Brief:

• McDonald's plans to add self-service kiosks and mobile order technology to 1,000 restaurants every three months for the next two years, CEO Steve Easterbrook said in an interview with CNBC. He also said the United States is "a little bit behind" other markets like Canada, Australia and the U.K. that already are fully integrated with kiosk service and mobile ordering.
• The fast food company is adding more choice and variety to how customers can order and pay for food. In addition to counter and drive-through service, they can use a mobile app for curbside delivery or use the self-service kiosk to customize and pay for their orders.
• McDonald's has also started offering table service in some locations as it works to "build a better McDonald's," Easterbrook said. The company has seen a small boost in the average check among customers who "dwell more."

Insight:

While McDonald's has been testing self-order kiosks and mobile ordering for a couple of years, the latest news indicates the chain will quickly ramp up the number locations equipped with the technology over the next couple of years.

McDonald's is in the process of a multiyear transformation of its restaurants to make them relevant to consumers who now have a multitude of convenient ways to order food without having to stand in line for counter help. The installation of self-ordering kiosks in its U.S. locations is part of a broader "Experience of the Future" concept that includes Uber Eats delivery service in global markets and menu innovations that the company hopes will appeal to younger, health-conscious consumers.

Adding mobile ordering and self-service kiosks can be challenging for fast food restaurants as it requires careful integration into existing kitchen processes. Previously, Easterbrook said that customer adoption of its mobile app is "pretty low" and the company plans to work on improving the user experience, training employees and making the technology more reliable. Speaking to analysts and investors in April on a quarterly earnings call, Easterbrook said the app had the biggest effect on boosting curbside pickup.

Mobile order and pay, which McDonald’s started testing a year ago, is available in more than 20,000 restaurants of its 36,000 locations worldwide. The service started as a test in 2017, but Easterbrook said during the earnings call that the company wasn't going to put a bigger marketing push behind the app until it works on improvements, but acknowledged that "it’s pretty inevitable that our customers will increasingly engage with us as a brand and as a business through their phones."