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Will McDonald’s mix-and-match strategy work?
As McDonald's (NYSE: MCD) celebrates its 75th anniversary amid recent food scandals and falling revenue, it is turning to automation and customization to keep things fresh with customers in Asia.
"Create Your Taste" is McDonald's pilot experiment in Singapore, Australia and Kuwait to cater to the changing tastes and preferences of consumers, and to create an experience.
This new service lets customers self-order through a touch screen kiosk and personalize gourmet burgers with specialty ingredients like angus beef patties and grilled pineapple rings.
The process allows the customer to be in control of the whole experience, co-creating with McDonald's by mixing and matching ingredients.
"I see 'Create Your Taste' as just being another great platform that actually grows the category and the business, and helps transform the QSR industry," said Peter Rodwell, division president for Asia Pacific, Middle East, Africa at McDonald's, in a CNBC interview.
"It is a burger leadership move," said Rodwell.
Is it enough?
McDonald's has had several innovative services and platforms such as McCafe, food delivery and desert kiosks that is experimented regionally before being scaled internationally.
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But these measures might not have been enough in the face of steep competition from other burger chains and fast food retailers.
McDonald's reported disappointing first quarter worldwide earnings, with global comparable store sales down by 2.3 percent and an 8.3 percent decline in its APMEA region.
A turnaround plan was announced by the new CEO Steve Easterbrook's in May to refranchise 3,500 restaurants, introduce a new organization structure, and a focus on digital.
The fast food retail chain has also been battling negative publicity from food safety scandals in Japan and China.
McDonald's is repositioning part of its brand and "renewing the relationship with their consumers using empowerment and innovation," said Cassandra Tan, research analyst at Euromonitor.
"The modern consumer of burger joints and fast food are conscious of quality, taste, variation, novelty and product packaging," she added.
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And the modern consumers are lovin' it.
According to Rodwell, the response in Australia and Singapore has been overwhelming at this stage, and there has even been a need to hire 15-20 more staff per restaurant with this service.
McDonald's will be launching 'Create Your Taste' across Australia with 750 restaurants that will provide this service by July. There will also be ten more outlets in Singapore by the year end offering this customization burger service.
Plans to pilot this service in Shanghai and Seoul are also underway.
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