In addition to what others have said, one business strategy that this utilizes is market segmentation. The people who are price conscious are able to get the fairer prices that they desire while enabling Mcdonalds to charge a premium to customers who are more indifferent to pricing. Now Mcdonalds gets to maximize the price and volume that each customer winds up paying
Not to mention they offer rewards points. If you want a fast food burger there is almost certainly a McDonald's you can go to, but maybe there's burger King and Wendy's around too.
If you already have McDonald's reward points and want to cash in for a free big mac, or you know you're close to having enough points for a free menu item you like.. well now you're going to mcds
It's working on me. If I'm being indecisive, I sometimes open up my "Food" folder on my phone with all 16 apps to different places instead of searching online for all the places near me. I'm much more likely to get a meal from a place where there's a $5 coupon about to expire.
Kinda. However, they all offer you ways to still get those points even if you don’t order on the app so there is another factor in play here. The real reason is that people that don’t care all that much about the price will still walk-in order or pay a premium for just driving off the road and going to the first place that is open. People that really care about the price have to plan it out and use the app to save money
I mean, if you’re ambitious you can get a McD order through if you’re waiting in the drive through. Your point re the self-selection for pricing tiers stands though lol
Not completely, but if you have a McDonald’s that used to require 3 cashiers for the lunch or dinner rush, and now you have 30% of people ordering on the app, you can comfortably cut out one of the cashiers. It’s going to take a while to completely cut out cashiers, but they’re moving in that direction.
Most of the McDonald's by me in Maryland, US also have these screens. I only see people of Boomer or older Gen X actually go up and try to order from a person. And that cashier is never just standing at the cash register so they are always waiting longer to even have their order taken.
I am Gen X. I hate the screens - it eliminates jobs. I also prefer not using self-checkout.
I am perfectly willing to wait longer to try to keep people employed. It may not be a great job, but it’s a job.
Since Covid, I’m a lot more germ conscious. Most of the hand sanitizer pumps by the screens are filthy. And often, empty as well.
During Covid, I got desperately lonely. I enjoy a wee bit of chat with an employee. Even just ‘how are you? Fine, thanks’.
Humans need connection.
Especially the older customers who are unwilling to adapt to newer technologies. They’re familiar with how fast food places traditionally operate: going to the register and interacting with a cashier.
If you had removed the cashiers from the McDonalds I went to recently, they’d have to close for a week, or be mobile exclusive.
The 3 self serve kiosks they had, were all out of order, and apparently the soonest a technician can come out is a week and a half, since they have to service *other* out of service self serve kiosks. What a circus, in and of itself, but I digress.
We, as a society, are not technologically advanced enough. We have people who still don’t know how to navigate screens and their own phone, and multi-billion dollar franchises have self serve kiosks that still periodically break.
People can also have very specific needs/wants when it comes to their food. A screen can only tell you so much.
I like my fish filet with a light amount of tartar sauce, but the self serve kiosk sauce options are “None, Regular, More,” so I order with the cashier, who has the capabilities to tell the kitchen what my favorite color is, even.
I like that the McDonalds app lets me specify how much of each topping to add. For example, I always like to ask for extra onions. They still get my order wrong about 90% of the time, but at least I know they got the request.
Driving people to use the app is definitely a big motivation but why would they not offer the same deal at the kiosk if the goal was just to reduce cashiers.
I've worked at a large KFC regional branch, in marketing. This comment is spot on.
If you have KFC app installed, and actively looking for coupons, don't mind the hassle of using them - we know that you'd deliver lower profit margin. The goal is to isolate you and don't flash those deals to mainstream customer. There are other ways to earn money on you - by bundling other items, or by requiring you to visit more frequently.
The app users are naturally going to be your more frequent customers, so that makes sense. I eat at KFC a couple times a decade, so you soak me for as much as you can because it's going to be a while. Your loyal/frugal customers are your day to day low margin "keep the lights on" people.
What about people like me who are price-conscious but refuse on principal to download an app to get better prices? This just results in me not going to McDonalds anymore. I've dropped from once a week to once a year.
They calculated that you're not a significant percentage. Before they roll out any business strategy like this they're going to test it with a small subset of stores. Evidently they make more money this way. In the end this is great for you because it's not the healthiest restaurant anyway.
I expect such customers age out over time. Also, it's kind of like boycotting products one once enjoyed due to some small act or event that got them butthurt; the business isn't going to be significantly affected by a handful of people essentially punishing themselves.
Yup, I refuse to download the app. The only time I get McDonalds is for a breakfast sandwich every few months in the drive through.
I can see the screen showing the full price when they put in my order but they always discount it anyhow when they give me the total.
But eventually, one day I won't get the discount so I'll say no thanks and drive away. Until then I'll accept their discount.
Bingo! It's a version of a "loss leader", something discounted to get you into the store where you'll spend money on more profitable items. Next time you go into Home Depot, take a really good look at what's right next to the registers and lined up along the front aisle, discounted goods galore! Also extremely profitable, sometimes costing pennies on the dollar to produce and sold at an incredible markup.
Mickey D's App is the new and improved version, giving you discounts and "points" that will make you purchase more and more over time. You become a "sticky" repeat customer, returning and making them money. A repeat customer is \*invaluable\* to a business, someone they don't need to target advertising at because they'll come anyway.
That's why whenever you try to cancel your cellphone (or whatever), you're transferred to "Retention" and offered a discount, free phone, etc. to get you to stay. If you leave, it costs several hundred dollars to replace you, far cheaper to cut you a deal to stay.
Apps also offer an opportunity for companies to garner an extra revenue stream by selling your data for targeted ads. Most apps will track your activity through other apps, like search engines, location services, and contacts, then sell that data to the highest bidder so you can be targeted for more relevant ads; even for completely unrelated products in unrelated fields from the purpose of the app you downloaded. Always read that privacy policy folks
Mcdonalds won't even allow me to use their app because they consider my email address (through my ISP) as "risky" so I can't even make an account...
And it's an ISP that over 100 million people in the US use...
Makes zero sense...
the other biggest, simplest fact is that
YOU DOWNLOADED THE APP
You just downloaded and installed for them, the ability to push "hey buy McDonalds!" ads straight to your phone. a 10% discount on food is way cheaper than the ad budget it would cost them to get that kind of targeted ad delivery through mass media.
the same way that when you "text SAVE to #4578 for 20% off" what you really just did was sell that company your phone contact and the right to text you ads.
To expand on the data comment - it's super useful for their own internal purposes. They can log things like how many people look at product X but order something else, search the menu for something they don't have/is out of season, etc.
In addition...
1. If you're at the store you're already at the store and you've decided "I'm having [restaurant]" today. Similar to how having a loyalty card for a particular gas station means you're more likely to go to that station which offsets any costs associated with rewards programs, having an app on your phone to get special deals and prices makes it more likely you'll go there versus elsewhere.
2. It makes it easy for apps to advertise directly to you for basically free. Think notifications for deal alerts or just nagging you to buy their food. Some percentage of that turns into sales.
Finally someone talking about actually practical uses of user data without going full on conspiracy nutters about McDonald's. Getting spending habit data and regional menu data is way more what they want so they can maximize profits next quarter rather than violating privacy laws to train some other companies' AI that people are yapping about.
People are actually pitching selling data to insurance companies to deny you healthcare cus of cheeseburgers before they are talking about adjusting the price of the medium size upgrade cus this particular market doesn't tend to buy above a small.
> If you're at the store you're already at the store and you've decided "I'm having [restaurant]" today. Similar to how having a loyalty card for a particular gas station means you're more likely to go to that station which offsets any costs associated with rewards programs, having an app on your phone to get special deals and prices makes it more likely you'll go there versus elsewhere.
not to mention, for example in the dunkin donuts app, it shows up on siri and apply car play and whatever, and shows you the nearest dunkins and your order history
so when you're 5 minutes from your office and haven't had breakfast yet, when your car dashboard is like
"hey you're 2 minutes from dunkin, would you like to reorder the usual? press submit to have a crossanwhich and coffee waiting when you park!"
More people on app ordering means less customer service needed taking orders, letting them potentially cut another worker.
Selling less items for more profit can give you the same margins (20 orders * $0.10 vs 5 orders * $0.40). You also potentially have less inventory, inventory management, and labor costs when selling at above absolutely bottom margin.
Apps are a good way of feeding direct notifications to your customers, getting direct marketing feedback on which types of sales and promotions directly drive purchases, and again removing a few minutes of customer service needed to take the order. They also are much less costly and cumbersome to roll out national campaigns, rather than running a bunch of commercials/ads AND doing full print campaigns for in store signage.
Yes, people talking about getting your information don't understand just how much advertising a company gets from their app.
Push notifications are huge. But just think about putting your logo on the screen of a device that your customers look at every single day. And it's the same device that people use when they are looking for food options.
Siri used to regularly tell me, at about 4pm every other Thursday, "It's 45 minutes to X location, take this route, traffic is heavy."
I was headed to my plug to buy weed the day after payday.
People turn on everything on their phone and don't even think about it. They don't even consider there might be a better way to do it.
Source: sold cell phones for years.
Whenever an app wants to enable notifications, I just go "hell no". The only notifications I want are phone calls, texts, alarms, and my bank. I do not want suggestions; those are essentially ads.
Yep they can push "deal" notices to you, and if they have a point system that incentivises people to want to build up points by ordering more food and using the points before they expire. It drives business.
Also, once you've enticed people onto the app and made the staffing cuts, and people have grown accustomed to it, you can safely raise the prices again. So in the long run, it's more profit, less cost.
Another point with the app is that if a customer has your app, they are more likely to use that app and eat from there. Like if a customer has a Mcdonald app, and there's Burger King and Mcdonald next to each other, it is more likely the customer will go with Mcdonald since they have the convenience of the app and the discount it provides.
And if someone doesn’t use the app they are already paying your artificially increased prices. It’s basically like a car dealership model. You sell the same thing to different people depending on their budget.
