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McDonald's is setting up shop in the tech community epicenter of Silicon Valley.
The company's new outpost, on San Francisco's Market Street, is the brainchild of McDonald's Chief Digital Officer Atif Rafiq, who came to the company in October. Mr. Rafiq said that San Francisco office will enable it to better attract and recruit digital talent; buttress business development; and provide the company "a way for us to be more plugged into the flow of ideas."
"The office is one of several things we're doing to grow our focus on digital and be more consumer-centric," said Mr. Rafiq. He was quick to note that he does not qualify the San Francisco office as an innovation lab because "it's very connected to the operations of our business" and isn't just for experimenting.
The office currently has only a couple employees, though there is room for 15 or 20 people in the near-term, who he termed "the typical suspects in Silicon Valley. People who have joined mainly have come through my network." Though the company declined to give names of recent hires, Mr. Rafiq said that they have come from PayPal, Facebook, AOL, Yahoo and Microsoft Xbox, among other internet companies.
The company has been posting job openings in San Francisco, seeking digital marketers, digital media execs and designers, among other tech-savvy employees.
"McDonald's has bold plans to evolve the customer experience for the digital era, and the Global Digital team is at the center of this aggressive change," read one recent job listing for a user-experience designer. "Our team is leading the worldwide effort to develop and orchestrate digital initiatives across every facet of our interactions with customers. This includes new brand engagement, e-commerce, service delivery, and digital content capabilities."
McDonald's focus on digital comes as it and its competitors are looking for ways to connect to consumers, particularly in the mobile space -- a medium the restaurant industry has been slow to embrace here in the U.S.
The company is currently testing mobile payments in the U.S., including mobile ordering allowing customers able to pick up food in stores, curbside or at the drive-thru. Mr. Rafiq declined to detail when a national rollout for the mobile test would occur. The Golden Arches has also been digitizing its menu boards in recent years. Overseas, McDonald's and other chains have been working with mobile for some time.
The chain's digital ambitions are presumably well beyond mobile. It just launched a massive global mobile campaign for the World Cup featuring an augmented-reality app, a campaign that Mr. Rafiq oversaw.
He's reluctant to give detail on what the digital team is working on now, but noted that everything McDonald's does moving forward will stem from the goal of using digital to enable convenience.He added that the company is not looking just to hire digital executives in San Francisco, but also more broadly.
Executives close to McDonald's said that the company in recent months had been making the rounds in Silicon Valley prior to the office's opening, chatting up a range of companies from venture capital firm Andreessen Horowitz to smaller, scrappier startups. Mr. Rafiq confirmed those conversations, and said that McDonald's is interested in the "full buffet of companies that could help us." He said that the chain is looking for ways to partner with startups that have tools or tech platforms, as well as larger, more established tech companies like the ones his recruits came from.
Venture capital is clearly an area of focus: "Andreessen is definitely involved with the more interesting companies in the startup space, and our objective is to have an open door in the venture-capital community...I can't think of a company that doesn't have something interesting to talk to McDonald's about," he said, given not only McDonald's vast physical footprint, but also its "prowess in bringing message to consumers and engaging them."
Prior to joining McDonald's, Mr. Rafiq was general manager of Kindle Direct Publishing at Amazon.com, overseeing global product management, marketing, design and development. Before that, he was at Yahoo, first as general manager of the Y! Local division, and then in a global product strategy role for the Y! News division. He's also worked at AOL and Goldman Sachs.
Mr. Rafiq's arrival shows McDonald's executives are recognizing the need to embrace digital technology beyond banner ads, tweets and a mobile app that includes little more than nutrition information -- a realization that came shortly after the chain's nearly decade-long sales increase began to wane.
McDonald's executives in recent months have been more open about the fact that the chain has had hurdles to overcome, namely operations inefficiencies and being relevant to consumers. McDonald's earlier this year at a financial conference said that the first half of this year was a "service reset" for the business, essentially a move to correct slowing operations in-store. At the time, the company laid out three main strategies it was focusing on to revamp its business, particularly in the U.S.: improving marketing; focusing on core products and stepping up digital, including e-commerce.
But Mr. Rafiq said that the chain knows it needs to be able to move quickly when it comes to digital innovations. "Our objective is to be ready to move at the pace consumers are."