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Insights

Why retailers cannot ignore McDonald’s’ touchscreen innovation

Replacing staff with touchscreen technology at the point of sale hasn’t made the experience less personal for McDonald’s customers – it’s delivering better consumer value than ever before, and high-street counterparts could learn a lot from it.

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Why retailers cannot ignore McDonald’s’ touchscreen innovation

McDonald’s rarely gets things wrong, and its continued success proves it. While it constantly sets the bar for fast-food, its most recent technological adjustments could raise the stakes for the high street as a whole.

The company has always quickly responded to the changing tastes of its customers. From its “grown-up” redesign of European outlets (a strategy since adapted by competitors such as Greggs), to the expansion of its healthy food range (a strategy since adapted by competitors such as Greggs), its decisions have maintained its high-street, fast-food dominance despite there being more competition than ever before, and at a time when consumers are more impatient than ever.

Over the last couple of years, McDonald’s has rolled out Evoke’s touchscreen ordering system at an alarming rate. Cynically, it can be seen as a shrewd move, given it lowers demand for point-of-sale staff and could drop the wage bill significantly. However, McDonald’s has demonstrated how the facelessness of technology does not replace the faces of its staff – instead, it can complement and enhance the consumer experience, responding to a greater demand for personalised service using more suitably modern tech.

The introduction of touchscreen ordering will undoubtedly become a norm in fast food, but retailers in other markets need to take notice of the possibilities this specific development could have for their own high-street presence – so long as they use it correctly.

Temptation stations

McDonald’s makes changes that make it more profitable, and touchscreen ordering systems are no exception. As identified by Brandon Weber of Big Think, the company may see sales rise by over 5% in the first year of the tech’s rollout. While McDonald’s CEO Steve Easterbrook attributed this to dwell time in front of the screen, Weber cited a 2017 study that asserted how the “physical experience of touching products – even on screen – increased the likelihood that a consumer would make a ‘hedonic’ purchase”.

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What retailers can learn from this: By opening a touchscreen channel, you provide customers with a middle ground between online browsing and in-store exploration. While the technology itself is another means of enabling sales, its clever use within your store – such as combining it with a stock check facility, an item finder or an ordering form – you can provide a customised service at a key location in your store, encouraging more footfall and product exploration to an increasingly technologically-minded consumer.

Complementary ordering

It’s no surprise that a fast-food restaurant inspires hedonistic tendencies in its customers by giving them easier technology to order from. But it’s not all down to self-led temptation – McDonald’s follows the standards set by Amazon and friends by recommending complementary dishes, such as sides and desserts. It’s simple yet effective upselling, and the removal of face-to-face ordering only makes the decision more guiltless.

What retailers can learn from this: It’s not too difficult to inspire a customer to buy something related to a searched product (e.g. the correct cable to go with electronic goods) – but it’s easy to take this concept a step further by analysing wider purchasing trends. For example, fashion retailers can use touchscreen ordering outside of changing rooms to promote a wider set of clothing, potentially tailored to the shopper’s tastes, size or outfit purpose, based on recommendations set by either stylists or an AI system which analyses other shoppers’ paired purchases.

And just like McDonald’s, businesses can take this one step further by putting point-of-service staff in a more positive, personal role than the dreaded, shopper-bothering “is everything OK?” approach.

Repurposing and enhancing the role of staff

Weber also noted how McDonald’s staunchly defended its introduction of touchscreens by claiming they allowed staff to better serve customers – not replace them. This is largely down to its table service option: after ordering your food, you can now pick up a plastic table number and have someone deliver the food to your table – effectively aligning it closer to Nando’s than Burger King. While POS staff still exist, this bonus means customers can now sit and wait, as opposed to getting a ticket, aimlessly standing and grumbling to oneself – or engaging in the 2am bunfight of climbing over tired and emotional people trying to get served.

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What retailers can learn from this: Businesses cannot afford to use touchscreens to replace staff, as consumers are now crying out for the personal touch, alongside more convenience. Workers can complement touchscreen technology in fashion stores, for example, by acting as personal helpers or even stylists, fetching alternative or complementary outfit options for those in changing rooms to try on. As well as keeping people in store, it showcases the benefits of ecommerce-style technology with a service customers couldn’t possibly get at home.