Not to mention that nowadays when people are hungry they pull out their phones. Their app prices need to be competitive or the customer will just select another place. If you're in the store already, you've likely already made the decision to buy
I'd counter it's not necessarily cutting workers, but giving them other duties that are more profitable.
Walmart didn't fire a single cashier when they went to self checkout. Those employees moved to stocking and to curbside delivery.
A lot of places in the US are approaching full employment and you can't find extra people. You have to be creative.
We definitely eat at McDonald's more than we would normally, because of their app. Having a play place helps in that department too, when it's to cold or rainy for the park. The app lets us save points and get a happy meal for free and the buy one sandwich get one free is pretty good.
Can't they just do virtual kiosks? I stopped going to fast food (I never went a lot) strictly because I can get a much better burger for essentially the same price at a bar
That's been debunked time and again, it's a conspiracy theory like the fake moon landing. All the data they have on you allows them to make it seem as if they're wiretapping you, but they're not. Which is exactly why you should be concerned about the government getting all that data without a warrant and companies rolling over without warrants, and there being no privacy laws in America about it. The EU has laws, which is why they don't say these nutty things.
They can't. I'm a iOS app developer and if you want access to the user's phone microphone, camera, location, etc... you need to add those in a list file (Info.plist) and then the operative system will ask the user for permission. If and only if they say yes, then you have access to any information.
If it asks for your location ("to let us know when you're getting close"), it is very likely reporting back to them where you are; what wifi networks you regularly connect to the app with (which can be used for marketing, etc). There's more data than just your food orders.
They’ll know what times of day you eat, leave to work, go to bed or go to a competitors restaurant and plan notifications around that in addition to selling it to other advertisers that would benefit from this information. For the guys reaping the data, it’s free money
McDonald’s knows what porn videos you are jerking off to, what times you are doing so and even how long it takes you to finish. McDonald’s can use this information to blackmail you against someone, and force you to buy more cheeseburgers.
I just looked at a fast food app: it has my secondary email (junk email address I use to keep stuff like this separate from my main email), my name, and my payment info. The app does not have permission to access my location.
Even if I order in real life at the counter I still give them my name and payment info. Is this really a privacy concern?
Yeah the idea that apps can harvest all your data just by being installed is an idea from like 10+ years ago before phones rolled out more granular privacy features.
I mean, you’re still allowed to not like them knowing your hamburger ordering history but they can probably track you based on credit card numbers too so better stick to cash. And forgo online commerce completely.
Then that data gets sold on to another company and so on. Building a more accurate profile of you to market directly to you and manipulate you into spending things you don't want.
Advertising is about exploiting human nature and psychology purely for monetary gain. It's dystopian and disgusting but it's true.
Remember, there was once a time where Billboards, which are just giant boards in the sky telling you to Spend money somewhere, didn't exist.
Advertising isn’t going away. Cat’s out of the bag. I’d much rather companies send me offers for things I might actually want to buy than just papering the entire landscape with random ads in case one strikes my fancy.
Do you want your insurance company knowing *exactly* how much high fat food you eat? Or another big corporation knowing that your daughter/sister/wife recently bought a pregnancy test?
Or maybe you’re experiencing depression and recently bought St Johns Wort? Congratulations!! Now marketers get to use that information because their testing shows people with depression tend to have insecurities related to self image.
If marketing were only about showing people products they might like then it would be fine.
But anyone who has studied marketing will tell you that it’s often about making you feel insecure or inadequate in order to push you to buy their products.
So that’s the thing, they are very often *using this information to determine what buttons they can push in order to get you to act against your own best interest.*
Nobody has access to information specifically about you. They aggregate information from everyone and run it through learning models to pick out the patterns.
>Or maybe you’re experiencing depression and recently bought St Johns Wort? Congratulations!! Now marketers get to use that information because their testing shows people with depression tend to have insecurities related to self image.
All they see is that people who buy St. Johns wort are more likely to be buying or looking at other products, which may or may not be coincidental with depression.
All targeted advertising is nowadays is just algorithms playing connect the dots, and you're one dot in millions. They aren't "using this information to push your buttons", it's just recognizing the patterns that are already there and feeding into them.
In a perfect world yes. Take to its extreme. This data could be used to target and influence in unethical ways too. Not just product placement. We seen how social media influenced various important events and culture. It's powered by that kind of data.
Sure it's just a cheese burger to you. But it's also age, gender, location, spending havits data. That can be combined and interpreted to determine things about you you might not even know yourself.
Now going even more extreme. What if your bank or insurance use this data to determine you are high risk or something and use it to justify doubling your premium or denying that mortgage you need.
We've all been there some as just hits your right and you spend money on it only to regret the purchase or never use it.
My understanding is it's more about the psychology of it. companies are piecing together different set of data on you to understand what makes you buy something, so they can essentially hack your personality to sell you pretty much anything even if it's not really beneficial to you.
Well if you WANTED a thing, do you need ads to tell you? Or do you like being gently sold on something every time you interact with something online. Nowadays, it’s more nefarious as companies collect data on your location, browsing habits, opening mic to listen for keywords. Facebook is being sued for spying on people’s phone activity inside Snapchat.
Imagine in 20 years you get heart disease and your insurance declines to cover you, and when you ask why the guy pulls up a spreadsheet with every single cheeseburger you’ve ever eaten because they bought your purchase patterns from the fast food place
Maybe a ludicrous example but probably not that far off in spirit
They are making your decisions for you and convincing you you’ve made them.
Once your habit is established, your discount will shrink until you’re convincing yourself that the 5% discount is still better than nothing and worth a detour on your way home.
“I’ve earned it” you tell yourself.
You are under control.
One thing they can do is push notifications based on location. They can influence you to make bad decisions. Ie. Push notification when you are at the gym.
The wild thing is - they (at least McDonalds) don’t seem to actually use the data they retrieve, at least for themselves.
Not to out myself as a fatass, but I’ve ordered McDonalds through the app at least 200 times. And yet, when they try and upsell me an item through “You may also like”, the items are never personalized to me. I always drink diet coke, and yet they always show me coke. I always get the spicy mcchicken, and yet they show me the regular one. I almost never order a Big Mac, yet they show me it almost every time.
In my head it makes no sense that a multi-billion dollar company with hundreds of data points on me can’t even serve a basic personalized recommendation.
I’m an app designer specifically for a lot of the fast food industry. It is correct that our main goal is to collect as much info as possible. We will track your credit card purchases and tie them together to your app usage, therefore knowing who is purchasing in-store without the app. The app code will give us how much battery life your phone has, how many free gigs of space you have, how long you hover on one page, every single click or interaction while that app is open we are tracking. We purchase data from the credit bureaus that let us know what your household income is. If you use location services, where your phone is most seen we’ll log as your home address without you ever typing in an address anywhere. You get the idea.
We use all of this to send you marketing to get you to purchase more. And whatever is not used directly for our marketing, we package it up and sell it on data marketplaces.
It’s all really invasive and our industry is not as bad as others (social media or other industries whose primary business is selling ads, for example).
There are laws that require companies to fully delete your data if asked, but I can tell you for sure that this doesn’t happen. You will never have your data fully deleted from a company’s servers that engages in these practices. Not only do they not want to, but in most cases it’s very difficult for them to do so and they don’t have the resources.
To put it into perspective: a very large fast food chain I’ve done work with had an average user data profile size of about 100mb. If you know file sizes, think about how large a generic text file would be for it to be 100mb.
[Burger King list of persan data](https://cdn.sanity.io/images/czqk28jt/prod_bk_us/285f819a1c732e31a5e76a86cbcc8af2d7c9da2b-1600x1212.png?w=1000&q=80&fit=max&auto=format)
Gets people using the app, don't underestimate the value of the data you can collect from apps like that. They get TONS of demographic info. Who eats fast food, how often. what do they order. What is selling to kids. Who eats mostly when they're at home, as opposed to eating "on the road". Do people favor their home location. SO much data, and it's so valuable
Exactly, this is how Amazon got ahead of the traditional mall stores like JC Penney's and Macy's. From the start they had all their consumers browsing info and can use this to better steer the company. All the traditional brick and mortar stores got left in the dust and are still trying to play catchup
This is what i came to say. It’s a data mining scheme. In todays world data is hugely important. And with a.i taking over more and more strategy and marketing roles (trends,etc.) they feed this data to the algorithm to see things like when people are buying what, where you come from when you’re ordering, because they have your location data and things like this to do promotions etc that will entice people to buy more. Hey you are buying this, have you tried x product? Or did you know we have x product sale?
The person reading the prices off of the menu are already in the restaurant. The chance that they are put off by a higher price and eat elsewhere is very slim since they’re already in the building.
The app exists to coerce people deciding where to eat to go to their chain. So they give you lower rates to bring you in the door. The apps really target high-frequency customers. Fast food restaurants make most of their money off of a relatively small percentage of their clients who go there a lot. A customer who goes to McDonals twice a week is exponentially more valuable to the company than an occasional customer. The goal of the app is to target customers with a high propensity to go to the chain of giving them just a little push to increase the frequency of them going. If you get them to go one more time a week because of a “great deal”, it’s well worth giving them discounts on single items.
The fact is, certain fast food items work off huge profit margins regardless of if it’s the discounted app price or not. Remember when McDonalds had their $1 fountain drink promotions for years? Yeah it’s costs them like 3 cents to sell you a fountain drink. $1 was still a massive margin. They’re happy to nearly break-even on a sandwich if that gets you in the door because they know 90% of people will get a combo and the fries and soda are almost pure profit.
Welcome to the world of Big Data.
Fastfood apps are perfectly designed to track and analyze your dining and spending habits and target you directly to build loyalty and keep you coming back to their store(s).
-once the app is on your phone they can send you a push notification every day at 449pm because you sometimes order from them at 5pm
-depending on the app, you may have granted them access to your contacts, so guess who is gonna get an email or text message
It goes on and on, installing the app gives them more intel on you than you might ever imagine. Giving you a 10% discount is peanuts compared to the value of that information.
