McDonald’s clarifies: No plans to replace workers with kiosks

June 26, 2017 | by Elliot Maras

graphic courtesy McDonald's

A plan by McDonald's to introduce 2,500 self-order kiosks in the U.S. this year does not aim to replace employees with kiosks, despite several recent media headlines announcing just that.

McDonald's has repeatedly stated that the kiosks are not intended to replace workers. Indeed, the U.S. deployment follows deployments in numerous countries worldwide in which the company did not replace employees with kiosks.

In their reporting on a move by Cowen & Co. to raise its rating outlook for McDonald's based on the chain's planned technology upgrades, several media outlets — including CNBC, newsmax, zerohedge, infowars and others — asserted that the company was replacing cashiers with kiosks.

On Friday, a McDonald's spokesperson told Business Insider that the company has said on many occasions that the kiosks are not a labor replacement, but instead, allow the company to transition back-of-the-house roles to more customer service-oriented roles such as concierge and table service.

What Cowen & Co. actually said

Cowen & Co. did not mention the replacement of employees with kiosks when it upgraded McDonald's from "market perform" to "outperform" and raised its price target from $142 to $180, according to an upgrade notice obtained by Kiosk Marketplace.

"Separate from value, MCD is cultivating a digital platform through mobile ordering and 'Experience of the Future,' an in-store technological overhaul most conspicuous through kiosk ordering and table delivery," the notice said.

In March, McDonald's announced plans to have approximately 2,500 "Experience of the Future" restaurants by the end of 2017. The initiative leverages the convenience and technology of kiosk ordering and table service, and increases the functionality of its mobile app.

McDonald's global experience

James Wehner, McDonald's director of global digital experience, told Kiosk Marketplace that the most important thing is that the kiosk is not a replacement for staff, but a facilitator for them. The kiosks' main benefits are improvements in customer satisfaction, staff satisfaction, order accuracy and store revenue.

"As a general rule, staffing levels don't change as the staff are reallocated within the store to serve our customers better and support new propositions such as table service," Wehner said in an email statement. "The exception to this has been in a few stores where the introduction of kiosks has resulted in the need to increase the number of crew to cope with the increase in sales."

"Whilst there may have once been a belief that these devices could reduce the need for staff (externally, I hasten to add, that was never our intention), time and time again this has been proven not to be the case," Wehner said in his email.

Deployments began 10 years ago

McDonald's first deployed kiosks in France 10 years ago as a way to reduce congestion at the front counter and get orders to the kitchen faster, Wehner said.

McDonald's now has kiosks in more than half of its restaurants in a number of markets and in nearly all restaurants in France and Australia. He said this includes tens of thousands of kiosks, but declined to give an exact number.

All kiosks include a payment mechanism, although in some markets the company allows the customer to also pay at the counter if they want to use cash.

The kiosks' capabilities are the same in all global markets, although markets can choose whether to activate some features of the software.

Wehner said there have not been many differences in how customers in different markets respond to the kiosks.

"Interestingly, we've found that all humans are broadly the same and respond in much the same way to this technology," he said.

McDonald's stock reached $154.89 Tuesday, a record high, following Cowen & Co.'s announcement. The stock was at $155.42 as of Monday morning.


Topics: Customer Service / Experience, Food & Beverage, Marketing / Branding / Promotion, Mobile Payments, Operations Management, Self-Ordering Kiosks, Systems / Technology



Elliot Maras
Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.

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