McDonald’s is the latest QSR to embrace geofencing

Dive Brief:

McDonald’s implemented geofencing technology on its mobile app last week, allowing employees to start prepping curbside and dine-in mobile orders when customers are close to the restaurant, the chain said in a statement emailed to Restaurant Dive.
The feature is designed to improve speed of service and make order preparation more efficient.
The chain’s digital channel, which includes Mobile Order and Pay, is a key growth driver for McDonald’s. In Q4 2022, the segment represented over 35% of systemwide sales in McDonald’s top six markets, and its loyalty program totaled nearly 50 million active members in those regions last year.

Dive Insight:

Geofencing aligns with McDonald’s Accelerating the Arches growth plan, which emphasizes digital order fulfillment. The chain was reported to have tested geofencing as early as 2017, though McDonald’s did not comment on when the technology was piloted and in what markets.

“We’re creating an even more personalized and convenient experience when our customers order digitally, enabling us to serve up relevant offers, make them feel more connected to McDonald’s and increase visits and engagement,” the company said in an earlier statement, referring to its digital, delivery and drive-thru business.

Geofencing’s benefits extend beyond shorter service times, too. Operators can use tracking data to understand customer behavior, which can help them tailor relevant push notifications and other promotions from mobile apps, Stephen Mancini, senior manager of strategy, technology and transformation at CohnReznick, said in a past interview.

Major QSR chains and franchisees — including Dunkin’, Diversified Restaurant Group, and Panera — have embraced geofencing over the past few years as demand for curbside pickup, as well as labor constraints, have intensified the need for streamlined preparation of digital orders.

Sixty-six percent of adults report they are more likely to order meals for takeout than they were prior to the COVID-19 pandemic, according to the National Restaurant Association’s State of the Industry 2023 report. In addition, some 39% of QSR operators expect curbside service to become more prevalent in 2023, per the report, and 15% of consumers would most like to see technology that offers more convenient takeout and delivery options.