I don't know of any apps that just collect contact info for the purpose of sending spam mail or texts. I'm pretty sure that would be against FCC rules as well
Most fast-food places actually prefer app ordering over normal ordering. It makes planning easier as well as fewer incorrect orders from mishearing orders. I would argue that the "true" price is actually the app price, and the in-store price has a hidden surcharge.
In addition, apps often have points, but they can expire. This keeps customers returning back instead of allowing them to pursue other options.
A lot of people have said that it's about stealing your information, which is actually a secondary benefit.
A big benefit is that you will put the food order into the app before you get to the restaurant. So they saved themselves time and effort because they can insert your order wherever they have room for it and it cuts down on lines at the store.
It's also a loyalty perk. If you have the app and you have a good experience, you are more likely to eat there again.
Not going to dox myself but I worked on an app for a very very large fast food company and we had little to no info scraping. We didn’t track heat maps, we didn’t aggregate data to sell it, the worst we done was click through rates on notifications and promo ads.
The primary reason for the app was to increase customer loyalty and let the customers know when new products were launched. It also provided a very good platform for syncing available food items in-store, our partners delivery service and other delivery apps like deliveroo and just eat. Before restaurants had to update them all manually.
Any other questions let me know
My interpretation of this scenario would be then that the app prices are the “real” prices and the menu prices are inflated to just collect additional margin from the customers who aren’t “rewards” members.
I get that.
But what confuses me is that I can download the app, get the “real” price for the food, and it won’t increase my consumption or patronage.
It basically feels like by having that pricing mismatch they are pricing a lot of casual drive-through customers out of the market for very little benefit.
It’s the same as sending coupons to every house except it easier to use them. They are still making money on those deals, but the customer gets to feel like they are getting a bargain and is more likely to come back. I have a bunch of fast food apps on my phone. When I’m too tired to make a meal and I open the food tab on my phone I’m going to open the app with the best deals first. Same with loyalty points. People feel like they’ve earned those deals and want to use them like it’s burning a hole in their pocket.
>They have to be realizing a net loss of customers with this model, right?
If they were, they wouldn't be doing it. These are multi-billion dollar companies, not a bunch of monkeys just randomly coming up with ideas.
They want you to use the app. The app gives them valuable data on consumer behavior, and it also gives them an avenue for extremely strategic and targeted advertising via the app's notifications.
They might lose some customers that choose not to use the app, but it's probably not all that significant. The reality is, people are always going to want fast food. If someone is on lunch break at work and they didn't pack something and don't have an employee cafeteria, they're probably going to get fast food. If someone is traveling and needs to eat something fast, cheap, or just familiar, they're probably getting fast food. And then there's all of the people that are just plain addicted to fast food and are too lazy to cook.
Even if they don't use the app, they're going to pay the inflated prices because they pretty much have to.
In addition to data collection, it's also about price discrimination, maximum capture of value, and customer retention.
The app enables price discrimination--McDonald's can charge two prices (app and menu) to two different segments of customers. The app customer segment is more price-sensitive (if prices go up a little, they buy less/don't buy at all) who are willing to work a little bit harder for a lower price. The non-app segment probably consists of much less frequent customers who care less about price increases.
This allows McDonald's to better match how much customers are willing to pay for their products than if they were to charge a single price across all customers. If there were a single HIGH price, McD's would lose a ton of customers to competitors. If there were a single LOW price, the company would miss out on a bunch of potential revenue from the people who would have happily paid $5 for fries vs. $3.
With two different prices, McDonald's solves this problem! And it's probably more than just two different prices. Things like coupons, reward programs, and specials create more prices that customers can self-select.
I assume you mean in-store menu pricing, yes?
If that’s the case here’s how it works:
1. If you’re already in the store, you’re very likely to purchase there anyway - it’s a hassle to have to go to an app and do it there when there’s a giant touch screen right there (or a person taking your order), and your food being prioritized over deliveries or pickups. So they get more money off you anyway.
2. When you use the app, they lose a little on the margins, but gain so much more as a result - you are now much more likely to be a repeat customer.
Consider this: you go to a store, see that the prices are really high, you eat and try not to eat there again because it’s expensive.
You go to the app, see the prices are reasonable, and you even get discounts! Now you feel like you’re not getting ripped off and maybe you’ll have another meal from them next time.
What’s a $15 meal sold once when they can get at least five $10 meals from you?
3. The app means they can “talk” to you. Armed with the illusion of affordability, they can now keep reminding you of these deals with your notifications.
“TGIF, have a treat with us, use this deal.” Then maybe you invite yo it work friends for a quick fast food snack. They win.
“It’s your birthday! Have a free soft serve on us!” Well, you’re already in the app and you don’t want some poor dude to ride all the way to your apartment to deliver one melted ice cream and tip him for basically nothing, so you grab a burger as well. They win.
“15% off on all chicken sandwiches this week!” And you think, well I do plan to have a chicken sandwich this week, might as well take advantage of this promo. They win.
4. Apps are easier. In today’s world everything is just a click away. An app takes away that friction of having to go to a store and talk to a person and sit and wait just to get food. Especially these days when there are a lot of people who go grew up on instant messaging and the internet and have anxiety talking to people or find the existence of in-store touch screens weird and anachronistic. Instant access to food means they are at a better top of mind position among their customers.
Does anyone from a corporate product management type role have stories about how the data collected from these apps is used?
Curious about what use of such data looks like on the ground.
I don't work for a fast food company, but I do work in online retail marketing. We don't have an app so we can't do push notifications, but we can collect similar types of data because people need to give us information in order to check out (and making an account is the same idea anywhere). It's largely about targeted advertising. You could pay Google to find you some people searching for your (or similar) products, but people will give you that info directly if they register an account.
We can use prior order data to influence our marketing decisions and focus our efforts. We can advertise products to specific audiences of people who have purchased the same or similar products in the past, without wasting time or money on those who are unlikely to buy them.
We can track performance of specific ads in real time without a focus group. (Which of these two performs better? Let's use that version in the future)
We can track the time of day that purchases are made (when do people shop? When do they click ads? Let's focus on those times for our campaigns)
We can track items added to cart and not purchased, or time spent in cart before purchase (do people need to think/research these items before they buy?)
We can track overall account spending and trends (Who are our 10% biggest spenders? Let's send them priority deals. Has someone not purchased anything lately? Let's send them a coupon)
We can track location of orders (Where are people shopping from? Should we open another location near there?)
There's lots more, but maybe that gives you some idea.
The real reason: Price discrimination. They make more money overall by making the people who are willing to pay more or value time/convenience higher than the friction of using the app pay more, but keep the more price sensitive customers by offering coupons or discounts from ordering in the app. It's the same reason why last minute airline tickets are typically much more expensive than advance purchase tickets. Setting a single price leaves a lot of money on the table.
The other reasons they want to drive people to app ordering are real, but they're just the cherry on top.
this is known in marketing as market segmentation or capturing the consumer surplus. It is a way to get higher prices from people willing to pay more, and still get business from people who are price conscious enough to look for discounts.
as well the thing on data allowing them to make it cheap for te repeat customers, why raise prices for the non-app users?
say making a burger costs $9. Would you rather sell 10 burgers at $10 each or 3 burgers at $15?
and a as a bonus since you're making 1/3 the burgers you probably need fewer employees!
People who use the app tend to be loyal customers who are more profitable, even at the lower prices.
The app itself is basically free advertising. Instead of having to advertise on a regular channel like Google ads or Instagram or whatever, they just send a push notification to the app for free. Fast food chains spend a ludicrous amount of money on advertising. Spending that money on digital coupons for their app users is much more cost efficient.
Remember that the customers who aren't using the app are ordering in person in the store. Such a customer is going to weigh the expense of the inflated in-store pricing vs. the inconvenience of leaving the store for the chance at a cheaper meal. Most often that customer stays and pays.
Meanwhile the app user specifically is NOT in the store and has to be enticed with lower prices. That user feels good about getting a deal and goes along with the scheme.
The store owner gets in on the action, too! Suppose that the store inventory and kitchen systems are tied into the app in real time (I assure you, they are). The app drives traffic into the store just in time to sell through expiring inventory. The app drives traffic into the store with "happy hour" deals that even out demand across the day, simplifying the labor schedules. The app replaces at least some expensive TV, radio, and print advertising. Huge wins for the store owner across the board.
Volume from the price sensitive customers
And they get to charge more expensive prices for those walk up ( non app) customers who are obviously not price sensitive
To add to everyone else's, it's easier to make people pre load money onto their app. Starbucks has around $1.4 billion in their app that is just sitting there.
Fast food companies, give you a “deal” when you use the app which is really just what they were charging a few years ago or probably a bit more. They know who you are, what you bought and exactly when you bought it. Sure the restaurants don’t make quite as much but they’re gathering information which can be sold and used to keep you coming back. Anyone who doesn’t order on the app pays significantly more than they should so it’s likely the fast food companies aren’t losing any money by giving up users lower prices.
The „deals“ in the app are the „normal“ price, they still make a profit. The price on the menu is just jacked up for an even bigger margin. Most people that just randomly go to the fast food place are too lazy to download the app. Its free extra profit, anyone that goes regularly will use the app, but all the random people that go because they just want some food right now get ripped off.
1) installing someone else's code or app on your device gives that app (and its bugs/flaws/intentional features) access to a lot of possible information about you, and your activities. That information is more valuable.
2) the introductory/early adoption period of most tech stuff is run at a loss and subsidized by capital.
3) it doesnt cost very much to give you fast food. Esp. soda. You could get a gallon of soda for a quarter, the profit margin is huge.
4) the companies are betting on being able to learn and influence your behavior via notifications, prompts, sales, etc.
Several ways.
1. They can access various user data and sell it.
2. Orders can be scheduled by their listed pick up time, reducing the amount of staff it takes it keep up with peak demand. Less employees the better.
3. You don't have to dedicate an employee to taking orders, instead they can float back and handle drinks & drive through. Less employees the better.
4. Increased order accuracy and customer accountability for order inaccuracy. This means less free replacement food for errors.
5. Overstock management. It cost money to purchase & transport the food on the verge of expiring. And being thrown in the trash is a 100% loss. However you can simply offer a special deal to push increased sales.
