Take A Lesson From McDonald's – Merchandising And Innovation All The Time

by Paul Schlossberg
Posted On: 1/21/2019

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  Paul Schlossberg
"You can observe a lot by just watching." That is a quote from the late, great Yogi Berra. It's been one of my favorite quotes – and "watching" people shop has become a habit for me over the years. It is important to do while working on client assignments.

When it comes to merchandising and innovation, there are a few companies we "watch" on a regular basis. The list changes from time to time as innovative developments come to my attention. A few of those players have held a high spot on my periscope for many years, including, in no particular order:
•  Amazon (online only – have yet to shop at one of their brick-and-mortar stores)
•  Target
•  Walmart
•  Whole Foods (going back long before Amazon's acquisition)
•  Trader Joe's
•  Wegmans
•  Any of the big department store in Paris – with extra attention to Bon Marché Rive Gauche   
•  The Food Hall at Harrods on Brompton Road in London
•  A number of convenience stores – especially Wawa, Sheetz, Rutter's and Buc-ee's
•  And – McDonald's1  (We'll get back to this brand later.)

You'll notice that the list above focuses on food-related companies. That's what we do in our industry. Me too – selling and serving food has been my passion since my first "job" at age 16. It goes back even earlier in life, as my father designed restaurants.

There are countless businesses working hard to capture the attention and discretionary dollars of the people who are shopping in their stores. While you might not think about it this way, we compete for the dollars in our shoppers' wallets when they go to other businesses to buy the "things" they need ("things" we obviously do not sell). If they spend it elsewhere, there might be fewer dollars available for us to capture.

We compete to sell immediate consumption food, snacks and beverages. There are many lessons for us to learn from directly competitive businesses.  Again, while you might not think about it this way, we can learn a lot from businesses we do not compete against directly.

It's fascinating, for me anyway, to observe how people shop in different stores. There are more significant differences in behaviors when people are in a hurry versus when they are shopping at leisure. A good proportion of the transactions at your locations probably involve people with little time to waste. How do you get shoppers to buy what you're selling?  

Whether or not you use a formal planning process, what are the marketing and merchandising strategies and tactics you apply to sell more stuff? The critical questions are "Did it work? Or, did it fail? And why?"

My own wanderings among retail venues brought several exceptional stores and techniques to my attention. Some made me completely reassess and rethink assumptions which were solidly implanted in my "tool kit."

One particular store stands out in my memory. It is in a product category with little relationship to our industry. Nor was it selling products for my use. The merchandising and store set was unlike anything seen, by me, in this category. This encounter occurred while walking on a busy retail street in Paris, en route to a business luncheon meeting. At that moment there was little time to stop to learn more. The location was duly noted and my return was planned for later that afternoon.

Retracing the route back to the store, it was challenging to consider what about this store was so intriguing. It was different from any display (from my limited recall) in this category. Everything was arrayed in alphabetical order. If a shopper walked in with a something specific in mind, they would be able to get to that "neighborhood" quickly.

Oops! Did we forget to tell you the retail brand? It is/was Sephora – the personal care and beauty store. That particular layout caught my attention. And, to date, they've never sold me anything.

McDonald's has been a company we always track. They are constantly experimenting and innovating. Digital ordering kiosks are being rolled out at McDonald's stores nationwide. You probably think it is something new. Nearby you'll find a photo of me at a McDonald's kiosk. The store was in Normandy, France and the picture was taken in October 2012. There is another kiosk photo from a nearby McDonald's – newly remodeled in December 2018.

Some of their initiatives are tested on a very limited basis – unless you live in that local area – you'll likely be unaware of it. Others are big system-wide programs. Two examples you'll almost certainly recognize are All Day Breakfast and their expanded coffee program – which added espresso machines at all of their U.S. restaurants.  

How does McDonald's maximize these programs and products in their stores? They do some of it with suggestive selling on signs and on menu boards. An increasing number of menu boards are now digital – saving time and money – as well as delivering much more eye-appealing images and messages. They use signs to get our attention and prompt us to action. Nearby, you'll find photos from McDonald's stores we've visited recently showing some of the signage they deploy.

Do you use signs or menu boards at any of your locations? While the hosts at your locations might not be fans of promotional signs, there are other ways to get merchandising messages and product images to shoppers at your location.

What's the lesson to take from McDonald's?

Here are three things to remember:

1.  We've mentioned this before – here we go again. Make certain that you invest time every week to visit your locations. Sit down and observe people shopping. Introduce yourself and engage in conversations to see what they think about your service and what they would like from your company.  

2.  Get out of your office and visit some of the most innovative retail stores in your area. Be sure to include some non-competing retailers. You might see something new and different. It's not always necessary to create uniquely new ways of doing things. Sometimes you can recognize a good idea being used elsewhere and then figure out how to adapt it for your business.

3.  Do a lot more experimenting with new equipment, devices, products and merchandising tools and techniques. Then be extremely thorough when you ask and answer these questions: (a) Did it work? (b) Or, did it fail? (c) And why?

Build your list of companies you might want to "track." Pay attention to how they change what they do over longer periods of time. It will help identify new things you could do in your business. Keep experimenting and you'll be taking another step on the path to selling more stuff.


[1] Full disclosure: My company did a consulting project with McDonald's about 15 years ago.

A window sign promoting a new breakfast menu item at a McDonald's in Santa Rosa, NM – just off I-40.
A window sign promoting the McDonald's app at a McDonald's in Santa Rosa, NM. You can order ahead or arrange for delivery with Uber Eats.
A door sign promoting the new $6 Meal Deal at a McDonald's in Santa Rosa, NM.
That's me at the kiosk at a McDonald's near Normandy, France in October 2012.
The new ordering kiosk at a newly remodeled McDonald's in Georgetown, TX.
A window sign announcing a "2 for $5" promotion for the McRib sandwich at a McDonald's in Santa Rosa, NM.
A standing sign introducing an LTO (limited time offer) new product – Buttermilk Crispy Tenders glazed to order with three different flavor glazes – at a McDonald's in Santa Rosa, NM.
A take-out bag promotion offer from a McDonald's in Santa Rosa, NM. It's a come-back deal encouraging multiple visits.

» Paul Schlossberg is president of D/FW Consulting, working with clients to merchandise and market products in impulse-intense selling environments, such as vending, onsite foodservice and convenience stores. Based in the Austin, TX, area, he can be reached at Paul@DFWConsulting.net or (972) 877-2972 or www.DFWConsulting.net.