And as we discuss in our 2018 Fashion Analysis in our first-ever Retail Experience Score, demand is higher than ever for click and collect; retailers already need to use staff better to offer a faster and more accurate stock-led service, so they can be reassigned to meet this demand and help drive footfall further.

Accessibility for all

While this benefit may be overlooked by the average consumer, McDonald’s is also making orders easier for those who don’t feel comfortable with human interaction. Whether helping people with experience of mental health issues to those who are introverted or just someone who personally prefers the tech, the ability to order on a screen breaks down another boundary for countless consumers.

What retailers can learn from this: Aside from the obvious benefit of being more inclusive, touchscreens can be adapted to other environments with ease. Retail, unlike fast food, can often be notorious for its high-pressure sales tactics. Factoring in this system will help people discover the products they want at their own pace, while a complementary personal helper service can work with it, if required. Additionally, the likes of clothing shops – where people may not be comfortable asking for a certain size – can be better catered to if they request an item to try on, before finding these sizes hanging up for them in a dressing room.

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What you want without the pressure

As with coffee shops, fast-food outlets offer increased customisation with pretty much everything they sell, satisfying different budgets, appetites and health concerns. Personalisation through touchscreens represents the easiest means of doing this, not least because people often don’t know what options are open to them at the counter; the technology also stops someone rushing an order because they’re at the front of a queue of hungry consumers. This opportunity for detailed personalisation wins customers back – they get what they want, how they want it, and can take their time to switch things up if the mood takes them.

What retailers can learn from this: The ability to explore, compare and customise purchases with touchscreens could be hugely impactful for a number of retail sectors. Electronics sellers in particular could benefit, given the huge choice available for major purchases, notably laptops and mobile phones. Customers looking for either of these know that they will commit to their choice for a minimum of two years, so high-pressure face-to-face sales can be intimidating for many, especially if the member of staff securing the contract looks for upselling opportunities.

If touchscreens were more prevalent in electrical retailers, customers could take their time to browse aesthetic options like colour, but also explore the benefits of performance issues such as memory, data, screen size, and more. The addition of comparison tables, similar to those offered online by the likes of GSMArena.com, could not only help the customer, but actively get them in store to compare models, test them in store, and get human input when they want it. They can be in charge of their purchase from start to finish, imbued by expertise offered by the store in question.

Tailored correctly, touchscreens can and will enhance retail experiences, and could reposition staff doing what customers want, and in a way that’s much more comfortable for them.

Showcasing more in store

It’s as simple as it is effective: touchscreens, when not helping people order their food, show video advertisements for other McDonald’s products when not in use. It means no opportunity to sell is wasted – and new products, sales or underselling stock can be prioritised at the touch of a button.

What retailers can learn from this: Advertising is part and parcel of any store, from window displays to end-of-aisle promotional shots. Replacing these often-static set-ups with eye-catching moving ads – which can transform into interactive hubs at the touch of a button – can offer the best of both worlds in most, if not all, retail environments.

Customers are lovin’ it

Tailored correctly, touchscreens can and will enhance retail experiences, and could reposition staff doing what customers want, and in a way that’s much more comfortable for them. McDonald’s has committed to the technology for the future and while it already looks like it’ll spell great success for the fast-food giant, the blueprint it follows is one that can be easily followed by even the newest retailers taking their place on the high street.

While real success for this technology requires many cornerstones of omnichannel excellence to work properly – specifically accurate stock check, intelligent upselling and (even limited) personalisation – touchscreens could pave the way for bigger and more responsive tech. It’s just surprising that so few businesses still haven’t considered its vast array of benefits yet.

Insights

Is it time to kill the retail app?

As we investigate how businesses can keep their technology ecosystems as agile as possible, we explore if apps are as viable as statistics appear to show.

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Is it time to kill the retail app?

Apps are like blue jeans: since their invention, they don’t seem to have gone out of fashion. There’s more money in apps than ever before – so it’s no surprise that businesses still consider creating their own, even though it’s over ten years since Apple opened the floodgates, and major players like eBay and Amazon started appearing on the App Store.

By 2020, Statista expects apps to make $189 billion (£147 billion) worldwide – a dramatic rise from the already astronomical $88 billion (£68 billion) recorded in 2016. What’s more, further Statista research found that in 2017, there was a 54% increase in consumer time spent using shopping apps. With numbers like this, it’s enough for any CEO to get cartoon-style dollar signs in their eyes.