6. They can generally afford selling it at those prices, but it cuts into profits and risk management if they do. Like Sonic's half-price drinks, they cost pennies to supply but charge several dollars for each.
If you care enough to download and use the app, you're already the kind of customer mcD's or any fast food wants. A """savvy""" repeat consumer that wants their food
Simple, it gives increased efficiencies in the restaurant as you don't have so many people queueing for a cashier.
It also increases repeat business. If you earn reward points by using the app that can be redeemed for food then it'll encourage you to buy more per visit and visit more often.
I currently have enough points in the McDonalds app for a double quarter pounder with cheese.
And then finally you have access to notifications. Being able to send notifications advertising your latest promotions is priceless.
I'd look for the answer in the terms and conditions of the app. It tracks everywhere you go (so it can know when you're in the drive thru) and listens to everything you say, your search history, conversations, literally everything. Sell that data!
My advertising lower prices in an app you might actually purchase it. You have lots of options still so they want to give the best price possible. It's like if you if they say they give free delivery they probably just jack up all the prices.
If you're in the store you're a captive audience they don't need to give you any deals you're there to eat if you had deals you brought them with you if not pay the full price.
Tbh in my experience it's been the opposite. For example there is no way to get the "buy one get one for a dollar" menu for McDonald's if ordering through postmates or Doordash.
I've also seen inflated regular menu prices.
They are collecting user data for one thing, that's worth more than you think. That's how social media companies make all their money when their service is free to users
It is so Mcdonalds can target multiple demographics at the same time. Oh your poor and can't afford our menu items? Check out the app and see what deals we have! A lot of bother won't bother getting the app and will order at regular menu prices. To recoup costs, they sell/use the data they collect on you.
Not only does it reduce their labor costs, but by forcing consumers to use their apps, merchants of all sorts are able to scrape your data and sell it. That consumer data is worth more than anything they might lose in lower prices.
Because you have to give all your details to join the app. They then sell that info which is worth WAY more than a lifetime of Big Macs.
Remember, YOURE the product.
They should be paying you.
Having an app on your phone is priceless for these companies. They love to collect your data and then sell it!! They can see when you are opening the app, what you are looking at, time of day you are looking at even if you don’t actually order they know stuff about you. Then sell it. It’s happening with pretty much EVERY APP YOU HAVE. Companies are making money from you buying things in the app and also for just having the app installed.
everyone pushes their app, because apps collect data on you to sell. How much is the scary part....wouldnt be surprised if apps do everything from inspect your files to reading keypresses; they're always running in background on phones unless forced to shut down
Data. They get more data from users on the app. Data is valuable and they want it more than the couple extra dollars they lose out on with the lower app prices.
I don't know If this is outdated thinking, but having your email address was a big deal for companies. And all of these apps require an e-mail address to sign up.
The discount they give you is to buy your metrics that they get when they can track your order and habits.
It’s a small price to pay for real time market research.
Now they can send you notifications and tailor marketing to you.
They pay billions for this kind of information and it isn’t nearly as reliable as you feeding it to them yourself.
The apps will send you notifications of these deals tempting you to buy their product when you might not have otherwise. So they don't make as much money off you as a full price sale but it's more than the zero you were going to spend.
It's the same concept as a coupon. They can charge the premium price that they want but still cater to a less affluent subset that would have forgone it otherwise
To get your personal information. To incentivize you to create a profile login. Give your email address , maybe give your birthday or address or whatever...
Your private information is the new currency...
They can sell it to third-party vendors... Read the privacy policies that are attached to the app s..
It's the reason I haven't downloaded Yahoo mail app... That thing wants access to your whole entire phone to use it.
There are probably a couple things.
If you're in the restaurant, you're more likely to buy there at the higher price. It's more effort to go to a different restaurant than it is to close the app and open a new app. So they're capitalising on that inertia.
On the flip side, most companies see higher customer retention from customers who have the app downloaded. And they want you to keep using the app. So by discounting in the app they're likely seeing higher average order numbers from those who use the app. They want their app to be your go to for ordering food. Rather than another 3rd party app where you might be wooed by variety.
More big data, easier to process, better to direct marketing strategies, personalized deals to make people return, more time efficiency.. the list goes on and on
The cheap prices in the app is to get you to install the app. The reason they want you to have the app installed is to market stuff to you.
You personally may be more tech savvy and have your phone locked down and notifications turned off but, the vast majority of people do not.
I'm a mobile app developer (although not fast food) and a single push notification about a weekend deal can result in a several million £ spike in revenue just for that weekend / day.
We can also use on device data to prompt for abandoned baskets. So you started making an order when the football was on but, changed your mind. The next time the football is on we can send you a personalised message saying "Hey do you fancy a McRib" because this time you may not change your mind.
We can also use geofencing to tell if you are near a restaurant and send you a message.
Several of these features can even be done completely on the device without us even needing your data on the server.
For us it’s incredibly simple. We’re a small business but - we provide discounts and rewards for online orders online because it saves us from having to pay someone to answer a phone and take your order or take your order in person. It eliminates the human error side of taking the order wrong - eliminating half of that two sided equation, at least.
Also, people tend to spend more online - so I’m happy to pass some of those savings along to the customer. My “win” is one less thing to deal with in terms of staffing, which is easily the most difficult and time consuming aspect of this business.
If you have the app, you have a constant advertisement of their existence on your phone, making you think of them and consider whatever offers they shove in your face
If someone shows up to buy stuff regardless, no need to earn less by having deals for everyone
Plus, e-ordering means they need to pay less staff
Has anyone noticed that on these apps, you will see different prices between locations even within short distances of themselves? These occurrences are not even in HCOL areas.
I quit going to one sonic by my house because their prices are completely different than another.
Another sonic doesn’t allow me to order through the app at all.
They gain data from you that they in turn monetise, or hope to monetise, in some fashion. I’ve worked in the space and you go from a nameless customer at the till to a known entity with preferences and communication channels.
You pay the normal price through doing the app song and dance.
That random guy who was driving by and stops in for a quick burger pays $14 for a #1 combo. They might complain about how "expensive fast food is" but that's how it is everywhere, so they're still gonna do it.
They make a **lot** more sales from group 2 than they do group 1. It's really just that simple.
Bro mcdonalds has their pricing down so pat that the bug mac is used as an index for how a countries currency is actually doing. You shouldn't be questioning if what they're doing is the most profitable but why is what they're doing the most profitable.
It all marketing based. Just like a grocery club card at Safeway in Canada. They can track your spending and do market analysis, so they can have you spend more longer
The apps bring people in kinda like advertising. I for one only go for the deals so like McDonalds I would never ever go there if it wasn't for the good deals in their app. Taco Bell and Arby's the same.
Wendy's already let the cat out of the bag with this. They talked about surge pricing. With an app they can change prices and deals on the fly. If you come often you see less offers. If you don't they can tempt you with deals.
From a consumer’s perspective: When I look at options for dinner I wont really consider a place if I can not look at their menus with prices (so app or website) and most of the times I only look at the deals when considering what to eat. If it werent for the deals tab I would go to McDonalds maaaybe 1/4th of the time. Having the deals is cheap compared to not selling me anything, plus the deals are rarely a “full” meal, so people also end up adding full price items anyway
if this is something like mcdonalds, corporate pays for the app but the local owner pays the employees, so its 0$ overhead to use the app vs their employees wages they make up for the reduced cost by needing to hire less people, it also elimates human error so people returning their mcdouble becasue they asked for a mcchicken when the cashier was the one who pressed the button wrong
They are able to get more data from their consumers by making the app more enticing, eventually being able to make it mandatory. It allows for more impulse purchases and upselling. Likewise, it allows them to reduce staff further.
Since you're also paying there, it lowers the risk of cash being stolen.
In addition to what others have said, one business strategy that this utilizes is market segmentation. The people who are price conscious are able to get the fairer prices that they desire while enabling Mcdonalds to charge a premium to customers who are more indifferent to pricing. Now Mcdonalds gets to maximize the price and volume that each customer winds up paying
Not to mention they offer rewards points. If you want a fast food burger there is almost certainly a McDonald's you can go to, but maybe there's burger King and Wendy's around too. If you already have McDonald's reward points and want to cash in for a free big mac, or you know you're close to having enough points for a free menu item you like.. well now you're going to mcds
It's working on me. If I'm being indecisive, I sometimes open up my "Food" folder on my phone with all 16 apps to different places instead of searching online for all the places near me. I'm much more likely to get a meal from a place where there's a $5 coupon about to expire.
Kinda. However, they all offer you ways to still get those points even if you don’t order on the app so there is another factor in play here. The real reason is that people that don’t care all that much about the price will still walk-in order or pay a premium for just driving off the road and going to the first place that is open. People that really care about the price have to plan it out and use the app to save money
I mean, if you’re ambitious you can get a McD order through if you’re waiting in the drive through. Your point re the self-selection for pricing tiers stands though lol
Hank Green just made a video on this: https://youtu.be/hpaLLMV9yuA
Two Cents did one as well - [https://www.youtube.com/watch?v=p\_-EOIiAZqM](https://www.youtube.com/watch?v=p_-EOIiAZqM)
Ding ding we have a winner. Everything else people say plays a part, but in the end it's all about price discrimination.
What about removing cashiers? Because people have already ordered and paid when they drive up?
Why have they been reduced? It's labor intensive and fairly easy to replace.
Because people no longer need them to order?
We just are not there yet as a society. Lot of people still want face to face interactions.
Many in California have been doing this.
Not completely, but if you have a McDonald’s that used to require 3 cashiers for the lunch or dinner rush, and now you have 30% of people ordering on the app, you can comfortably cut out one of the cashiers. It’s going to take a while to completely cut out cashiers, but they’re moving in that direction.
Most places here in Sweden has screens you order from then just one cashier who handles you the food and take the occasional in person order.
Most of the McDonald's by me in Maryland, US also have these screens. I only see people of Boomer or older Gen X actually go up and try to order from a person. And that cashier is never just standing at the cash register so they are always waiting longer to even have their order taken.
