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April 18, 2015

Imagine All The People

I've talked to more reporters in the last 60 days than all of 2014. Usually these folks 
cover McDonald's out of Chicago or they cover the industry in general. In either case 
they know something about McDonald's so conversations are sometimes routine.

McDonald's had a  presence at a technology summit in Austin TX last month and the 

reporters covering the event knew nothing about McDonald's. A reporter who normally 
just reports on technology developments asked this question:

"How is this digital strategy different from previous initiatives McDonald's franchisees 

have been asked to buy into?"

I responded, "It's imaginary".

A better word might have been "conceptual", but I explained that previous initiatives 

involved remodeling, adding equipment, or new products. These have been tangible 
things that can be tested or observed in other areas of the industry.  Mobile payment, 
mobile ordering, kiosk ordering, etc. are all in the initial testing stages and nowhere 
has any chain proven that they builds sales or fit into the operation of the restaurant.

Last week I shared this line of thinking with a Wall Street analyst and they replied. 

"It's working at Panera Bread".


As of mid-February Panera 2.0 is in 300 of their 1,900 stores and their CEO hopes to 

have it 600 stores by the end of 2015, so far only in company operated stores. Panera's Management has been talking about Panera 2.0 for a long time but they haven't yet 
proven anything, except it's an expensive implementation.

Smashburger launched their mobile app three weeks ago. Sonic is making noise about 

a "21st century network with our customers" but so far it's just talk.

In March, When asked about their digital strategy, McDonald's CFO told an investor conference "We are a little late to the game". No they're not! Everyone's at the 
beginning and no one's proven anything.

One of the reasons digital seems like an established part of the restaurant industry is

that much of the hype is created by the people who sell the hardware and software. It's 
in their best interest to make digital seem like proven technology.

And it all sure sounds good - maybe some of it will pay for itself?



Anonymous said...

Due to excessive Labor and Union demands, Kiosks will be badly needed very soon to mitigate excessive Labor costs. Being a cashier is NOT worth $10-$15/hr

Anonymous said...

Theres an East coast C-store which seems to have figured Kiosks out called Sheetz.

But of course the suits in Oak Brook wont even look at anything "Not Invented Here"

Anonymous said...

And the suits have to take thier time and find vendors who will pay big enough kick backs.

Anonymous said...

#3 has hit the nail on the head ! A few years ago, a vendor I talked to was trying to get on the McD "approved" list to sell to us. He submitted all the forms, the visits & inspections. But he was still not approved. He traveled to Chicago and met with McD execs. As he tells it , there was NO DOUBT in his mind that the suits indicated and expected a kickback or he was not getting approved. Today he sells to our competition.