Big Mac fans will be lovin’ it. This would happen if reports of McDonald’s’ customer loyalty revamp are true. The burger giant has fared well during the pandemic as its drive-through sales have been robust and make up about 70% of volume. Its current mobile app allows for fast order and pay, although most customers still use cash and plastic to pay.
Mobile apps provide a preferable contactless payment in this time of social distancing. So now, what better way to encourage contactless pay, and boost sales as well, than by adding a loyalty angle to the app?
McDonald’s has been late to the party on a full loyalty program that includes food and not just its coffee. It does offer daily deals on the mobile app, but it does not tally points or visits that customers can earn for future food redemption, as many Quick Service Restaurants (QSRs) do.
Mobile apps that integrate order and pay, loyalty, and marketing offers increase customer engagement, which translates to more frequent visits and higher sales. McDonald’s may see longer lines at the drive-through with an expanded loyalty program, but that will be a problem they would love to solve.
The following excerpt from a NY Post article reports more on the topic:
McDonald’s, which recently ran out of ingredients for its mega-popular Travis Scott meal promotion, is quietly gearing up to test a food loyalty program to boost pandemic sales. At least that’s the word on Wall Street, thanks to a little-noticed research report detailing a powwow brokerage firm Morgan Stanley recently had with several top McDonald’s executives, including CFO Kevin Ozan and the president of McDonald’s US operations Joe Erlinger.
Among the takeaways from the virtual meeting is that the burger slinger “expects to (finally) launch a loyalty program and is working on plans to test one, which could be a key mobile unlock,” according to the Sept. 18 note.
McDonald’s has long had a rewards program for its McCafe line of coffee-based drinks, which lets customers get a free coffee after making five purchases via the app. But the chain behind the Big Mac has never doled out rewards to loyal consumers of its burgers and fries — despite widespread adoption by the rest of the industry.
Morgan Stanley predicted that the new loyalty program will help drive more people to order their meals via McDonald’s app, which would then help to “relieve some drive-thru capacity.” Both online ordering and drive-thru service have both become popular during the pandemic as ways to avoid coming in contact with coronavirus.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group