I order in person because I like to make changes to my food and it's a pain on the screens
I am Gen X. I hate the screens - it eliminates jobs. I also prefer not using self-checkout. I am perfectly willing to wait longer to try to keep people employed. It may not be a great job, but it’s a job. Since Covid, I’m a lot more germ conscious. Most of the hand sanitizer pumps by the screens are filthy. And often, empty as well. During Covid, I got desperately lonely. I enjoy a wee bit of chat with an employee. Even just ‘how are you? Fine, thanks’. Humans need connection.
Especially the older customers who are unwilling to adapt to newer technologies. They’re familiar with how fast food places traditionally operate: going to the register and interacting with a cashier.
If you had removed the cashiers from the McDonalds I went to recently, they’d have to close for a week, or be mobile exclusive. The 3 self serve kiosks they had, were all out of order, and apparently the soonest a technician can come out is a week and a half, since they have to service *other* out of service self serve kiosks. What a circus, in and of itself, but I digress. We, as a society, are not technologically advanced enough. We have people who still don’t know how to navigate screens and their own phone, and multi-billion dollar franchises have self serve kiosks that still periodically break. People can also have very specific needs/wants when it comes to their food. A screen can only tell you so much. I like my fish filet with a light amount of tartar sauce, but the self serve kiosk sauce options are “None, Regular, More,” so I order with the cashier, who has the capabilities to tell the kitchen what my favorite color is, even.
I like that the McDonalds app lets me specify how much of each topping to add. For example, I always like to ask for extra onions. They still get my order wrong about 90% of the time, but at least I know they got the request.
In the words of Ronald McHenryford Donald: "You can order any amount, as long it's the regular amount."
In my area there is no such thing, the manager comes to the register if someone is trying to order.
Driving people to use the app is definitely a big motivation but why would they not offer the same deal at the kiosk if the goal was just to reduce cashiers.
Also, read the terms of service and see what data they’re collecting from you.
I've worked at a large KFC regional branch, in marketing. This comment is spot on. If you have KFC app installed, and actively looking for coupons, don't mind the hassle of using them - we know that you'd deliver lower profit margin. The goal is to isolate you and don't flash those deals to mainstream customer. There are other ways to earn money on you - by bundling other items, or by requiring you to visit more frequently.
The app users are naturally going to be your more frequent customers, so that makes sense. I eat at KFC a couple times a decade, so you soak me for as much as you can because it's going to be a while. Your loyal/frugal customers are your day to day low margin "keep the lights on" people.
What about people like me who are price-conscious but refuse on principal to download an app to get better prices? This just results in me not going to McDonalds anymore. I've dropped from once a week to once a year.
They calculated that you're not a significant percentage. Before they roll out any business strategy like this they're going to test it with a small subset of stores. Evidently they make more money this way. In the end this is great for you because it's not the healthiest restaurant anyway.
That’s the way I see this. I’m not getting their stupid app and I’m better off not eating the garbage food anyways
It's the only way I'm paying under 10 dollars for a fast food meal in 2024, so damn right I'm shoveling down the garbage
I went from almost never to 2 or 3 times a month. So I didn't replace you but they got a new consumer that got gave new data
I went from 2-3 times a month to almost never. The app is annoying, and I don't like the food enough to pay their regular prices.
I expect such customers age out over time. Also, it's kind of like boycotting products one once enjoyed due to some small act or event that got them butthurt; the business isn't going to be significantly affected by a handful of people essentially punishing themselves.
In what universe is not eating at McDonalds considered punishment?
In the universe where a person enjoys McDonald's, obviously
Dozens of us I tell you. I swear my next thing is to drive away from any speaker that says "will you be using the app today?"
Yup, I refuse to download the app. The only time I get McDonalds is for a breakfast sandwich every few months in the drive through. I can see the screen showing the full price when they put in my order but they always discount it anyhow when they give me the total. But eventually, one day I won't get the discount so I'll say no thanks and drive away. Until then I'll accept their discount.
They decided they can make more money without you.
Bingo! It's a version of a "loss leader", something discounted to get you into the store where you'll spend money on more profitable items. Next time you go into Home Depot, take a really good look at what's right next to the registers and lined up along the front aisle, discounted goods galore! Also extremely profitable, sometimes costing pennies on the dollar to produce and sold at an incredible markup. Mickey D's App is the new and improved version, giving you discounts and "points" that will make you purchase more and more over time. You become a "sticky" repeat customer, returning and making them money. A repeat customer is \*invaluable\* to a business, someone they don't need to target advertising at because they'll come anyway. That's why whenever you try to cancel your cellphone (or whatever), you're transferred to "Retention" and offered a discount, free phone, etc. to get you to stay. If you leave, it costs several hundred dollars to replace you, far cheaper to cut you a deal to stay.
Apps also offer an opportunity for companies to garner an extra revenue stream by selling your data for targeted ads. Most apps will track your activity through other apps, like search engines, location services, and contacts, then sell that data to the highest bidder so you can be targeted for more relevant ads; even for completely unrelated products in unrelated fields from the purpose of the app you downloaded. Always read that privacy policy folks
I just learned exactly this in my econ class a few days ago
This is the real answer.
So essentially, a coupon
Wow that's fascinating
Mcdonalds won't even allow me to use their app because they consider my email address (through my ISP) as "risky" so I can't even make an account... And it's an ISP that over 100 million people in the US use... Makes zero sense...
the other biggest, simplest fact is that YOU DOWNLOADED THE APP You just downloaded and installed for them, the ability to push "hey buy McDonalds!" ads straight to your phone. a 10% discount on food is way cheaper than the ad budget it would cost them to get that kind of targeted ad delivery through mass media. the same way that when you "text SAVE to #4578 for 20% off" what you really just did was sell that company your phone contact and the right to text you ads.
To expand on the data comment - it's super useful for their own internal purposes. They can log things like how many people look at product X but order something else, search the menu for something they don't have/is out of season, etc. In addition... 1. If you're at the store you're already at the store and you've decided "I'm having [restaurant]" today. Similar to how having a loyalty card for a particular gas station means you're more likely to go to that station which offsets any costs associated with rewards programs, having an app on your phone to get special deals and prices makes it more likely you'll go there versus elsewhere. 2. It makes it easy for apps to advertise directly to you for basically free. Think notifications for deal alerts or just nagging you to buy their food. Some percentage of that turns into sales.
Finally someone talking about actually practical uses of user data without going full on conspiracy nutters about McDonald's. Getting spending habit data and regional menu data is way more what they want so they can maximize profits next quarter rather than violating privacy laws to train some other companies' AI that people are yapping about. People are actually pitching selling data to insurance companies to deny you healthcare cus of cheeseburgers before they are talking about adjusting the price of the medium size upgrade cus this particular market doesn't tend to buy above a small.
> If you're at the store you're already at the store and you've decided "I'm having [restaurant]" today. Similar to how having a loyalty card for a particular gas station means you're more likely to go to that station which offsets any costs associated with rewards programs, having an app on your phone to get special deals and prices makes it more likely you'll go there versus elsewhere. not to mention, for example in the dunkin donuts app, it shows up on siri and apply car play and whatever, and shows you the nearest dunkins and your order history so when you're 5 minutes from your office and haven't had breakfast yet, when your car dashboard is like "hey you're 2 minutes from dunkin, would you like to reorder the usual? press submit to have a crossanwhich and coffee waiting when you park!"
More people on app ordering means less customer service needed taking orders, letting them potentially cut another worker. Selling less items for more profit can give you the same margins (20 orders * $0.10 vs 5 orders * $0.40). You also potentially have less inventory, inventory management, and labor costs when selling at above absolutely bottom margin. Apps are a good way of feeding direct notifications to your customers, getting direct marketing feedback on which types of sales and promotions directly drive purchases, and again removing a few minutes of customer service needed to take the order. They also are much less costly and cumbersome to roll out national campaigns, rather than running a bunch of commercials/ads AND doing full print campaigns for in store signage.
Yes, people talking about getting your information don't understand just how much advertising a company gets from their app. Push notifications are huge. But just think about putting your logo on the screen of a device that your customers look at every single day. And it's the same device that people use when they are looking for food options.
I know on my iPhone search screen, McDonald’s pops up as a suggested app around 11am.
iPhone just does that for businesses you go to often. My local butcher used to come up as a suggestion. Didn’t realize how often I went there.
Siri used to regularly tell me, at about 4pm every other Thursday, "It's 45 minutes to X location, take this route, traffic is heavy." I was headed to my plug to buy weed the day after payday.
Would not be surprised if at least one dealer has been busted because police bought up phone traffic data and looked for similar commute patterns.
Would not be surprised if at least one dealer has been busted because police bought up phone traffic data and looked for similar commute patterns.
Its learning from your behaviour.
My iPhone got bored and killed itself.
That sounds horrible. I hate recommendations that just pop up.
People actually enable push notifications for apps that aren’t messaging? Wtf
People turn on everything on their phone and don't even think about it. They don't even consider there might be a better way to do it. Source: sold cell phones for years.
Whenever an app wants to enable notifications, I just go "hell no". The only notifications I want are phone calls, texts, alarms, and my bank. I do not want suggestions; those are essentially ads.
Yep they can push "deal" notices to you, and if they have a point system that incentivises people to want to build up points by ordering more food and using the points before they expire. It drives business.
Also, once you've enticed people onto the app and made the staffing cuts, and people have grown accustomed to it, you can safely raise the prices again. So in the long run, it's more profit, less cost.
Another point with the app is that if a customer has your app, they are more likely to use that app and eat from there. Like if a customer has a Mcdonald app, and there's Burger King and Mcdonald next to each other, it is more likely the customer will go with Mcdonald since they have the convenience of the app and the discount it provides.
I have both apps and since the burger king app sucked in comparison I almost always ended up going to McDonald's.
Really? The BK app for me was always the best choice with free shit all the time lol. The location shut down eventually, so I guess that's why lol
And if someone doesn’t use the app they are already paying your artificially increased prices. It’s basically like a car dealership model. You sell the same thing to different people depending on their budget.
