Fast-food chains seek quick wins with online shops

The recent spurt of fast-food e-commerce stores demonstrates the evolving nature of digital retail.

Since November, fast-food chains including Dunkin’ Donuts, McDonald’s, White Castle, and Arby’s have all opened online shops selling branded merchandise. While all the sites are timed with the holidays and feature seasonal items, Dunkin’ Donuts and McDonald’s plan to keep their e-commerce stores open all year round.

Why are so many fast-food retailers opening online storefronts selling novelty goods? Here are a few thoughts on how this recent retail phenomenon serves as a bellwether for the direction digital retail is taking.

The ease of e-commerce
Launching and operating an online shop has become a surprisingly fast and easy proposition. There are innumerable software packages and services that enable retailers to quickly set up a specialized e-commerce storefront. 

And with lean manufacturing and supply chain systems and processes, retailers can quickly ramp up limited-time inventory without having to order excess “safety” merchandise. For example, hamburger chain White Castle’s online holiday store, “House of Crave,” is supported by promotional merchandise/workwear platform CSE Powered by Halo.

The social factor
Social media provides an instant promotional vehicle for digital retail that was unavailable even a few short years ago. Fast-food chains can go viral with news about their online merchandise shops with a clever image and hashtag that capture current social media trends (ugly holiday sweaters, anyone?). 

This creates the potential to spread the news about any type of limited-time or special e-commerce site without having to invest time or effort in a formal advertising campaign. Even better, a post that is carefully crafted for social sharing may be circulated to thousands or even millions of consumers by other consumers (McDonald’s has 3.6 million Twitter followers). Shared posts carry “word of mouth” credibility at mass scale, and don’t require any extra action on the part of the retailer. 

Everyone’s a retailer
Fast-food restaurants do not usually engage in the sale of apparel and other branded merchandise. However, a side effect of the ease of e-commerce and rapid (free) promotional opportunity provided by social media is that non-traditional retail has become the norm. 

Celebrities, consumer brands, and media properties such as TV shows, films and musical groups are all now engaging in direct-to-consumer retailing. Fans of the Kardashians don’t need to visit a retailer to purchase their branded apparel, they can directly purchase clothing actually worn by the infamous reality stars from the family’s Instagram shop. Fans of the Beatles and “Friends” had the opportunity to visit licensed pop-up shops to buy promotional merchandise.

In this environment, there is nothing odd or “off-brand” about a fast-food chain selling ugly sweaters, or glassware, or disc golf equipment (currently sold out at Arby’s) for that matter. Next holiday season, I expect retailers in a lot of other verticals, including some non-traditional players, will be selling branded merchandise online.