So this might be a pet issue, but since I have the soapbox, why not use it, right? There’s a lot of talk lately about how a $15 minimum wage will have us all eating robotically served fast food, and how that’s a prelude to the larger trend of robots everywhere, doing everything.
This might sound trite, but the minimum wage isn’t the larger issue here.
I’m not saying social issues aren’t of importance. I’ll be the first to raise a hand and say that money should be of less importance in general. I don’t believe it speaks to what’s important and makes us happy, at least not if the research is true, which, well, it is. It’s a matter of economics and marketing nuts and bolts.
What I’m saying is that there are things business can accomplish and things it can’t. A lot of that has to do with consumer perception. It has to do with markets, supply, demand, and perceived level of value. If these seem like economic terms, nice ear, they are. They relate directly to what people think about the variety of goods, services, environments and relationships that are available for them to consume. They apply in any era, in any place. If you fail to account for them, you’re left holding the short sighted end of the stick, wondering why everything went wrong.
First things first, if McDonalds wanted to be serving burgers by robot today, they could be. The technology exists, is accessible, and affordable.
So why aren’t they?
Rather than beg questions from someone who won’t answer, or give you a straight answer, let’s do the unthinkable, and ask ourselves a few questions, remember, there’s no wrong answers, and if you’re lying, the only person you’re lying to is yourself.
1. How much would you pay for a burger made 100% by machine?
2. How would you feel walking into a foodservice business where there were no humans greeting, cooking, cleaning, etc.?
3. Presented with the option to buy food at the same price made by a person, which would you choose?
4. If there’s a differential, in terms of what you’d pay, what is it, and how do you explain why it exists?
These are pretty basic market research questions. If you don’t know the answer to them, you simply can’t act. If the answer to them isn’t clear enough, you simply can’t act. If the answer isn’t quite as good as it needs to be, you guessed it, no action.
Let’s take a walk with the ghost of innovation future, and we’ll see why…
McDonalds goes live with full robotic operations, no price change, just a month of renovations across the country and they’re fully mechanized. Unrealistic, absolutely, but as the economists say, ceteris parabis y’all, it makes sense, stock and customer numbers are slipping, why not make a change, we’ll cut payroll and pick ourselves up by moving into the future, right?
The next week, Wendy’s, Arby’s and Burger King roll out attack ads. I mean, the perceived quality level of something “artisan” and “handmade” versus a robot, that’s a softball for pretty much any adman, let’s not act like it wouldn’t go there.
Even before said campaign has a chance to have real impact, things are in limbo. Consumers are going to try this, there’s no doubt of that. There’s a novelty to it. It’s new, hip, and probably supported by some fun contests and advertising. The question is: Will they keep trying this? Will the average consumer pay the same amount for something at McDonalds made by a machine that they paid for it made by a human at McDonalds a month earlier? How much are you willing to gamble on that? A franchise? An industry? A national economy?
So let’s say consumers love it. It doesn’t screw up orders, it’s fast, and the world looks bright and rosy. Do you know what the cost to be “first to market” with any new technology is? It's a lot. The leader of the race doesn’t get to draft off anyone else. That means that when the campaign differentiating human made burgers at the same price hits, it will have impact. This isn’t a projection; it’s a fact about the way human beings think. It’s a fact about what human beings trust.
Trust is really the key. You and I know that when McDonald’s fires its human employees it’s doing it to save costs, how then, can they keep prices the same? If they lower them, how far do they lower them? It’s not like there are examples for efficiencies in robotic food preparation and service, the data for this all has to come from somewhere…
The reality is that what will happen is they will roll out slowly. Remember Nike’s Fuel vending machines? (Yes, that’s a hat tip to myself, because I’m cool like that) The same thing can be done on a location by location basis serving food, obviously on a more permanent infrastructure basis, however. This will minimize the cost to convert existing stores, and mitigate the risk of being the first big spender on robotics, which, let’s be honest, isn’t likely to be McDonalds anyhow, they’re one of the most conservative of all the fast food chains in terms of brand control and development.
As a consumer, it’s a turning point for you, and for all of us. What we’re willing to pay and under what circumstances will have a huge impact on our future. While the people who market these things to you (and oftentimes at you) have a lot on the line, so do you. The success of any of the various models that comes along is going to do a lot to set the tone for the followers who are sure to flock into the game once one of the big players gets involved. It’s likely we’ll never see any of the major chains go completely mechanized, but how they split their audience in terms of demographics and price, that’s anyone’s guess, and I promise you, it will be based on some form of hard consumer and/or revenue data. You might just find yourself paying 15 bucks for a gourmet burger made by a human at McDonalds sometime in the near future. After all, if people are willing to pay the same amount for a burger made by a machine, more cheaply and with less oversight, it makes sense the boutique nature of all those “gourmet” burgers will gain value, won’t they?
Anyone’s guess whether mechanization is followed by increased wages for workers, as mentioned, how much people get paid is a great issue for politicians, but it’s only a small part of the equation that goes into putting a product on the market.
It shouldn’t need to be said, but that’s why it’s supposed to be about more than the almighty dollar, but that’s a topic for another time.