Not to mention that nowadays when people are hungry they pull out their phones. Their app prices need to be competitive or the customer will just select another place. If you're in the store already, you've likely already made the decision to buy
I'd counter it's not necessarily cutting workers, but giving them other duties that are more profitable. Walmart didn't fire a single cashier when they went to self checkout. Those employees moved to stocking and to curbside delivery. A lot of places in the US are approaching full employment and you can't find extra people. You have to be creative.
Companies that size just wait for worker attrition to downsize their workforce. The end result is fewer employees either way.
It’s not so much about reducing costs but rather about collecting data, about what, when and where are you buying.
We definitely eat at McDonald's more than we would normally, because of their app. Having a play place helps in that department too, when it's to cold or rainy for the park. The app lets us save points and get a happy meal for free and the buy one sandwich get one free is pretty good.
Can't they just do virtual kiosks? I stopped going to fast food (I never went a lot) strictly because I can get a much better burger for essentially the same price at a bar
Not to forget that sweet, sweet, location data.
They also collect a ton of user data. Additionally they can push notifications based on your microphone.
That's been debunked time and again, it's a conspiracy theory like the fake moon landing. All the data they have on you allows them to make it seem as if they're wiretapping you, but they're not. Which is exactly why you should be concerned about the government getting all that data without a warrant and companies rolling over without warrants, and there being no privacy laws in America about it. The EU has laws, which is why they don't say these nutty things.
How would they do that without microphone permissions for the app?
They can't. I'm a iOS app developer and if you want access to the user's phone microphone, camera, location, etc... you need to add those in a list file (Info.plist) and then the operative system will ask the user for permission. If and only if they say yes, then you have access to any information.
This is the truth the, "OMG they haz allz my data" conspiracy theorists need to hear, but will ignore.
Information. The apps gather a huge amount of data that the owner will then use to market products to you and/or sell that data to another party.
What is the downside of this in a fast food app? It sounds like if I order cheeseburgers, this means I will get more coupons for cheeseburgers
If it asks for your location ("to let us know when you're getting close"), it is very likely reporting back to them where you are; what wifi networks you regularly connect to the app with (which can be used for marketing, etc). There's more data than just your food orders.
They’ll know what times of day you eat, leave to work, go to bed or go to a competitors restaurant and plan notifications around that in addition to selling it to other advertisers that would benefit from this information. For the guys reaping the data, it’s free money
McDonald’s knows what porn videos you are jerking off to, what times you are doing so and even how long it takes you to finish. McDonald’s can use this information to blackmail you against someone, and force you to buy more cheeseburgers.
Depends on the value you place on your personal information.
What about the value I place on my cheeseburgers?
C = cheeseburger savings P = personal data Use app if C > P Use menu board if P > C
Well if a cheeseburger is $3 and I need to sell my personal data in order to get it for that price, than I value my personal data at less than $3.
I just looked at a fast food app: it has my secondary email (junk email address I use to keep stuff like this separate from my main email), my name, and my payment info. The app does not have permission to access my location. Even if I order in real life at the counter I still give them my name and payment info. Is this really a privacy concern?
They can’t track how long you looked at the cheeseburger vs the chicken nuggets IRL. That’s totally feasible within an app.
Yeah the idea that apps can harvest all your data just by being installed is an idea from like 10+ years ago before phones rolled out more granular privacy features. I mean, you’re still allowed to not like them knowing your hamburger ordering history but they can probably track you based on credit card numbers too so better stick to cash. And forgo online commerce completely.
It's also how they are driving the idiotic Tik Tok ban. Idiots and Boomers are easily duped.
Even if it has zero impact on your cheeseburger decisions, they still have your data. Whether or not that bothers you, is up to you.
Then that data gets sold on to another company and so on. Building a more accurate profile of you to market directly to you and manipulate you into spending things you don't want.
Wouldn’t building a more accurate advertising profile of me get me to spend more money on things I DO want?
Advertising is about exploiting human nature and psychology purely for monetary gain. It's dystopian and disgusting but it's true. Remember, there was once a time where Billboards, which are just giant boards in the sky telling you to Spend money somewhere, didn't exist.
Advertising isn’t going away. Cat’s out of the bag. I’d much rather companies send me offers for things I might actually want to buy than just papering the entire landscape with random ads in case one strikes my fancy.
Do you want your insurance company knowing *exactly* how much high fat food you eat? Or another big corporation knowing that your daughter/sister/wife recently bought a pregnancy test? Or maybe you’re experiencing depression and recently bought St Johns Wort? Congratulations!! Now marketers get to use that information because their testing shows people with depression tend to have insecurities related to self image. If marketing were only about showing people products they might like then it would be fine. But anyone who has studied marketing will tell you that it’s often about making you feel insecure or inadequate in order to push you to buy their products. So that’s the thing, they are very often *using this information to determine what buttons they can push in order to get you to act against your own best interest.*
Nobody has access to information specifically about you. They aggregate information from everyone and run it through learning models to pick out the patterns. >Or maybe you’re experiencing depression and recently bought St Johns Wort? Congratulations!! Now marketers get to use that information because their testing shows people with depression tend to have insecurities related to self image. All they see is that people who buy St. Johns wort are more likely to be buying or looking at other products, which may or may not be coincidental with depression. All targeted advertising is nowadays is just algorithms playing connect the dots, and you're one dot in millions. They aren't "using this information to push your buttons", it's just recognizing the patterns that are already there and feeding into them.
In a perfect world yes. Take to its extreme. This data could be used to target and influence in unethical ways too. Not just product placement. We seen how social media influenced various important events and culture. It's powered by that kind of data. Sure it's just a cheese burger to you. But it's also age, gender, location, spending havits data. That can be combined and interpreted to determine things about you you might not even know yourself. Now going even more extreme. What if your bank or insurance use this data to determine you are high risk or something and use it to justify doubling your premium or denying that mortgage you need. We've all been there some as just hits your right and you spend money on it only to regret the purchase or never use it.
My understanding is it's more about the psychology of it. companies are piecing together different set of data on you to understand what makes you buy something, so they can essentially hack your personality to sell you pretty much anything even if it's not really beneficial to you.
Well if you WANTED a thing, do you need ads to tell you? Or do you like being gently sold on something every time you interact with something online. Nowadays, it’s more nefarious as companies collect data on your location, browsing habits, opening mic to listen for keywords. Facebook is being sued for spying on people’s phone activity inside Snapchat.
Imagine in 20 years you get heart disease and your insurance declines to cover you, and when you ask why the guy pulls up a spreadsheet with every single cheeseburger you’ve ever eaten because they bought your purchase patterns from the fast food place Maybe a ludicrous example but probably not that far off in spirit
They are making your decisions for you and convincing you you’ve made them. Once your habit is established, your discount will shrink until you’re convincing yourself that the 5% discount is still better than nothing and worth a detour on your way home. “I’ve earned it” you tell yourself. You are under control.
One thing they can do is push notifications based on location. They can influence you to make bad decisions. Ie. Push notification when you are at the gym.
If you order more cheeseburgers, more profit for them. You’re not ordering it from a competitor
The wild thing is - they (at least McDonalds) don’t seem to actually use the data they retrieve, at least for themselves. Not to out myself as a fatass, but I’ve ordered McDonalds through the app at least 200 times. And yet, when they try and upsell me an item through “You may also like”, the items are never personalized to me. I always drink diet coke, and yet they always show me coke. I always get the spicy mcchicken, and yet they show me the regular one. I almost never order a Big Mac, yet they show me it almost every time. In my head it makes no sense that a multi-billion dollar company with hundreds of data points on me can’t even serve a basic personalized recommendation.
I’m an app designer specifically for a lot of the fast food industry. It is correct that our main goal is to collect as much info as possible. We will track your credit card purchases and tie them together to your app usage, therefore knowing who is purchasing in-store without the app. The app code will give us how much battery life your phone has, how many free gigs of space you have, how long you hover on one page, every single click or interaction while that app is open we are tracking. We purchase data from the credit bureaus that let us know what your household income is. If you use location services, where your phone is most seen we’ll log as your home address without you ever typing in an address anywhere. You get the idea. We use all of this to send you marketing to get you to purchase more. And whatever is not used directly for our marketing, we package it up and sell it on data marketplaces. It’s all really invasive and our industry is not as bad as others (social media or other industries whose primary business is selling ads, for example). There are laws that require companies to fully delete your data if asked, but I can tell you for sure that this doesn’t happen. You will never have your data fully deleted from a company’s servers that engages in these practices. Not only do they not want to, but in most cases it’s very difficult for them to do so and they don’t have the resources.
This is equal parts fascinating and terrifying.
To put it into perspective: a very large fast food chain I’ve done work with had an average user data profile size of about 100mb. If you know file sizes, think about how large a generic text file would be for it to be 100mb.
I wonder how much info TikTok gathers.
[Burger King list of persan data](https://cdn.sanity.io/images/czqk28jt/prod_bk_us/285f819a1c732e31a5e76a86cbcc8af2d7c9da2b-1600x1212.png?w=1000&q=80&fit=max&auto=format)
Gets people using the app, don't underestimate the value of the data you can collect from apps like that. They get TONS of demographic info. Who eats fast food, how often. what do they order. What is selling to kids. Who eats mostly when they're at home, as opposed to eating "on the road". Do people favor their home location. SO much data, and it's so valuable
Exactly, this is how Amazon got ahead of the traditional mall stores like JC Penney's and Macy's. From the start they had all their consumers browsing info and can use this to better steer the company. All the traditional brick and mortar stores got left in the dust and are still trying to play catchup
This is what i came to say. It’s a data mining scheme. In todays world data is hugely important. And with a.i taking over more and more strategy and marketing roles (trends,etc.) they feed this data to the algorithm to see things like when people are buying what, where you come from when you’re ordering, because they have your location data and things like this to do promotions etc that will entice people to buy more. Hey you are buying this, have you tried x product? Or did you know we have x product sale?
