Measured Perspectives powered by Ipsos

December 4, 2018

Will delivery change our fast food culture?

Chris Kempczinski // WTF FOOD

Chris Kempczinski, is leading the burger giant through a turnaround strategy as price-driven rivals battle for market share. One potential bright spot is in delivery, which is growing between 10 percent and 15 percent industrywide.


When he thinks What the Future, Kempczinski wonders what will happen if quick service restaurants are disrupted by delivery the way Amazon has changed other industries. If consumers embrace quick service restaurant delivery as they have for books and furniture, that could redefine how convenience fits into our food culture.


GenPop: You asked about how consumers choose quick service restaurants and define convenience, and about their interest in trying a virtual delivery restaurant. Why did you ask these questions?

Kempczinski: For us, quick service was for many years defined by how quickly you could get through McDonald’s. With the growth of Amazon and the development of digital and mobile, the customer’s expectation of convenience is evolving. Delivery is probably the most obvious manifestation of that because delivery is not particularly quick. On average [our delivery is] about 26 minutes through UberEats, but it is short, convenient, and you don’t have to leave your house. It creates all sorts of opportunities for people that are a little bit more far-sighted about the ramifications. Anything that we can do to learn and think about that would be helpful to us.

Chris-Kempczinski

Chris Kempczinski is president of McDonald’s USA and earlier was McDonald’s Corp.’s chief global strategist after top executive roles at Kraft Heinz, PepsiCo and Procter & Gamble.

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GenPop: What potential do you see for delivery as a portion of future sales?

Kempczinski: What will be interesting is how delivery evolves. There are all sorts of new versions of that if you look at retail. Retail has delivery like you see with Amazon. But there’s click and collect where you order online via mobile and on your way past the location you just pick it up and go. To the degree that folks like McDonald’s come up with ways to keep innovating and delivering, it certainly could go above the 10 to 15 percent threshold.

GenPop: How might delivery change the dinnertime business in the future?

Kempczinski: We’re seeing the American consumer, in general, less centered on the traditional three meals a day. People are snacking more, and the definition of “a meal” is becoming a little bit more blurred between snacking and dinner. There’s maybe another thing, which is how people are working and whether fewer people are commuting because there’s more telecommuting. Delivery might be a nice way to solve for that because the customer wouldn’t have to go outside of the house. My sense would be that delivery would only help with development of dinner. We’re seeing more than half of our deliveries going out in the dinner and evening hours as opposed to the middle of the day or breakfast.

GenPop: How might quick service restaurants change in an autonomous world?

Kempczinski: You could envision a scenario where, as customers get more comfortable with autonomous delivery and drones, it really will start to redefine their expectations of convenience. It probably starts to change people’s driving habits which then impacts traffic through retail and QSR.

GenPop: What could that look like for the customer?

Kempczinski: You could be in an environment where customers are accessing entertainment more at home than they are out in theaters, cinemas, etc. That creates an opportunity for the restaurant industry because Millennials might not be going out to eat, but they’re not preparing their own food. It becomes a question of who is best able to offer customers the food at a price point with the quality and the level of convenience that they’re seeking. Scale becomes really important, because who’s going to have the infrastructure to be able to partner with whoever those providers are?

Americans value quality and price when choosing quick serve.

Thinking of quick service restaurants that serve made-to-order foods like hamburgers, french fries, sandwiches, pizza, chicken, tacos, wraps, salads, and hot and cold beverages, please rank what’s most important to you when deciding whether or not to visit.

RankPrice/valueConvenienceQualityBrandMenu OptionsLocation
1246416157
224122272114
3181814111919
4152311121722
512268161722
68153491016

Location drives convenience.

Thinking about quick service restaurants, what defines convenience for you?

RankHours openLocationDeliveryDrive-thruApp for ordering aheadSpeed
11738713520
225201018622
322161018923
4191217241117
512933162110
6752312495

(Source: Ipsos survey conducted between Oct. 10 and 12, 2018 among 2,010 adults in the U.S.)

Timing is key to this disruptive scenario.

Think about if a company started a virtual restaurant. This restaurant has no retail locations (there is no seating and no drive-through). The restaurant will deliver hot and cold food to you that you order from a website or app. Please indicate how much do you agree or disagree with each of the following statements. (Agree net)

83%

77%

79%

79%

I would be willing to try ordering if it was from a brand I know and trust.I would be willing to try ordering from this company.I would be willing to order from this company if the food was delivered in 20 minutes or less.I would be willing to order from this company if the food was delivered in 30 minutes or less.

28%

31%

61%

I would be willing to order from this company if I had to order 24 hours in advance.I would be willing to order from this company if I had to order 6 hours in advance.I would be willing to order from this
company if I had to order 1 hour in advance.

(Source: Ipsos survey conducted between Oct. 10 and 12, 2018 among 2,010 adults in the U.S.)

GenPop: How might digital change things in the future?

Kempczinski: As more of the customer interface becomes through digital, it’s not going to come potentially through someone at the front counter. That digital device opens all sorts of new ways for us to have a relationship with the customer. Are there ways that we can take out pain points in the ordering process? Maybe we know what that customer likes to order or order on a particular day at that particular hour.

We can start coming up with solutions that make it easier for the customer when they’re looking for a meal at home to pick McDonald’s. We’re investing quite a bit around [customer relationship management] capabilities around digital so we’re going to have a strong IT platform to really forge those new customer relationships.

 

GenPop: What cultural implications do you envision as delivery becomes more important?

Kempczinski: I can’t ever envision the day where we’re not going to have restaurants with lobbies that are hosting birthday parties and PlayPlaces and having families come in and enjoy meals in the restaurant. What I think ends up happening is people just have different ways that they access the brand. There will be times that they’re going to be looking for an in-dining experience, or a drive-through experience, then other times that they have an at-home experience.

GenPop: How will you redefine convenience in the future?

Kempczinski: If you’re at home, clearly, you’ve made a choice that you’re willing to wait roughly 26 minutes for food to show up, but you never had to leave your house and you have the convenience of being able to order on your device and potentially add multiple orders. If you’re in the drive-through on your way to work, you’re all about how quickly you get through there and on your way. If you’re in the restaurant and trying to enjoy time with your family, then the more that we can do things like table service, free refills or ask if we can get you a dessert, that becomes a different definition of convenience. For us, the word convenience is becoming a bit more ambiguous or situationally dependent, depending on the sort of customer and what their need is at that occasion

“For us, the word convenience is becoming a bit more ambiguous or situationally dependent.”

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