News

McDonald's reinventing food service

June 30, 2004

In Denver, customers can visit the Redbox DVD machines at participating McDonald's and rent the newest DVD movies releases for just $1.00 per night, plus tax — with no membership forms and no late fees — and return the same movies at any participating McDonald's Denver location. The latest new DVD releases are added to the Redbox DVD rental machines every Tuesday. McDonald's is the first quick service restaurant to offer new DVD movie rentals to consumers, extending its legacy of introducing new and innovative ways to create relevant, satisfying, and unique customer experiences in its restaurants.

"This pilot is another great example of how McDonald's 'Plan to Win' is focused on being more relevant to today's customers," said Mats Lederhausen, managing director of McDonald's Ventures. "Satisfying new demands delivered at the speed and value of McDonald's is a fantastic way to leverage what McDonald's does best."

This test coincides with growing consumer demand for the DVD format, with industry observers estimating the number of DVD-ready households in the U.S. to reach 80 percent within three years. Customers can rent and return the newest DVD movie releases from the easy-to-use Redbox DVD kiosks in as little as one minute. Customers simply make their DVD movie selection, swipe a credit or debit card for payment, and receive their DVD. An email address can be entered to receive an instant electronic receipt.

The DVD rentals cost just $1.00 per night, plus tax. Consumers can keep the DVD as long as they like ? there are no late fees. For each extra night the DVD is kept, the consumer will simply be charged another $1.00, plus tax. If consumers keep a movie for 21 nights, however, Redbox will charge a total of $25.00 and the DVD is the consumer's to keep. Because the Redbox DVD kiosks are programmed to accept any Redbox DVD, customers in Denver will be able to conveniently return their DVD to any participating McDonald's Redbox location.

"When fully implemented, Redbox DVD rental machines will be available in over 100 McDonald's restaurants once again providing ultimate convenience and giving our customers another reason to visit us," said Bernie Schaefer, vice president and general manager, McDonald's Rocky Mountain Region. "Denver was chosen because it's a great market for testing new ideas and consumer innovation."

To date, Redbox DVD machines have been installed and are currently operating at approximately 24 McDonald's restaurants in Denver. Another 80 Redbox DVD machines will be installed in McDonald's restaurants, completing the rollout by the end of June. The Redbox DVD machines are installed either inside or outside the restaurants. The Denver test market will be supported by local marketing efforts. The Redbox DVD machines are manufactured by Silicon Valley company, DVDPlay, which has a patent pending for Automated Entertainment Machines.

Also being tested in Denver (plus Illinois, North Carolina, France, Japan and Australia) is a network of self-service food ordering kiosks that McDonald's has been testing for over a year. The touchscreen-based systems allow consumers to speed the ordering process while at the same time seeing an excellent array of product visuals. A reported 70 percent of all orders at kiosk-equipped restaurants are transacted at the terminals.

It is important to note that this program is still in the works though. Lisa Howard of McDonald's, who is very familiar with the program, told Kiosk magazine that the kiosk project is not a standard option at McDonald's restaurants and that only the future will determine what's in store for self-service ordering. The company is also trying out handheld electronic devices that can be used by staff to accept orders.

Researchwww.mcdonalds.com www.dvdplay.net 

Originally published in the July/Aug 2004 issue ofKiosk magazine.