McD’s Takes a Boys-and-Their-Toys Approach
By George Anderson
Here’s the basic premise that McDonald’s is putting to the test with its new flagship restaurant: Boys that love toys grow up to become guys that love gadgets.
It’s these very same boys, all grown up (18 – 24 year olds), that McD’s is targeting with features such as digital kiosks for burning CDs, big screen plasma TVs, Wi-Fi Internet access and an adjoining McCafé with gourmet coffee, pastries and a fireplace at the restaurant in Oak Brook, Ill.
Analyst Peter Jankovskis told The Associated Press, “It used to be that a chance to eat burgers and fries with your friends was enough. Now it takes a little bit more than that.”
The reason it takes more, say industry watchers such as Morningstar analyst Carl Sibilski, is because fast food restaurant operators see young adults, particularly males, as a “gold mine.”
“If you want to drive same-store sales, you have to target your message to your most profitable customers,” said Mr. Sibilsk. “That explains the TV screens … and the hipper advertising. They’ve made it OK (for young adults) to go to McDonald’s again. It’s not just someplace they went as a child.”
Moderator’s Comment: What do you think about the direction McDonald’s is taking with its new flagship restaurant?
McDonald’s spokesperson, Bill Whitman, said we shouldn’t expect to see the Oak Brook concept replicated elsewhere while adding, “You will see elements of
this restaurant in some of our new construction. It’s all about keeping our restaurants more relevant for our customers.” –
George Anderson – Moderator
Anything McDonald’s does with regard to going more upscale gets totally ruined when you go in the men’s room to discover one-ply toilet paper. The CEO of McDonald’s should be forced to use McDonald’s toilet paper in his home.
While I do like where McDonald’s is going with more premium coffees, it sounds like they have the potential for alienating other demographics with the introduction of their various interior upgrades. I, as a 20 year old Food Marketing student, rarely go to McDonald’s. However, when I do, it isn’t to go hang out with my friends to have a good meal. It is to grab a quick, cheap meal and continue with what I was doing.
McDonald’s, I imagine, is struggling with the 20/80 rule; they feel that young males are going to be that 20% that is going to make up 80% of their sales. While this doesn’t seem to be a poor short term positioning, I question its effectiveness in the long run. McDonald’s will continue to sell millions of burgers each year; however, I believe they will quickly find that it will not be to this young demographic at the volume they are expecting from them.
I’m lovin’ it. At least intellectually. It responds to the growing desire for interactive retail experiences and entertainment at the retail level. It’s retail as theater. How this will be executed and what it will do to the practical dynamics of getting a burger and actually getting the order right (including ketchup packets) remains to be seen.
Whenever I go to McDonald’s, the demographic is Mom with a wagon load of six to ten year old girls that have just finished a soccer practice. I certainly am not the consumer that would go into a McBoutique to see high priced gizmos while enjoying a McLatte, but that element is out there. I think there is a once around market for this avenue, but long term, I would think it too shall pass like every other ploy they have used to appear not to be hoi polloi. They have done one thing well. They are a fast food restaurant; not that there’s anything wrong with that! They should concentrate on that, and re-establish themselves at THE fast food restaurant.
Great concept! Particularly good if this is part of a portfolio of McD stores, each targeted to the dominant demographics in a geographic area. The Munich store, which takes this to the extreme, is awesome! Also, stores could possibly morph at the appropriate time of day…teens currently have no place to “hang-out” in evening hours.
It seems like Starbucks for the un-healthy. While I may not eat at Micky D’s anymore (and it’s not because I don’t want to; my wife won’t let me), give me one more reason to partake in indulgent experiences from my youth…. I’m in.
They are on the right track with this, in my opinion. Plus, they are adding healthier choices such as their new fruit salad, all reasons to rethink McDonald’s for a lot of people. Their sales seem to indicate that something is working for them.
First this does not sound like the kind of McDonald’s I’d like to go to. It sounds like a cheap imitation of Starbucks. Gee, don’t we have enough of that? We are already oversaturated with low volume coffee shops. Next, with such a significant amount of business going through the drive-through, is there a point of having TVs and fireplaces? Seems this would encourage people to sit around rather than to eat and get out so to make room for more customers. I thought that was why McDonald’s used uncomfortable seats to begin with – to encourage people not to loiter in the restaurant. The same goes with all the alarms going off in the kitchen — to annoy the customers so they will leave after awhile. I’m sure we will not see this concept spread too far. McDonald’s likes to talk up the new ideas with stock analysts and perhaps show off a new “flagship” now and then. I think this is just a show to help pump the stock. But, in the end, we will most likely see the same McDonald’s we are used to seeing and loving.