McDonald’s McProblem: Why Millennials Are Rejecting the Golden Arches
McDonald's has a weakness, and it's not just its quarter pounder with cheese.
It's 19-to 30-year-olds, otherwise known as "millennials."
They may be young. They may lack CEO status. But as Blockbuster, Kodak, and Blackberry have discovered, millennials' collective preferences can make or break a business.
Advertising Age obtained a recent internal memo from McDonald's stating the fast-food giant has failed to make it on millennials' list of top 10 restaurant chains.
This could have something to do with millennials subscribing to healthier, more sustainable food chains. Even though McDonald's added salads to its menu as a nutritious alternative for health-conscious consumers a decade ago, this effort has proved insufficient—especially when we learn things like its Caesar salad is more fattening than its burger.
It's not surprising that McDonald's is absent on the millennial list, says Dan Schawbel, author of Promote Yourself: The New Rules For Career Success and managing partner of Millennial Branding, a Gen Y research and consulting firm. "I think back to Fast Food Nation, which was very popular among millennials," he told TakePart. "They're looking for sustainability. They want their food to be better grown, and when you see McDonald's putting [artificial flavors] in their food, those things aren't helping build trust."
So here comes the Golden Arches' next attempt: the McWrap—McDonald's' biggest product of the year, as Ad Age reports:
Referred to in the memo as a "Subway buster," the McWrap "affords us the platform for customization and variety that our millennial customer is expecting of us." The McWrap comes grilled or crispy in three varieties—sweet chili chicken, chicken and bacon, and chicken and ranch—and will range from 360 to 600 calories, depending in part on the type of chicken.
Said the memo: "Our customers are consistently telling us, particularly millennials, they expect variety, more choices, customization and their ability to be able to personalize their food experience."
But why are millennials so desirable to a chain that already ranks number one in America and whose revenues clock in around $28 billion?
The size of the population, for one. Millennials account for 80 million people on the planet—the largest generation in America. What's also tantalizing to corporations is the impact the demographic has on other generations.
"They're 80 million [people] but they're influencing the next 80 million, both younger and older," Gary Stibel, CEO at New England Consulting Group, told AdAge.
McDonald's isn't getting it all wrong. Its community outreach and social networks are exemplary, says Schawbel. But both of those can only do so much.
"At the end of the day, we're talking about products," he said. "You can give back or do Twitter or Facebook, but if the product doesn't align in millennials' interests, you can't win."
A few companies and products Schawbel sees headed in the right direction include Campbell's Soup, Macy's and the Ford Fiesta.
Campbell's, for one, added Campbell's GO to its product line: "globally inspired" microwavable soup pouches for "millennials on-the-go." Macy's enhanced its in-store experience with touch-screen tablets that quickly locate items. And Ford Motor Company announced six-month Ford Fiesta test drives to bloggers and popular social media users.
The formula for success in a millennial world simply comes down to survival of the fittest, says Schawbel.
"It's tricky. You have to evolve as a brand but still have to have the same values. And you don't want to alienate customers," he said. "But you have to evolve and adapt to change. Otherwise you become extinct."
Will McDonald's become a dinosaur among the millennials? Considering its clout, likely not.
"With the real estate and brand name, McDonald's is still positioned extremely well. It can make adjustments with strong advertising and can change its image over time," Schawbel said. "It's just going to take time and a lot of money."
That, and salad dressings that don't make us wish we ordered a hamburger.