Redesigning McDonald’s US
Francesco Cordua, founder of Exultant Brands, was appointed by the fast food giant to head the process and was set the challenge to bridge brand, strategy, and physical space together entirely through design.
The redesign has not only altered the brand cosmetically, but lifted sales and created a stronger brand identity.
Cordua shared his learnings of how to change a company strategically through design with participants of the 2014 Westfield World Retail Study Tour in San Francisco.
McDonald’s US stores account for more than half the total store network worldwide and generate more than 70 per cent of burger empire’s total income.
Stepping in at the helm of McDonald’s first major redesign as director of retail experience and store design, Cordua not only had to rebrand the stores, but the mindset of the senior management executives and franchisees, all of whom were reluctant to change.
“A lot of people can’t believe that the design of the restaurant was never part of the franchising agreement.
“When I stepped in it at the head of a $2.9 billion budget, we were going to be redoing all of the stores in the US for the first time in the company’s history, so it was really a big opportunity for me to set the brand back onto the correct course,” he said.
“Design is important for the customer, it enables them to believe in quality and commitment that the brand has. In the US, McDonald’s is a suburban brand. Suburban store with drive throughs is what they do,” Cordua explained.
“Quick service restaurants in America are normally seen as fast food, and we really had to start talking about good food fast, and that was the challenge for the company while keeping the owner/operators in mind.”
As part of the initial redesign strategy, all instore components were assessed and re-evaluated. In the US, a McDonald’s restaurant’s store design is not a part of the franchise agreement.
Knowing this, Cordua and his team created the first McDonald’s app for owner/operators to use to gain more information about potentially rebranding their stores.
The app displayed a portfolio of store designs, colour palettes, and measurements, including numerous design packages to cater for McDonald’s variety of store locations and target demographics.
“We broke down every single component that was important to the customer within the store, then created a portfolio of designs that people could use, including a lot of flexibility around their choices.
“All stores play a different role and are in different markets. Using the app, you could twist various graphics and colours to suit their environment for a suburban or urban store.
“This allowed us to talk to [the franchisees] about what it would mean for us to go and redesign the actually experience.
“We were able to talk about what marketing, branding, and merchandising could look like. The app set the stage for innovation without having to rip apart the restaurant.
“We talked to the owner/operators about how every decor could have variations. We talked about the things that had to use versus things that had a option of using.
“Once they decided what they wanted, they could start designing it.”
For $120,000, the app cut almost eight months out of the conversation to get the franchisees on board, according to Cordua.
“It was an incredibly powerful tool that gave people choice within the framework and flexibility within the framework. They could always go back and look at it at any time or change it at any time.
“The app also taught them the words which would help them connect to the designers.”
“McDonald’s puts a lot of development into their products, but at the end of the day if you can’t distinguish yourself with the way that you present your brand then you’re going to be in trouble, it’s just simple,” says Cordua.
As part of the redesign, McDonald’s created its own puncture resistant material for furniture – Evolve Upholstery. It was the first time the company had sourced its own material and developed an entire new fabric and enabled McDonald’s to cut $23 million a year out of its operating costs.
“For the first we had consistency. If there was a tear that would have normally cost $1800 to repair it, but with this system we could actually FedEx out the cover and get fixed for $60.”
Cordua says thepart that surprises people the most is that the redesign took 18 months.
Following the overhaul, sales at McDonald’s US stores increased by between eight and 27 per cent for more than 48 months.
The redesigned also successfully proved that changing interiors influenced sales and brand perception.
“One of the side benefits of the renovation was even though nothing changed in the kitchen, people felt that the quality of food was 12 per cent higher and service they received from the staff was 15 per cent higher,” said Cordua.
“Before, it had become a notion of, how can I talk about the quality of food when I am making you sit on a plastic chair and eat off a tray?
“Customers will always pick the smallest detail that doesn’t match the story you’re telling, and that will be the proof for them you don’t mean what you’re saying.
“Even at the most basic level, sales were seeing at least an eight per cent increase. The most extreme examples of renovations that had taken place were seeing upwards of 35 per cent.
“We have some owner/operators in the US that own 70 stores, so you’re looking at $2 million to $70 million dollars a year.
“The best part of this was that out of the $850 million construction budget, we were able to cut $125 million of costs.”