McDonald’s – one of the biggest and unhealthiest fast food chains in the world. As of 2013, the “Golden Arches” alone make up 21.7% of the world’s fast food market. This enormous piece of pie, McDonald’s is just discovering, is enabling them to charge more for their burgers by introducing self-serve kiosks in their restaurants. By introducing these kiosks, customers can now customize their orders even further without increasing the risk of human, or staff, error, which will ultimately increase customer satisfaction. However, this customization does not come free – kiosk meals will be more expensive than simply ordering from a cashier. As we learned in class six from guest speaker Professor Mahesh Nagarajan, if you have a unique idea that your competitors have not yet discovered or are not using (self-serve kiosks in a fast food restaurant), then you can charge more for your product as there is no alternative for the customer to turn to. In this case, McDonald’s has realized that less error in orders and quicker delivery times are important to keep customers loyal and happy, which is why they are experimenting with the idea of kiosks, particularly if customers are willing to pay 30% more for their McDonald’s meal. Moreover, according to McDonalds Canada’s CEO, John Betts, customers are “less rushed than at the counter, often prompting them to order more”, which at an already increased 30% purchase price, can really boost McDonald’s overall revenue. McDonald’s also realizes they need an alternative to the rising labour costs in Canada – many speculate that kiosks may be used as an alternative to employees. Even though fast food chains have not experimented to the full extent with digital ordering, McDonald’s appears to be on the verge of a massive breakthrough towards lowering operating costs and keeping customers loyal.
Sources
- Blank, Christine. Burgers By Design. N.p.: QSR Magazine, 2014. Web. 30 Sept. 2015. <http://www.qsrmagazine.com/exclusives/burgers-design>.
- Peterson, Haley. McDonald’s shoots down fears it is planning to replace cashiers with kiosks. N.p.: Business Insider, 2015. Web. 30 Sept. 2015. <http://www.businessinsider.com/what-self-serve-kiosks-at-mcdonalds-mean-for-cashiers-2015-8>.
- Strauss, Marina. McDonald’s rolls out upscale option. Toronto: The Globe and Mail, 2015. Web. 30 Sept. 2015. <http://www.theglobeandmail.com/report-on-business/mcdonalds-rolls-out-table-service-customized-burgers-in-upscale-shift/article26601464/>.