Yet once you peel away the attractive veneer, the figures aren’t quite what they seem; in reality, app development might not prove profitable if you’re looking to explore the option as a new channel. In fact, it might be quite damaging to your bottom line.

Don’t fear; it’s not all bad news. There is a future-proof, cheaper and better alternative for omnichannel retail if you decide against building an app. The argument against developing an app is much more than a numbers game, and there’s a wealth of statistics that prove there are other, more accurate underlying trends characterising the app market that you need to take notice of.

Breaking down the numbers

Revenue is usually a great barometer for success, but in terms of user adoption, usage and interaction with apps, the landscape is shifting in an entirely different direction – one that doesn’t necessarily reflect well on retail.

Non-shopping apps skew the statistics. Apps do bring in big bucks, but it’s not retail giants powering this trend. During August 2018, the top three games on iPhone alone (Fortnite, Candy Crush Saga, Pokémon GO) brought in over $4 million a day in the US. Media streaming services (Netflix, Spotify, Amazon Prime Video), along with dating subscriptions (Tinder, Match, Zoosk) accounted for over half of the top ten non-game apps by revenue as per a survey by SensorTower last year.

Retail isn’t a big app category. While games accounted for a quarter of all available apps in May on iOS, shopping took a lowly 1.37% share – 20 places behind gaming.

Amazon is an ever-growing juggernaut. Amazon is the top app that millennials “can’t go without”, with 35% naming it indispensable in 2017 – more than previous favourite Facebook (29%), and more important than Messenger (18%) and WhatsApp (11%) combined. But given it’s a store that sells everything, why wouldn’t it be?

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Amazon is now so huge that a comScore survey earlier this year found that people spent more time on it than the rest of the top ten retailers combined – influencing the aforementioned 54% rise in shopping app engagement. Its product range now accounts for 81% of all sales of FCMG, 65% of all apparel and accessories, and 75% of furniture, appliances and equipment in the US. On top of this, 78% of mobile access was spent in-app.

Mobile shopping does not just mean app-based shopping. Last year, mobile and tablet purchases on Black Friday in the US surpassed that of desktop for the first time, and it’s only set to grow. Yet this data is solely down to access via device – in reality, the vast majority of this came from the mobile web, not mobile apps.

Many people use apps once, then never touch them again. In a steadily-holding trend, apps used just once after being downloaded hangs at 21% in 2018, according to Localytics, which added: “There is still progress to be made to keep users from jumping ship before they see the value of your app.” With one in five people, the novelty can wear off quickly.

Some people don’t download apps at all. Despite app use being massive among mobile users – again, skewed by digital media streaming – comScore discovered in mid-2017 that just over half (51%) of them download zero apps per month. Getting people to see an app is one thing, but if they don’t open the store in the first place, there’s a different problem entirely.

The true cost of creating and running an app

In the minds of many, these statistics will still be dismissed by many successful app developers, and well as new app creators who believe they’ve got the perfect release for the current market. They’re not wrong, either: if an app is good enough, it’ll succeed, even if it’s late to market.

Yet for the most part, app success is hard to gauge, or even record. It all boils down to risk vs reward, but at a time when retail success is already strained, the time and effort spent getting an app to market – and then maintaining it when it’s there – could be a lot greater than you expect.

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The wider price of development. Getting staff – either internally or externally – isn’t cheap. However, this team needs to be “always on”. It’s not a simple case of building an app, releasing it and letting it do its thing. You need staff on hand to:

  • Issue patches and fixes as bugs are found or when Apple or Google release new versions of their operating systems.
  • Duplicate functionality to the app as new features are developed for the website.
  • Customise the experience to different releases of operating systems, as well as the different operating systems themselves, i.e. iOS and Android (at a minimum).
  • Maintain a whole marketing channel for the app – one that’s separate to the marketing of the website.
  • Understand, create and deploy bespoke technology that integrates analytics, A/B testing tools, heat-mapping and other feedback technologies – something that can be incredibly difficult to achieve, using technology that is often inferior to established services for standard website testing.

As soon as you create potential barriers to a sale, your business has the wrong outlook.

