Beacons Spice Up Sales at McDonald’s

By Claire Swedberg

Following a two-month pilot of Piper's Bluetooth beacon platform at 26 McDonald's restaurants throughout Georgia, the fast-food chain now wants to use the technology to serve up promotions and messages to customers at 260 additional sites.

Following a months-long trial of Bluetooth beacons at 26 McDonald's franchises in Columbus, Ga., mobile app technology company Piper, located in San Diego, is deploying its technology at other McDonald's restaurants throughout Georgia, Alabama and South Carolina. The trial—involving the installation of two beacons at each restaurant (one at the drive-through window and another at the sales counter inside) and a Piper app that provided consumers with promotional data, employment information and questionnaires—found that the technology boosted sales of the items being promoted by between 7.5 and 8 percent. The goal is to install the beacons at more than 260 additional McDonald's by the end of 2015.

Piper was launched in 2012 as a mobile developer of apps that involved such technology as geolocation or augmented reality, and were intended for the retail sector, according to Robert Hanczor, the company's founder and CEO. However, Apple included support for Bluetooth Low Energy (BLE) technology in its iPhone the following year. "We saw BLE as the final piece of the puzzle," he says, since it enables an app to provide unique, contextualized information based on a person's given location. Piper is marketing something called the Piper Network that will include retailers, agencies and other users of its app, in order to provide content to Piper app users, based on their location. With its Piper App, the company expects phone users to be able to receive data relevant to the place they are visiting, including tourist information, marketing details from stores or transportation schedules. (However, Hanczor says, the network could also include beacons from other manufacturers).

When a user comes within range of a beacon at a McDonald's restaurant, the Piper app running on his or her smartphone displays discount coupons.

Initially, the deployments have been in the Columbus, Ga., area, involving the 26 McDonald's franchises that are all part of a single co-op comprising all McDonald's franchises within that geographical area. During the pilot's launch, the system was advertised to the public—targeting those who visit McDonald's websites on social networks, such as Facebook and Twitter, as well as promoting the app on billboards and on signage at the restaurants themselves. Customers would then download the app from Google Play or iTunes to operate on their Android or iOS device. Once the app is downloaded, a user can receive transmissions each time he or she comes within range of one of the beacons.

Those beacons, developed by Piper and manufactured by a third-party provider for the company, employ battery power that typically lasts for 18 months to two years, depending on how frequently the device transmits its ID number. A patron's phone receives the transmission and sends the data to the Piper server, which forwards content, based on that beacon's ID, to the phone.

During the pilot, for instance, individuals could receive updates via Apple Pass on either their iOS or Android device. If they are users of the App Passbook—a service that enables individuals to receive and store coupons, boarding passes and event tickets—they could receive notification on their Passbook page.

The pilot focused on two McDonald's products: the McChicken Sandwich and the 10-piece Chicken McNuggets. Upon coming within range of a beacon, a user received a discount offer for each of those two products. To redeem the discount, that person simply showed the offer displayed on his or her phones to the server at the counter. Sales of the sandwich rose by 8 percent at participating restaurants, Hanczor reports, while McNuggets sales increased by 7.5 percent.

"Piper contributed to an increase in sales for the two promoted items and showcased McDonald's as a progressive technology company trying to engage better with customers," says Jack Pezold, the owner and operator of several of the Columbus McDonald's restaurants that participated. "It gives us an opportunity to move one step closer to our customer, and communicate on a real-time basis."

The restaurants also employed the app to recruit new hires. When a smartphone came within range of the beacon, its Piper app could receive a message announcing that the restaurant was seeking new talent, and inviting the individual to become part of the McDonald's team. If interested in a job, the user could send a message to the local restaurant manager and schedule an interview. The system also sends out surveys to collect opinions while patrons are at the restaurant, in order to learn the perceived quality of service and food.

Piper's Robert Hanczor

When downloading the app, individuals can personalize the type of content they wish to receive—for instance, they may be interested in certain kinds of products, and would then only receive promotions specific to that category.

"I'm as excited about the hiring and customer-service benefits of Piper as I am with the couponing capability," Pezold says, since it allows managers "to address issues when they're fresh, giving us a better opportunity to improve our performance." A customer could use the app, for example, to indicate his or her opinion regarding the quality of service at the restaurant's sales counter or drive-through station, or about the food's appearance or taste.

Restaurant managers can update the offers, such as new promotions, by signing onto the Piper server from their own computers or devices. The promotions can be created on a co-op-wide basis, or be uniquely suited to a specific restaurant. In addition, the app is designed to send a specific promotion to each phone user only once, so that a user will not repeatedly receive the same promotional material once it has already been delivered.

McDonald's franchise operator Jack Pezold

With the expansion to more than 260 other McDonald's restaurants in Georgia, Alabama and South Carolina, Hanczor says, the Piper app will include additional promotions and make more content available to app users. The promotions can also be scheduled to be sent to phones during an appropriate time of day, such as sales of a breakfast sandwich in the morning, or a chicken sandwich in the afternoon or evening.

"Younger, tech-savvy customers in their 20s to early 30s turned out to be our most enthusiastic users during the rollout," Pezold states, "providing us with very positive feedback throughout."