Last month McDonald’s set forth its “National Hiring Day” with the goal to hire 50,000 new employees and overturn the reputation of the dead-end McJob. But the chain’s image makeover did not end there. Not only does it have new employees, but soon McDonald’s restaurants will have a new physical appearance. This 1 billion dollar redesign project is meant to transition McDonald’s to more of a “high-class” establishment and keep customers in the stores for longer periods of time.
With free Wi-Fi, electrical outlets, comfortable faux-leather armchairs, wooden tables, earth tones and contemporary lighting (Starbucks, anyone?), McDonalds will include “Linger Zones” that allow patrons to socialize or work on their laptops in public. As a company known for its quick service and customer turn over, this is perhaps the most dramatic change ever to McDonald’s “look and feel.”
“Linger Zones” will attract a young adult crowd to its restaurants, just as the play areas and ball pits were meant to attract families with young children. But McDonalds is moving away from that childish image. It has begun phasing out Ronald McDonald, the fun-loving clown that represented McDonald’s since 1963, from its advertising. Unfortunately for Ronald, people associate him with high-fat meals instead of the salads and specialty coffee drinks on which McDonald’s now focuses its marketing.
“McDonald’s has to change with the times,” said Jim Carras, senior vice president of domestic restaurant development for McDonald’s. “And we have to do so faster than we ever have before.” Carras claims the re-design will make McDonald’s more modern and relevant, while still maintaining its playful, energetic and optimistic brand.
As with any reputation overhaul, the ultimate goal of this campaign is financial. The reimaging process has already proved successful in a McDonald’s restaurant in Colorado. After a redesign, transactions have risen by 9% and sales have increased by 10%. More people now enter the restaurant for counter service rather than visiting the drive-through.
The new, sophisticated image attracts more patrons. “McDonald’s will have a much better chance of luring the most profitable customer (who orders pricey Angus Burgers instead of Big Macs) while retaining the entry-level visitor,” David Palmer, analyst at UBS says.
McDonalds is using this opportunity not only to grow its own company, but also to crush competitors like Burger King, which just faced financial difficulties with its own re-design plan. It will also attract customers who like the atmosphere of chains like Panera but who appreciate less expensive meals.
Will this cosmetic change really work to reinvent McDonald’s reputation, or is it simply “putting lipstick on a pig?” A poll on sodahead.com shows that the crowd is pretty much split down the middle about the redesign and the effect it will have, but McDonald’s claims that it will expand its menu to match its new image. With a new customer base, the menu can include more “upscale munchies,” according to Carras.