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Are mobile vouchers and millennials the right combo meal for McDonald’s?

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January 27, 2015

McDonald's is using mobile as a rebuttal to a challenging 2014

McDonald’s is using mobile as a rebuttal to a challenging 2014

As its profits continue to drop, McDonald’s is turning to targeted mobile vouchers in a bid to salvage brand loyalty and drive in-store traffic as other food brands such as Dunkin’ Donuts and Starbucks go from strength to strength with their mobile rewards platforms.

The fast food chain has inked a deal with mobile voucher developer VMob, previously known as VoucherMob, to begin rolling out more mobile offers to its customers in the United States. Although the deal has resulted in VMob’s shares doubling, McDonald’s is still struggling to stay competitive in the food sector following a challenging 2014, which saw the brand’s sales decrease by seven percent and annual profits drop by 15 percent.

“Promotions are a critical part of any QSR business as the QSR category heavily relies on spur-of-the-moment consumptions, but it’s not without some caveats,” said Brian Adams, executive creative director at Resource/Ammirati, Columbus, OH. “McDonald’s recently launched advertising that is clearly targeting millennials and pushing for more brand transparency.

“Millennials love authentic brands and mobile is the no-brainer way to reach them. However, millennials don’t necessarily respond to coupons or offers the same way as older generations.

“The key will be how mobile offers are triggered and targeted. If not executed well, McDonald’s may be seen as spamming customers and could dilute its new brand positioning,” he said.

Betting on mobile
McDonald’s is placing an increasing focus on its mobile strategy in a bid to target more consumers, especially with geo-location. Recently, the brand rolled out wireless charging stations in more than 50 bricks-and-mortar locations in Britain in an attempt to prompt customers to visit stores and purchase food while charging their mobile device for free (see story).

McDonald’s specifically did not disclose which of its locations offer the Qi wireless charging platforms so that consumer traffic will increase steadily in all of its stores across the nation.

VMob’s agreement with the maker of the Big Mac and Quarter Pounder will offer access to 119 of the chain’s markets with a rollout planned for the United States soon. While the details are being kept under wraps, the deal is said to expand on its existing partnership with McDonald’s in Sweden, Japan and the Netherlands.

VMob’s mobile vouchers target consumers based on real-time data such as app browsing behavior, nearby events, weather, social data and general location. Users that receive a voucher may redeem it in-store by tapping and “activating” it, which gives the customer a limited time to present it to the cashier.

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The McD app, seen here, is powered by Mowingo   Credit: Mowingo

Each customer is assigned a unique code so that VMob’s platform may easily track conversion rates, measure return on investment for brand campaigns and prevent users from activating the same promotion twice.

Select mobile vouchers may also be shared via social networks or gifted to users’ friends.

The “live marketing” platform uses mobile marketing analytics and beacons. VMob’s beacons can send targeted content to consumers in the same proximity as one of its beacons, and can also track foot traffic in-store to optimize store layouts.

This past December, McDonald’s rolled out beacons at locations in Columbus, GA to greet customers with coupons, alerts and surveys as soon as they walked in the door (see story). The move saw 18,000 offer redemptions occur, proving that beacons are a strategy worth exploring.

“Enhancing the McDonald’s mobile strategy is a great first step, but it won’t single handedly turn around sales numbers,” Mr. Adams said. “It used to be OK for brands to offer basic utility in mobile, but now consumers are demanding much more.

“They want utilities like online ordering, integrated rewards programs, mobile payments, job applications, store locators and more. Success for McDonald’s depends on how well the brand understands the journey of its customers.”

The McD app, which is used in thousands of locations, is powered by Mowingo. The app offers users mobile-only promotions, which can also be redeemed at the tap of a finger.

Customers can receive time-sensitive and store-specific offers via the app, which must be handed to store associates within two minutes of being opened (see story).

Mowingo’s platform enables marketers to view analytics about their app users, which has led McDonald’s and other brands to leverage its CRM options and location-specific QR codes.

Changing marketing tactics
McDonald’s is also changing up marketing tactics to reflect the brand’s growing dedication to serving healthier and fresher products. Its recently revamped “I’m Lovin’ It” campaign included new television advertisements showcasing healthier menu additions such as Cuties clementines in Happy Meals (see story).

The brand is also encouraging discussion on social media mobile applications such as Twitter by enabling users to ask any questions about the quality or substance of food items in a bid to curb misconceptions.

This yer is shaping up to be a crucial one for the fast food chain as other brands including Shake Shack and Starbucks continue to gain loyalty among consumers. McDonald’s 2014 global sales fell to $6.5 billion, below analysts’ predictions of $6.7 billion.

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The revamped campaign highlights healthier options

If the brand wants to make more headway with consumers, sending location-based promotions by way of iBeacons is a good first step. However, to compete with Starbucks and other heavy-hitters in the mobile field, McDonald’s must ensure that its products are satisfying enough to capture consumer loyalty, which can then be augmented via mobile offers and ordering capabilities.

“Starbucks continues to be the leader in mobile,” Mr. Adams said. “The brand made mobile transactions simple and it rewards customers easily.

“However, we’re seeing more brands deliver on more than just utility. Taco Bell and Chipotle have made great strides in mobile, but we predict brands will start to build even stronger utilities and leverage more precise and even real-time insights to improve order customization and pickup.

“They will also more tightly aligning mobile strategies with brand campaigns that extend the consumer experience. QSRs need to build strong bonds with customers beyond coupons and give them reasons to stay loyal to brands,” he said.

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York

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Alex Samuely is staff writer on Mobile Commerce Daily, New York. Reach her at alex@mobilemarketer.com.

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