McDonald’s is set to launch a new digital marketing fund next year in a bid to enhance its digital business and gain a competitive advantage. This move is part of the company’s efforts to modernize its marketing strategy, which has been outlined in a memo viewed by CNBC. The change will result in U.S. franchisees contributing 1.2% of projected identified digital sales towards the fund starting from next year, with the rate adjusted annually based on projections made at the beginning of each year.
In addition, other markets such as the UK, Canada, Australia and Germany are also expected to contribute towards this global digital marketing fund. This shift in funding is likely to result in a reduction in traditional marketing tools like TV commercials and instead focus on digital initiatives that drive sales directly.
During the first quarter of 2021, loyalty program members generated over $6 billion in system-wide sales for McDonald’s globally. The company currently has 34 million active digital customers in the U.S., with a goal of reaching 100 million loyalty program members by 2027. In comparison, Chipotle Mexican Grill has 40 million loyalty members and Starbucks has 32.8 million.
McDonald’s plans to invest hundreds of millions of dollars to enhance its loyalty program and add new ordering channels, which includes mobile ordering and kiosks. This move comes as more customers turn to technology for their food orders, making it crucial for companies like McDonald’s to keep up with these trends if they want to remain competitive in today’s fast-paced world where technology rules supreme.
