McDonald’s is trying to compete with Starbucks’ biggest advantage — here’s who comes out on top (MCD, SBUX)


McDonald's Kiosk

McDonald’s and Starbucks are making major investments in mobile ordering apps.
As foot traffic falls, chains are growing sales by convincing customers to order on their smartphones.
We tried both McDonald’s and Starbucks’ mobile apps — and discovered McDonald’s is catching up to Starbucks’ digital domination.

As foot traffic falls flat, chains are turning to mobile ordering in an attempt to boost sales.

The number of orders being placed via mobile apps skyrocketed by 50% in US restaurants in 2017, according to data from the NPD Group. And, Business Insider Intelligence predicts that by 2020, mobile order-ahead will account for 10.7% of all quick-service restaurant (QSR) sales.

So far, Starbucks has led the way in mobile order and pay. Mobile and other digital payments make up nearly a third of all of the coffee chain’s sales, and they account for even more of the company’s sales growth.

“Almost all of our same-store sales growth is from those customers that we have digital relationships with and those that are in our Starbucks Rewards program,” Starbucks CFO Scott Maw said at a JPMorgan forum in March.

Seeing Starbucks’ success, other chains are trying to cash in on mobile ordering. In 2017, McDonald’s announced plans to roll out mobile ordering at all US locations.

However, while mobile orders are intended to make ordering more convenient for customers, they can also create new issues. Starbucks has faced problems with overcrowding and bottlenecks in the past, though these seem to have been resolved with some behind-the-scenes changes.

With McDonald’s building out its more gourmet coffee offerings and Starbucks working to improve its food selection, the two biggest chains in the US by sales are competing more and more. So, we decided to see how their mobile-ordering …read more

Source:: Business Insider

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