With 32,000 square feet, 1,500 indoor and outdoor seats, two floors and 500 employees, the size of the London Olympic Park McDonald's restaurant alone makes it an imposing new addition to the McDonald's (MCD) global fleet. But in the world of retail, the term "flagship" is not just about size alone. There are expectations that the McDonald's flagship restaurant will also have unique features that elevate it above other average locations bin the chain. The London Olympic Park McDonald's has made a respectable effort to live up to its customers' flagship expectations with these unique features:
- QR codes on packaging which smartphone users can scan to get nutritional information
- Happy Meals with fruit and vegetable side item options (kiwi on a stick, carrot flowers, corn cups, and apple slices)
- Different menu items including porridge, Fruitizz juice, bagels, pain au chocolate, sustainably sourced tea, and local organic milk
- Express ordering staffed by employees with handheld ordering devices
- Contactless payment option
- Unique furnishings and design
- Energy-efficient and water-saving kitchen equipment
- Recycling of cooking oil into biodiesel to fuel UK delivery trucks
- Recycling of 75% of the building materials and all of the equipment after the London Olympics is completed and the location is dismantled
- Chef Demonstrations with McDonald's Senior Chef Dan Coudreaut and culinary experts showcasing recipes that can be made at home
Some of the flagship features of the London Olympic Park McDonald's customers will notice for themselves. Some of the unseen flagship differences won't be known unless McDonald's tells people about them. But that won't be a problem because telling customers how wonderful they are is one of the things that McDonald's likes to do best.
Before opening the McDonald's Olympic flagship restaurant, McDonald's used the spotlight of the occasion to position itself as a global provider of quality food and a corporate leader of "active play" and healthy lifestyles for children. "Customers recognize McDonald's as a responsible, trusted brand that stays current with their lifestyles," said Chief Brand Officer Kevin Newell.
I'm not sure how Kevin came to the conclusion, but its not from reading any of the pre-opening press or paying attention to any of the protests launched against McDonald's sponsorship of the Olympics in general, and their contractual demand that they be the only official Olympic food supplier allowed to serve french fries, specifically.
It's would be easy to list the hypocrisy in McDonald's efforts to use the Olympics to fabricate an image for itself as a healthy, responsible, and caring fast food restaurant. But one only has to look at the large graphic mural of the young person surrounded by a sea of floating french fries on the wall of its London Olympics flagship restaurant to get the picture. Why isn't there a mural of a child surrounded by a sea of floating carrot flowers and kiwi sticks instead?
Senior Chef Dan Coudreaut's recent declaration that nothing on the McDonald's menu is unhealthy is proof enough that the company's leaders are willing to say anything they think consumers want to believe, whether it is true or not.
But this is not about the mis-leadership of the McDonald's corporation. This is about retail flagships and the fact that, despite big economic challenges for retailers around the world, the flagship strategy is still effective and still going strong. The reason why companies like McDonald's are willing to open elaborate global flagship stores at the same time that they are experiencing revenue challenges at home is because flagships are newsworthy and provide a positive platform that can lift the brand.
That's what McDonald's is doing so shamelessly in London, and some version of that positive platform is what companies like Whole Foods (WFMI), Express (EXPR), H&M (HNNMY) and BMW had in mind with their announcement of new flagship store locations this month. Abercrombie & Fitch (ANF) has been opening flagship store locations around the world almost as fast as it has been closing down "regular" underperforming stores in the U.S. because, when they're done well, flagship stores can successfully create a high level of customer engagement, at least for a little while.
When customers walk into the new Duane Reade flagship store that recently opened on Broadway in Manhattan, it's not for 22,000 square feet of cough drops, shaving cream, and candy bars. Rather, customers are intrigued by the flagship store's elaborate financial district-type interior architecture, and are engaged by the gourmet salad, fresh sushi, and hot soup they can get while they're waiting for their prescription. The features of the Duane Reade Broadway flagship that aren't available in the other 250+ Duane Reade New York stores is what brings customers through the door. It's not just an errand, it's an experience.
When customers walk into the Virgin Mobile flagship store that recently opened in Chicago, they'll see and experience very little other than engagement. The Chicago Virgin Mobile flagship store is all about branding, which is something that founder Richard Branson does famously well. Customers who visit this Virgin Mobile retail outlet might be surprised to find that its more of a hangout than a retail store where they can chill out, test out, recharge and app-ify. It's designed to be a cool place for cool people, which by association, builds the cool factor for the Virgin Mobile brand.
If this kind of branding initiative has the same effect on mobile phones as it has had on travel, health clubs, wine, water filters, and insurance, then more Virgin Mobile retail non-sales flagship stores are sure to follow. And if the retailers of the world would follow the trend of elevating customer engagement levels to magnetic levels, then all of their stores could be considered "flagships."
More about the biggest and best flagship stores in London, New York, and China >>
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Comments
Spot on, Barbara – flagship stores don’t have to be huge in size (although they often are) Instead, their success or failure is measured in creating consumer engagement and brand empathy.
But these soft metrics are anchored in old fashioned ones too – footfall is key here, even more so than retail $ sales.
In today’s multi-channel world, retailers know that much of a customer’s LTV (lifetime value) will be captured from on-line or mobile sales, as well as vital peer recommendation thru’ social media.
So the role of the flagship is to create and extend brand affinity, and start that lifetime of association rolling.
A great example has been the rollout of Niketown flagship stores in leading cities throughout the world.
These stores started out as celebrations of sporting achievement, but that inspiration only goes so far. Today’s Niketown now includes more emphasis on ‘My Nike’ engagement, using the NIKEiD concept of personalised goods to connect with consumers.
It’s the job of flagship stores to maintain fresh relevance and inspiration to customers, leaving the mainstream stores and other channels to pull thru’ the hard profit.