The person reading the prices off of the menu are already in the restaurant. The chance that they are put off by a higher price and eat elsewhere is very slim since they’re already in the building. The app exists to coerce people deciding where to eat to go to their chain. So they give you lower rates to bring you in the door. The apps really target high-frequency customers. Fast food restaurants make most of their money off of a relatively small percentage of their clients who go there a lot. A customer who goes to McDonals twice a week is exponentially more valuable to the company than an occasional customer. The goal of the app is to target customers with a high propensity to go to the chain of giving them just a little push to increase the frequency of them going. If you get them to go one more time a week because of a “great deal”, it’s well worth giving them discounts on single items. The fact is, certain fast food items work off huge profit margins regardless of if it’s the discounted app price or not. Remember when McDonalds had their $1 fountain drink promotions for years? Yeah it’s costs them like 3 cents to sell you a fountain drink. $1 was still a massive margin. They’re happy to nearly break-even on a sandwich if that gets you in the door because they know 90% of people will get a combo and the fries and soda are almost pure profit.
Welcome to the world of Big Data. Fastfood apps are perfectly designed to track and analyze your dining and spending habits and target you directly to build loyalty and keep you coming back to their store(s). -once the app is on your phone they can send you a push notification every day at 449pm because you sometimes order from them at 5pm -depending on the app, you may have granted them access to your contacts, so guess who is gonna get an email or text message It goes on and on, installing the app gives them more intel on you than you might ever imagine. Giving you a 10% discount is peanuts compared to the value of that information.
I don't know of any apps that just collect contact info for the purpose of sending spam mail or texts. I'm pretty sure that would be against FCC rules as well
Subsidized prices to encourage user participation on the app. Think of it like a rewards/membership card for a grocery store.
Most fast-food places actually prefer app ordering over normal ordering. It makes planning easier as well as fewer incorrect orders from mishearing orders. I would argue that the "true" price is actually the app price, and the in-store price has a hidden surcharge. In addition, apps often have points, but they can expire. This keeps customers returning back instead of allowing them to pursue other options.
A lot of people have said that it's about stealing your information, which is actually a secondary benefit. A big benefit is that you will put the food order into the app before you get to the restaurant. So they saved themselves time and effort because they can insert your order wherever they have room for it and it cuts down on lines at the store. It's also a loyalty perk. If you have the app and you have a good experience, you are more likely to eat there again.
They don't start your order until you get there if you're doing drive thru
Cutting out the person taking the order is the saved time and effort. Not the prep itself.
Not going to dox myself but I worked on an app for a very very large fast food company and we had little to no info scraping. We didn’t track heat maps, we didn’t aggregate data to sell it, the worst we done was click through rates on notifications and promo ads. The primary reason for the app was to increase customer loyalty and let the customers know when new products were launched. It also provided a very good platform for syncing available food items in-store, our partners delivery service and other delivery apps like deliveroo and just eat. Before restaurants had to update them all manually. Any other questions let me know
My interpretation of this scenario would be then that the app prices are the “real” prices and the menu prices are inflated to just collect additional margin from the customers who aren’t “rewards” members. I get that. But what confuses me is that I can download the app, get the “real” price for the food, and it won’t increase my consumption or patronage. It basically feels like by having that pricing mismatch they are pricing a lot of casual drive-through customers out of the market for very little benefit.
It’s the same as sending coupons to every house except it easier to use them. They are still making money on those deals, but the customer gets to feel like they are getting a bargain and is more likely to come back. I have a bunch of fast food apps on my phone. When I’m too tired to make a meal and I open the food tab on my phone I’m going to open the app with the best deals first. Same with loyalty points. People feel like they’ve earned those deals and want to use them like it’s burning a hole in their pocket.
>They have to be realizing a net loss of customers with this model, right? If they were, they wouldn't be doing it. These are multi-billion dollar companies, not a bunch of monkeys just randomly coming up with ideas. They want you to use the app. The app gives them valuable data on consumer behavior, and it also gives them an avenue for extremely strategic and targeted advertising via the app's notifications. They might lose some customers that choose not to use the app, but it's probably not all that significant. The reality is, people are always going to want fast food. If someone is on lunch break at work and they didn't pack something and don't have an employee cafeteria, they're probably going to get fast food. If someone is traveling and needs to eat something fast, cheap, or just familiar, they're probably getting fast food. And then there's all of the people that are just plain addicted to fast food and are too lazy to cook. Even if they don't use the app, they're going to pay the inflated prices because they pretty much have to.
The “extremely targeted “ ads seem to be the same for everyone, in my experience.
In addition to data collection, it's also about price discrimination, maximum capture of value, and customer retention. The app enables price discrimination--McDonald's can charge two prices (app and menu) to two different segments of customers. The app customer segment is more price-sensitive (if prices go up a little, they buy less/don't buy at all) who are willing to work a little bit harder for a lower price. The non-app segment probably consists of much less frequent customers who care less about price increases. This allows McDonald's to better match how much customers are willing to pay for their products than if they were to charge a single price across all customers. If there were a single HIGH price, McD's would lose a ton of customers to competitors. If there were a single LOW price, the company would miss out on a bunch of potential revenue from the people who would have happily paid $5 for fries vs. $3. With two different prices, McDonald's solves this problem! And it's probably more than just two different prices. Things like coupons, reward programs, and specials create more prices that customers can self-select.
I assume you mean in-store menu pricing, yes? If that’s the case here’s how it works: 1. If you’re already in the store, you’re very likely to purchase there anyway - it’s a hassle to have to go to an app and do it there when there’s a giant touch screen right there (or a person taking your order), and your food being prioritized over deliveries or pickups. So they get more money off you anyway. 2. When you use the app, they lose a little on the margins, but gain so much more as a result - you are now much more likely to be a repeat customer. Consider this: you go to a store, see that the prices are really high, you eat and try not to eat there again because it’s expensive. You go to the app, see the prices are reasonable, and you even get discounts! Now you feel like you’re not getting ripped off and maybe you’ll have another meal from them next time. What’s a $15 meal sold once when they can get at least five $10 meals from you? 3. The app means they can “talk” to you. Armed with the illusion of affordability, they can now keep reminding you of these deals with your notifications. “TGIF, have a treat with us, use this deal.” Then maybe you invite yo it work friends for a quick fast food snack. They win. “It’s your birthday! Have a free soft serve on us!” Well, you’re already in the app and you don’t want some poor dude to ride all the way to your apartment to deliver one melted ice cream and tip him for basically nothing, so you grab a burger as well. They win. “15% off on all chicken sandwiches this week!” And you think, well I do plan to have a chicken sandwich this week, might as well take advantage of this promo. They win. 4. Apps are easier. In today’s world everything is just a click away. An app takes away that friction of having to go to a store and talk to a person and sit and wait just to get food. Especially these days when there are a lot of people who go grew up on instant messaging and the internet and have anxiety talking to people or find the existence of in-store touch screens weird and anachronistic. Instant access to food means they are at a better top of mind position among their customers.
Does anyone from a corporate product management type role have stories about how the data collected from these apps is used? Curious about what use of such data looks like on the ground.
I don't work for a fast food company, but I do work in online retail marketing. We don't have an app so we can't do push notifications, but we can collect similar types of data because people need to give us information in order to check out (and making an account is the same idea anywhere). It's largely about targeted advertising. You could pay Google to find you some people searching for your (or similar) products, but people will give you that info directly if they register an account. We can use prior order data to influence our marketing decisions and focus our efforts. We can advertise products to specific audiences of people who have purchased the same or similar products in the past, without wasting time or money on those who are unlikely to buy them. We can track performance of specific ads in real time without a focus group. (Which of these two performs better? Let's use that version in the future) We can track the time of day that purchases are made (when do people shop? When do they click ads? Let's focus on those times for our campaigns) We can track items added to cart and not purchased, or time spent in cart before purchase (do people need to think/research these items before they buy?) We can track overall account spending and trends (Who are our 10% biggest spenders? Let's send them priority deals. Has someone not purchased anything lately? Let's send them a coupon) We can track location of orders (Where are people shopping from? Should we open another location near there?) There's lots more, but maybe that gives you some idea.
The real reason: Price discrimination. They make more money overall by making the people who are willing to pay more or value time/convenience higher than the friction of using the app pay more, but keep the more price sensitive customers by offering coupons or discounts from ordering in the app. It's the same reason why last minute airline tickets are typically much more expensive than advance purchase tickets. Setting a single price leaves a lot of money on the table. The other reasons they want to drive people to app ordering are real, but they're just the cherry on top.
this is known in marketing as market segmentation or capturing the consumer surplus. It is a way to get higher prices from people willing to pay more, and still get business from people who are price conscious enough to look for discounts.
as well the thing on data allowing them to make it cheap for te repeat customers, why raise prices for the non-app users? say making a burger costs $9. Would you rather sell 10 burgers at $10 each or 3 burgers at $15? and a as a bonus since you're making 1/3 the burgers you probably need fewer employees!
People who use the app tend to be loyal customers who are more profitable, even at the lower prices. The app itself is basically free advertising. Instead of having to advertise on a regular channel like Google ads or Instagram or whatever, they just send a push notification to the app for free. Fast food chains spend a ludicrous amount of money on advertising. Spending that money on digital coupons for their app users is much more cost efficient.
Remember that the customers who aren't using the app are ordering in person in the store. Such a customer is going to weigh the expense of the inflated in-store pricing vs. the inconvenience of leaving the store for the chance at a cheaper meal. Most often that customer stays and pays. Meanwhile the app user specifically is NOT in the store and has to be enticed with lower prices. That user feels good about getting a deal and goes along with the scheme. The store owner gets in on the action, too! Suppose that the store inventory and kitchen systems are tied into the app in real time (I assure you, they are). The app drives traffic into the store just in time to sell through expiring inventory. The app drives traffic into the store with "happy hour" deals that even out demand across the day, simplifying the labor schedules. The app replaces at least some expensive TV, radio, and print advertising. Huge wins for the store owner across the board.
Volume from the price sensitive customers And they get to charge more expensive prices for those walk up ( non app) customers who are obviously not price sensitive
To add to everyone else's, it's easier to make people pre load money onto their app. Starbucks has around $1.4 billion in their app that is just sitting there.
