Coalition of Franchisee Associations

March 28, 2015

5 Big Myths About What Millennials Truly Want

Everybody's got something to say about millennials. I'll add one more attribute that 
millennials have in larger doses than previous generations - they want and usually 
get instant gratification when making retail transactions.

Want to purchase some music? Download it instantly on your phone or watch a movie 

or a favorite TV show - now. Have some shopping to do? Amazon will have  your 
purchase on your doorstep tomorrow or the next day. Travel reservations? Instantly 
made and confirmed by E-mail or text.

This is one of the reasons QSR drive-thru % keep going up. As I've written before, 

my two millennial children haven't been inside a McDonald's since their last time in
a Playplace. But, they've made many, many trips through McDonald's drive-thrus.

Does this sound like a generation who'll patiently sit around a McDonald's dining room

for 8 to 10 minutes waiting for a customized burger to be delivered to their table?

Maybe they will - once.

5 Big Myths About What Millennials Truly Want -

1 comment:

Anonymous said...

McDonald's does not have a Millennial problem, as it hinted in a recent earnings call. The real issue is the food it is serving. Food that is, for the most part, inferior to that of its competitors. It simply doesn't resonate with consumers, and it will take much more than a "myth buster" for this to change.

McDonald's recent earnings call lacked clarity. To their credit, management is trying to stem the sales decline and even conveyed a sense of urgency in doing so. The issue, however, is that management can't properly communicate what the actual problem is, rendering their solution haphazard. But, perhaps more concerning is the reactionary nature of these initiatives.

Both management and analysts alike were focused on the fact that Millennials are skipping out on McDonald's to go to chains such as Chipotle . Sonic reported a +4.6% same-store sales increase and, interestingly enough, didn't mention the word Millennials once on the earnings call.

Wendy's , another brand that has been resonating lately, isn't particularly focused on Millennials either. Why then is it necessary for McDonald's to pin its troubles on Millennials? The company's issues run far deeper than this and it will take some serious soul-searching for it to regain the momentum it once had.

The message sent to the McDonald's franchise system is loud and clear: we will do what it takes to grow sales and you better get on board. The current plan, as it stands, will be very expensive for franchisees and will not impact sales until sometime in 2016. It also fails to address the issues that have been plaguing the system for the better part of the past three years.

If you recall, the made-for-you rollout was initially a disaster that took several years to get right. It makes sense, therefore, to assume that the cost and the installation of new technology (create your taste)will be a disrupting force within the McDonald's system.

It will take years for the company to rework the system to this new service style and it will only impact approximately 30% of the business. The other 70% of the business is generated by the drive-thru, where customization is not an option.

Noticeably absent is an in-depth discussion revolving around enhancing the food and the menu. In fact, it seems as though the current strategy is to simply tell consumers how good the food is at McDonald's. There appears to be no plan to actually change, or upgrade, the food to offer the quality consumers are seeking. Merely, engaging in dialogue with consumers is unlikely to alter the secular decline in sales the company is experiencing.

There are many issues with McDonald's, which makes it odd that they would try to pin it on its disconnect with Millennials. While it's a convenient excuse, the reality is they don't have a Millennial problem. They have a cultural problem.