a lot of clues over the years and according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® from time to time they share some of the clues will all of us.  When they do it’s important that you take note of what they are saying.   This is one of those times.

Fast-food behemoth McDonald's is making a strategic shift towards digital marketing, with plans to invest hundreds of millions of dollars in digital innovation. This includes new ordering channels, personalization, and loyalty programs. The move underscores the growing importance of digital marketing in the food industry, particularly for chain restaurants. 

1.   McDonald's is creating a digital marketing fund in the U.S., which will account for 1.2% of franchisees' digital revenues starting in 2025. This fund will be financed through existing marketing contributions from franchisees. 

2.  The company anticipates that this reallocation of contributions will enhance a typical store's cash flow by approximately $2,600 per year. 

3.  The strategy involves diverting funds from lower ROI marketing initiatives to digital marketing. The specifics of these shifts will be determined in collaboration with franchisees. 

4.  McDonald's Global Chief Marketing Officer, Morgan Flatley, stated that the company has already started to balance traditional mass media spend with investment in digital marketing capabilities. 

5. McDonald's digital sales have been instrumental in driving overall sales growth in recent quarters. The company's loyalty program has amassed 150 million active users globally and 34 million in the U.S., surpassing Starbucks. 

6.   Future investments will focus on new ordering channels, including web-based ordering without app downloads, personalized order recommendations, and next-generation loyalty features. 

7.  In 2025, McDonald's will shift funding for its digital marketing tools, such as its mobile app and customer relationship management system, into its digital marketing fund. This approach will initially be adopted in five global markets: the U.S., Australia, Canada, Germany, and the U.K. 

8.  Tariq Hassan, McDonald's U.S. Chief Marketing and Customer Experience Officer, and Whitney McGinnis, U.S. Chief Information Officer, emphasized the need to modernize the company's marketing model to personalize customer interactions. 

9. They also stated that the company will collaborate with franchisee leadership to incorporate digital marketing costs into the marketing budget and align this change with McDonald's 2025 plans in the U.S. 

10.  They believe this funding model will enhance understanding of consumer behavior, optimize customer lifetime value, and maintain systems for data management, network security, and data storage. 

This shift towards digital marketing underscores the critical role of digital innovation in the food industry. It highlights the need for chain restaurants to allocate separate funds and campaigns for digital marketing, ensuring they stay competitive in the evolving market landscape. 

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information.