Chicken McBites. Bacon McWraps. Cheese Mac ‘n Bites. A snack bar similar to Chipotle? Donuts? For a company famous for its controversial ads starring children, creativity in marketing will also play a key role. These innovations represent just a small section of what McDonald’s will have to bring to its customers in 2021.
McDonald’s is facing a “horrific” decline in customer loyalty, said Brian Yarbrough, a retail analyst at Edward Jones. After reporting quarterly profit that fell by more than half in the quarter ending April 30, McDonald’s stock fell by more than 5 percent Wednesday. “This makes us really concerned for ’21,” Yarbrough told USA Today, “and that the only strategies they can come up with are not cost effective or desirable.”
While many of the chain’s features aren’t changing—and don’t even appear to be transforming—the company is undertaking a broad business review that will assess if it should stay in the fast-food business or go on a different trajectory.
Brian Niccol, president of McDonald’s Americas, has already told Bloomberg News that he doesn’t rule out radical changes. “Our menu is very Darwinian. We’re going to have to figure out if we need to evolve it,” he said. “We’re going to have to figure out if we need to market it in a completely different way.”
These shifts will be expected to happen not just in the United States but around the world.
Other restaurant competitors aren’t likely to follow the same path. Chains like Taco Bell and Shake Shack have developed what many see as more differentiated concepts: At Taco Bell, you are served small, organic ingredients like cilantro-lime corn tortillas, cactus and zucchini in dish bowls (Snack Mix tacos), and two-topping “Foursquare Blaze” kits that include a choice of guacamole and sour cream (New national ad campaign “Give it to me quickly” is with you, too). Shake Shack, meanwhile, has focused on a highly differentiated hospitality experience, and its customers praise it as if it were a superior version of McDonald’s.
Even McDonald’s already claims to have created a new fast-food generation: Millennials are its most frequent patrons.
Here’s how they were sold to McDonald’s.
An annual report last year revealed that the average income of McDonald’s customers was more than $42,000. Millennials in particular eat at the chain at rates higher than any other generation—it’s a favorite place for them to bring their kids. McDonald’s is now using its own data to target customers based on their personal habits in an effort to convince them to buy more food.