The cost of an app to the user. While it’s been established that apps are often never downloaded by consumers, those that do take the plunge often do it after assessing a number of simple factors:

  • Despite bigger and better data packages than ever, mobile data is precious to users, and apps are now well known to drain this passively. Even games are “always on” even if they’re played offline, sometimes requiring connection with
  • Phone memory is also precious, and apps take this space up; many handsets are still restricted to non-expandable memory, most notably iPhones.
  • Time is money, and the act of going to an app store, downloading the program and waiting for it to install may take as long – if not longer – than a visit to the mobile site to buy the product there.

Simply put, as soon as you create potential barriers to a sale, your business has the wrong outlook. A true omnichannel company makes the act of buying a product or service as straightforward as possible, and expectantly consistent across all channels.

So, if you’re looking to capitalise on the native app channel without actually building one, what do you need to do?

That’s a wrap

If you plan to create an app that is just a downloadable version of your website, but with little-to-no added meaningful functionality, there’s simply no point, as this just moves time and money away from the necessary goal for any online business: improving the user experience of your mobile site.

If you have a poor mobile site, it could be tactically smart to make the short-term decision to build an app and mitigate those major issues – but the strategic, long-term project which underpins this should always be to fix the website.

At the other end of the spectrum, you might have an industry-leading mobile site, to which you want to introduce significant additions to enhance the experience – however, all improvements should target the largest number of eyeballs wherever possible – and that's your mobile site.

This approach doesn’t mean you have to neglect the potential of native app users. By utilising a wrapper – a native app that merely contains a window into your existing mobile website – you can layer on the minimal amount of functionality that is simply impossible to achieve on the web, without enormous investment both upfront and in long-term maintenance.

What might surprise you, however, is how far you can push the capabilities of the web – it’s a constantly evolving platform, that has come on leaps and bounds over the last few years, to the point where it has caught up massively with the hurdle-less simplicity that apps were once known for. For example, well-designed mobile-friendly sites in 2018 boast features such as:

  • Apple Pay / Android Pay
  • Offline support
  • 3D rendering
  • Gestures, such as swiping and pinching
  • Sensor integration, such as geolocation, gyroscope and the camera

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The future looks even brighter for the web platform, too; APIs are currently being developed for Touch/Face ID, Bluetooth/USB integration and even Virtual Reality, truly closing the gap on the functionality that continues to be the sole preserve of apps.

This means the majority of your investment can go into your mobile site, where the majority of customers are, and the native applications become tiny, maintainable layers of additional functionality that enhance the user experience even more. Over time, as the web platform implements more native-only functionality, you can migrate more and more into your mobile site, making them available to 100% of digital customers, not just the small percentage using your native app.

A progressive frame of mind

The decision to focus on making a friendly, app-like interface for mobile sites is not new; in fact, two corporate giants have proudly reported the success they’ve had developing progressive web apps to deliver the experience their customers demanded.

The first, Pinterest, had a horrific reputation on mobile – something it reflected on in July, when its engineering team looked back on its first year using a Progressive Web App (PWA). As a result of its commitment to the mobile site – which more than halved its JavaScript payload – Pinterest enjoyed a 103% year-over-year rise in active users on mobile web; logins jumped by 370%, and new signups rose by 843%.

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Meanwhile, Debenhams has seen double-digit growth since deploying its own Progressive Web App. Also focusing on speed has meant the new site has allowed customers to complete their session over three times faster than before.

Success stories are rolling in already, and from businesses that took a calculated risk with new technology to improve mobile service. And so we’re back with the initial question...

So, should I build a new app?

Put simply: probably not.

Businesses with successful apps should certainly continue to develop them, but possibly consider migrating more functionality to their mobile website. However, companies that are yet to appear on app stores must ask themselves five questions before taking the leap:

  • Is app development worth the cost, both initially and in the long term?
  • Will an app add a new revenue stream, or just partially cannibalise existing income streams?
  • Is there enough repeat custom to justify people installing it for regular use?
  • What makes an app markedly different or better than an improved mobile website experience?
  • Are customers asking for an app – and if they are, why do they need one?

Ultimately, if you have a fantastic reason for an app – and you absolutely have to build one to satisfy audience demand – do it. But strategically speaking, the most important bottom line is the ecommerce platform you have, which should be able to cover all elements of the omnichannel process, including web and native apps.

If you can’t create the exact experience you want with your website, an app may be for you – but in real terms, what business-critical abilities can only an app deliver your customers?