Skip to main content

McDonald's eliminates its CMO and forms a new partnership with DoorDash: What is the future of marketing and delivery business?


-->
McDonald’s just announced a new organizational structure in its marketing division and a new partnership with DoorDash. Is McDonald’s betting on the right trends in today’s tough market for restaurants?

McDonald’s chief marketing officer (CMO) is replaced with two SVPs

McDonald’s Global CMO, Silvia Lagnado will be leaving the company in October, but there is no direct replacement for such a prominent position. Instead, the company promoted two men who reported to Lagnado to two newly-created positions at the senior VP level, including SVP Global Marketing and SVP Marketing Technology.

As the Global CMO, Lagnado oversaw a variety of marketing functions, ranging from brand development, menu strategy, media, and customer relationship management. The new role of SVP Global Marketing will be taken over by Colin Mitchell, with a focus on business insights and menu innovation; he will report directly to Steve Easterbrook, the CEO. Bob Rupczynski will become the SVP Marketing Technology and report to Daniel Henry, an executive VP and chief information officer (CIO).

The exclusive partnership with UberEats comes to an end

McDonald’s is adding DoorDash as a new partner for food delivery, providing an additional platform for the fast food chain to grow its food delivery business. Before that, McDonald’s had an exclusive partnership with UberEats.


UberEats now serves about 64 percent of McDonald’s U.S. stores. Since the two companies established an exclusive partnership in 2017, delivery makes up about two to three percent of McDonald’s business, at about $3 billion.  

Restaurants typically pay UberEats a fee of 15 to 30 percent of the bills, but Uber would charge a lower fee to some of its large accounts/partners. The delivery fee negatively affects the franchisees’ profitability.

DoorDash is another big player in the food delivery market, leading in sales in San Francisco, Washington D.C., San Antonio, Dallas-Fort Worth, and San Diego. DoorDash’s partnership with McDonald’s launched in Houston across 200+ restaurants on July 29. Consumers in DoorDash’s subscription programs can enjoy unlimited free delivery on orders of $12 or more.

The future of marketing

According to CNBC, other companies such as Uber and Johnson & Johnson (J&J) also took a similar approach to restructure their marketing division. Uber announced in June that the company’s marketing duties would be handled by its SVP of Communications and Public Policy. J&J also eliminated its CMO by splitting its duties among other executives in the company.

Because technology has already transformed business-to-consumer communications and significantly affect consumers’ experience with a brand, today’s businesses must continue to reconsider the job of a CMO. In Uber’s case, such change can also ensure the company uses a united message to communicate with all of its stakeholders.

The future of delivery business

The growing food delivery business is too big to be ignored. Besides restaurants and food-delivery startups, major retailers are also getting into the delivery competition.

Walmart and Nordstrom, for example, are building physical stores that “surprisingly” do not sell anything. These stores, or so-called small hubs, will allow shoppers to retrieve their online orders without waiting for home delivery, responding to the “buy online, pickup in-store” trend.   

The Nordstrom Local hubs are also smaller than its traditional full-service department stores, which agrees to the boutique store trend in the market. Now, Nordstrom has three Local hubs in Los Angeles and is scheduled to open two in New York City in September.

In another Business Insider report, many parking lots are now transformed into hubs for UberEats and Amazon deliveries. Such evidence further supports that Amazon’s departure from the restaurant delivery business might just be a temporary solution.  

Meanwhile, UberEats just stepped into the dine-in business. UberEats’ dine-in option, now available in selected cities, such as Austin, Dallas, and San Diego, allows consumers to order the food ahead of time, then go to the restaurant, and enjoy the food inside the restaurant. Moreover, the standard Uber delivery and service fees will be waived.

The competition in the delivery business is heating up. The question is: how hot can it be? What do you think?    

Note: This post is also available on MultiBriefs.com; the picture was downloaded from FoxBusiness

Comments

Popular posts from this blog

Yammer: A Social Networking Site Exclusively for the Workplace

Effective internal communications among employees are related to some desirable organizational outcomes, such as robust morale, a clear vision, low turnover, and high employee engagement. The question is what platform can serve the purpose. This ABC News video introduces “ Yammer ,” an exclusive internal communication tool for companies. A user must use a valid company e-mail address to sign up for an account. Once an account is validated, the user will be led to the company page that is pretty much like a Facebook page. The difference is that only the users whose e-mail addresses share the same domain can see the wall and communicate with each other. I have no question about whether Yammer could be a useful internal communication tool for companies, but I just wonder: how many social networking sites do people need for communication? Why people have to “create” so many platforms or channels for “effective communications”? To many people, Facebook is only for “friends,” whe

Luxury vs. Millennials and Their Technology: The Ritz-Carlton (By Julia Shorr)

Embodying the finest luxury experience, The Ritz-Carlton Hotel Company, LLC has been established since 1983. In 1998, Marriott International purchased the brand offering it more opportunity for growth while being independently owned and operated. They are known for their enhanced service level as the motto states, “Ladies and Gentlemen serving Ladies and Gentlemen”. The luxury brand now carries 97 hotels and resorts internationally and is attempting to keep the aspects of luxury while keeping up with the trends of the technologically improving generations. The Varying Demographics of the Target Market The Ritz-Carlton’s typical target market includes: business executives, corporate, leisure travelers, typically middle-aged persons and elders, and families from the upper and upper-middle class section of society .   This infers a large range of types of travelers in which all are similar in that they are not opposed to spending extra for the luxurious ambiance. However, with

How to choose the best credit cards for travel (By David Mai)

  Traveling in a Post-Pandemic World If there was one thing the pandemic taught us, it was that everybody became hesitant and unwilling to travel. Shaver (2020) of The Washington Post shared an interesting tidbit in which Americans were actually staying home less during the pandemic, according to research that tracks users' smartphone data.  The quarantine fatigue affected nearly everyone who lived an active lifestyle or loved to be out and about in the world. It was simply not a safe time, and too many regulations were in place that deterred consumers from traveling for leisure. Consequently, the COVID-19 pandemic significantly impacted the travel and hospitality industry. Yet, there is no doubt that people will yearn to travel again when the pandemic is fully lifted. Around this same time, credit card companies have developed unique ways to retain business with consumers who look to maximize rewards and benefits for their journey. A Little Preparation Goes a Long Way