Why McDonald’s Keeps Winning The QSR Foot-Traffic Game
And what other brands can learn from it.
From Taco Bell to Burger King, a plethora of QSRs have expanded into the morning space — but McDonald’s remains the winner, with 52 percent share of foot traffic among the QSR breakfast leaders, according to the latest QSR Foot Traffic Trends report from GroundTruth (recently rebranded from xAd).
Part of this success is no doubt due to simple factors, like the chain’s size and number of locations, but that can’t entirely account for the loyalty the brand sees compared to its competitors of a similar scale: While Fast Casual customers as a whole are reportedly the “least loyal,” with only 24 percent returning to the same fast casual brand from month to month, 48 percent of McDonald’s customers came back over the same time period.
In light of these insights, GroundTruth’s Sarah Ohle talked to GeoMarketing about how McDonald’s keeps driving customers to its locations, and what physical businesses — from SMBs to enterprise — can learn from it.
GeoMarketing: From your perspective, why does McDonald’s remain the breakfast winner with 52 percent share among the QSR breakfast leaders?
Sarah Ohle, VP of Marketing Insights at GroundTruth: From our very first Q1 2016 QSR Foot Traffic Trends report, McDonald’s has held the lead in overall share of foot traffic, due at least in part to size and number of locations. However, another big aspect of their success is that they are constantly innovating and responding to market needs. One very clear example of this is their push for breakfast. McDonald’s was the first to offer an all day breakfast menu in October of 2015, and since then they’ve expanded the breadth of their breakfast options, with a focus on more sophisticated McCafe beverages.
Proving the success of these initiatives, our 1H foot traffic data shows McDonald’s experienced a 3 percent increase in breakfast share of foot traffic YoY when compared to a sample of brands.
What’s especially interesting, though, is looking at how much competition has increased over the past year. For instance, while there used to be only a few brands focused on breakfast, now we’re seeing increased foot traffic at breakfast for most of the major QSR brands. The biggest increase is coming from Burger King, who saw significant growth in their breakfast share of foot traffic after rolling out their egg-normous burrito last May. Clearly McDonald’s was onto something with their breakfast focus.
As far as their marketing tactics, what might other brands be able to learn from this?
Other brands can learn from McDonald’s by embracing innovation to respond to changing consumer needs. In addition to breakfast, perhaps two facets of McDonald’s success is through the updated brick-and-mortar location and continued expanded menu options. This in turn is essentially upgrading the fast food experience — and blurring the lines between traditional fast food restaurants like McDonald’s and fast casual restaurants like Panera Bread.
McDonald’s, and a handful of other fast food chains, are adopting more “fast casual” elements by investing more in interior design and offering upscale and healthier food options.
Examples aside from McDonalds include Wendy’s, which has been experimenting for some time with replacing their old carpets with tile and adding cocktail-style tables to encourage people to sit and stay. Taco Bell also launched redesigned concepts that include plush chairs, exposed rafter beams, and modern art. On the cuisine front, fast food chains are now focusing on healthy, fancier, and quick-style homemade food options. Consumers are increasingly being provided more upscale options, like lobster rolls at McDonald’s and truffled burgers and fries at Wendy’s.
What lessons are there in this for other brands — QSRs, retailers in other verticals, or even SMBs? How can they compete and drive more foot traffic to their physical locations?
As we’ve learned from Warby Parker, having a brick-and-mortar presence can prove extremely valuable for a brand. However, in the age of Amazon, some retailers struggle to drive foot traffic to their physical storefronts.
While the convenience of online shopping is a huge draw, the in-store experience still plays an integral part in purchase decisions. And from a marketer’s point of view, once a consumer walks through the door, especially in the case of QSRs, they are very close to purchase. Reimagining the retail experience to draw consumers in-store and providing as seamless of a shopping experience to online is essential in keeping customers returning through your doors. This is exactly what brands like McDonald’s, Wendy’s, and Taco Bell are doing with their modernized interiors and tech enhancements like mobile ordering.
On the retail front, one creative reimagining of the retail experience that builds on this idea is the showroom model, which allows customers to browse products in a physical location — upon purchasing, products are then shipped directly to their home. Examples of brands leveraging this model are Bonobos and Modcloth. A showroom model also provides retailers with the opportunity to save space on inventory — given the need to have only a few products in different styles and colors on display.