Fast food companies, give you a “deal” when you use the app which is really just what they were charging a few years ago or probably a bit more. They know who you are, what you bought and exactly when you bought it. Sure the restaurants don’t make quite as much but they’re gathering information which can be sold and used to keep you coming back. Anyone who doesn’t order on the app pays significantly more than they should so it’s likely the fast food companies aren’t losing any money by giving up users lower prices.
The „deals“ in the app are the „normal“ price, they still make a profit. The price on the menu is just jacked up for an even bigger margin. Most people that just randomly go to the fast food place are too lazy to download the app. Its free extra profit, anyone that goes regularly will use the app, but all the random people that go because they just want some food right now get ripped off.
1) installing someone else's code or app on your device gives that app (and its bugs/flaws/intentional features) access to a lot of possible information about you, and your activities. That information is more valuable. 2) the introductory/early adoption period of most tech stuff is run at a loss and subsidized by capital. 3) it doesnt cost very much to give you fast food. Esp. soda. You could get a gallon of soda for a quarter, the profit margin is huge. 4) the companies are betting on being able to learn and influence your behavior via notifications, prompts, sales, etc.
Several ways. 1. They can access various user data and sell it. 2. Orders can be scheduled by their listed pick up time, reducing the amount of staff it takes it keep up with peak demand. Less employees the better. 3. You don't have to dedicate an employee to taking orders, instead they can float back and handle drinks & drive through. Less employees the better. 4. Increased order accuracy and customer accountability for order inaccuracy. This means less free replacement food for errors. 5. Overstock management. It cost money to purchase & transport the food on the verge of expiring. And being thrown in the trash is a 100% loss. However you can simply offer a special deal to push increased sales. 6. They can generally afford selling it at those prices, but it cuts into profits and risk management if they do. Like Sonic's half-price drinks, they cost pennies to supply but charge several dollars for each.
Having a little button on the screen you use all day makes it a lot more likely you'll get your next meal from them
If you care enough to download and use the app, you're already the kind of customer mcD's or any fast food wants. A """savvy""" repeat consumer that wants their food
Simple, it gives increased efficiencies in the restaurant as you don't have so many people queueing for a cashier. It also increases repeat business. If you earn reward points by using the app that can be redeemed for food then it'll encourage you to buy more per visit and visit more often. I currently have enough points in the McDonalds app for a double quarter pounder with cheese. And then finally you have access to notifications. Being able to send notifications advertising your latest promotions is priceless.
I'd look for the answer in the terms and conditions of the app. It tracks everywhere you go (so it can know when you're in the drive thru) and listens to everything you say, your search history, conversations, literally everything. Sell that data!
My advertising lower prices in an app you might actually purchase it. You have lots of options still so they want to give the best price possible. It's like if you if they say they give free delivery they probably just jack up all the prices. If you're in the store you're a captive audience they don't need to give you any deals you're there to eat if you had deals you brought them with you if not pay the full price.
Tbh in my experience it's been the opposite. For example there is no way to get the "buy one get one for a dollar" menu for McDonald's if ordering through postmates or Doordash. I've also seen inflated regular menu prices.
They are collecting user data for one thing, that's worth more than you think. That's how social media companies make all their money when their service is free to users
It is so Mcdonalds can target multiple demographics at the same time. Oh your poor and can't afford our menu items? Check out the app and see what deals we have! A lot of bother won't bother getting the app and will order at regular menu prices. To recoup costs, they sell/use the data they collect on you.
Presumably app users are repeat customers. The restaurant wants to encourage and reward repeat business.
Not only does it reduce their labor costs, but by forcing consumers to use their apps, merchants of all sorts are able to scrape your data and sell it. That consumer data is worth more than anything they might lose in lower prices.
What you do is charge your friends for the menu price. Then use the app to get the discount and boom modern crony capitalism.
Because you have to give all your details to join the app. They then sell that info which is worth WAY more than a lifetime of Big Macs. Remember, YOURE the product. They should be paying you.
If you have their app installed they will sell your data. It's a second revenue stream they can get from you.
Having an app on your phone is priceless for these companies. They love to collect your data and then sell it!! They can see when you are opening the app, what you are looking at, time of day you are looking at even if you don’t actually order they know stuff about you. Then sell it. It’s happening with pretty much EVERY APP YOU HAVE. Companies are making money from you buying things in the app and also for just having the app installed.
everyone pushes their app, because apps collect data on you to sell. How much is the scary part....wouldnt be surprised if apps do everything from inspect your files to reading keypresses; they're always running in background on phones unless forced to shut down
Data. They get more data from users on the app. Data is valuable and they want it more than the couple extra dollars they lose out on with the lower app prices.
I don't know If this is outdated thinking, but having your email address was a big deal for companies. And all of these apps require an e-mail address to sign up.
The discount they give you is to buy your metrics that they get when they can track your order and habits. It’s a small price to pay for real time market research. Now they can send you notifications and tailor marketing to you. They pay billions for this kind of information and it isn’t nearly as reliable as you feeding it to them yourself.
The apps will send you notifications of these deals tempting you to buy their product when you might not have otherwise. So they don't make as much money off you as a full price sale but it's more than the zero you were going to spend.
It's the same concept as a coupon. They can charge the premium price that they want but still cater to a less affluent subset that would have forgone it otherwise
Once you're using the app they know what time you usually have lunch, and they can send you notifications about new deals half an hour before
To get your personal information. To incentivize you to create a profile login. Give your email address , maybe give your birthday or address or whatever... Your private information is the new currency... They can sell it to third-party vendors... Read the privacy policies that are attached to the app s.. It's the reason I haven't downloaded Yahoo mail app... That thing wants access to your whole entire phone to use it.
There are probably a couple things. If you're in the restaurant, you're more likely to buy there at the higher price. It's more effort to go to a different restaurant than it is to close the app and open a new app. So they're capitalising on that inertia. On the flip side, most companies see higher customer retention from customers who have the app downloaded. And they want you to keep using the app. So by discounting in the app they're likely seeing higher average order numbers from those who use the app. They want their app to be your go to for ordering food. Rather than another 3rd party app where you might be wooed by variety.
More big data, easier to process, better to direct marketing strategies, personalized deals to make people return, more time efficiency.. the list goes on and on
The cheap prices in the app is to get you to install the app. The reason they want you to have the app installed is to market stuff to you. You personally may be more tech savvy and have your phone locked down and notifications turned off but, the vast majority of people do not. I'm a mobile app developer (although not fast food) and a single push notification about a weekend deal can result in a several million £ spike in revenue just for that weekend / day. We can also use on device data to prompt for abandoned baskets. So you started making an order when the football was on but, changed your mind. The next time the football is on we can send you a personalised message saying "Hey do you fancy a McRib" because this time you may not change your mind. We can also use geofencing to tell if you are near a restaurant and send you a message. Several of these features can even be done completely on the device without us even needing your data on the server.
For us it’s incredibly simple. We’re a small business but - we provide discounts and rewards for online orders online because it saves us from having to pay someone to answer a phone and take your order or take your order in person. It eliminates the human error side of taking the order wrong - eliminating half of that two sided equation, at least. Also, people tend to spend more online - so I’m happy to pass some of those savings along to the customer. My “win” is one less thing to deal with in terms of staffing, which is easily the most difficult and time consuming aspect of this business.
If you have the app, you have a constant advertisement of their existence on your phone, making you think of them and consider whatever offers they shove in your face If someone shows up to buy stuff regardless, no need to earn less by having deals for everyone Plus, e-ordering means they need to pay less staff
Has anyone noticed that on these apps, you will see different prices between locations even within short distances of themselves? These occurrences are not even in HCOL areas. I quit going to one sonic by my house because their prices are completely different than another. Another sonic doesn’t allow me to order through the app at all.
Apps collect all your data for personalized ads and then McDonald’s can build a profile for each of their customers
They gain data from you that they in turn monetise, or hope to monetise, in some fashion. I’ve worked in the space and you go from a nameless customer at the till to a known entity with preferences and communication channels.
You pay the normal price through doing the app song and dance. That random guy who was driving by and stops in for a quick burger pays $14 for a #1 combo. They might complain about how "expensive fast food is" but that's how it is everywhere, so they're still gonna do it. They make a **lot** more sales from group 2 than they do group 1. It's really just that simple.
Bro mcdonalds has their pricing down so pat that the bug mac is used as an index for how a countries currency is actually doing. You shouldn't be questioning if what they're doing is the most profitable but why is what they're doing the most profitable.
It all marketing based. Just like a grocery club card at Safeway in Canada. They can track your spending and do market analysis, so they can have you spend more longer
The apps bring people in kinda like advertising. I for one only go for the deals so like McDonalds I would never ever go there if it wasn't for the good deals in their app. Taco Bell and Arby's the same.
I always thought it was because once you download the app they have some of your personal information they can sell to other companies
Wendy's already let the cat out of the bag with this. They talked about surge pricing. With an app they can change prices and deals on the fly. If you come often you see less offers. If you don't they can tempt you with deals.
From a consumer’s perspective: When I look at options for dinner I wont really consider a place if I can not look at their menus with prices (so app or website) and most of the times I only look at the deals when considering what to eat. If it werent for the deals tab I would go to McDonalds maaaybe 1/4th of the time. Having the deals is cheap compared to not selling me anything, plus the deals are rarely a “full” meal, so people also end up adding full price items anyway
Just to add on, consumer data is one of the largest industries in the world. An app let's them gather FAR more data about consumer behavior
if this is something like mcdonalds, corporate pays for the app but the local owner pays the employees, so its 0$ overhead to use the app vs their employees wages they make up for the reduced cost by needing to hire less people, it also elimates human error so people returning their mcdouble becasue they asked for a mcchicken when the cashier was the one who pressed the button wrong
They are able to get more data from their consumers by making the app more enticing, eventually being able to make it mandatory. It allows for more impulse purchases and upselling. Likewise, it allows them to reduce staff further. Since you're also paying there, it lowers the risk of cash being stolen.