At a presentation to analysts at the UBS Consumer Conference Tuesday, McDonald's said it's working on its first-ever national loyalty program. At the moment, the restaurant giant continues to build out the technological infrastructure and email database (through downloads of its app) required to support a successful national rewards program. McDonald's app now only offers basic functions, such as a restaurant locator and menu details.
In 2015, McDonald's added a rewards program on its app for its beverages in test markets such as California and New York City. When a person buys five McCafe beverages he or she receives a sixth one free.
The program, which will likely show up on a refreshed McDonald's mobile app, will launch later this year or early next year, according to McDonald's U.S. President Mike Andres. Although Andres wasn't too specific, he did mention the loyalty program would likely be tied to the number of purchases or visits a person makes. The points accumulated may expire each month. Andres said the loyalty program could be "huge" for McDonald's.
So far, the McDonald's app has been loaded about 7.5 million times, says Andres. The download figure is an increase of about 500,000 from when McDonald's reported fourth-quarter earnings on Jan. 25.
There is no denying McDonald's is late to the game with its loyalty program, compared to several of its arch rivals.
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In the first quarter ended Dec. 27, members in My Starbucks Rewards program surged 23% year over year to 11.1 million. More than 21% of total U.S. transactions were paid using the Starbucks mobile app during the quarter. Starbucks estimates that its My Starbucks Rewards loyalty program has grown about 50% in the past two years.
Dunkin' Donuts -- a division of Dunkin' Brands (DNKN - Get Report) -- debuted its national rewards program in 2011. Since then, it has amassed about 4.3 million members in its DD Perks program. Similar to Starbucks, Dunkin' has begun rolling out mobile ordering through its app.