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Comment by doctor_radium | Hacker News Reader

> And at the bakery chain Greggs, you can collect loyalty “stamps” for free food and drink and get “exclusive app-only gifts”. You currently get a free hot drink just for downloading the app.

> McDonald’s is running a high-profile promotion called Deal Drop, where it offers items at “bargain” prices, such as a classic Big Mac for £1.49 (normally £4.99) and a children’s Happy Meal for £1.99 (normally £3.59) – but all of the discounts are available exclusively with the company’s app.

The article paints a painstakingly detailed photo of the UK's app culture, but fails to explain exactly why app users are entitled to such discounts. What exactly is McDonald's doing with your data that is worth a whopping £3.50 Big Mac discount, and more?? Why is the app so important?? I have never found an article that does more than scratch the surface on this topic. Any suggestions?

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I think such discounts are not as much because of the data, they're a way to tier your customers, similar to coupons.

That way you both get to take the full price from people whose time is expensive enough that they won't bother with the apps, and also those who wouldn't pay the full price but have enough time to use the apps.

I never eat McD's, but I see the pattern everywhere. If you make between the minimum and average wage in Slovenia and don't own property, you practically can't get by without dedicating 6h per week to grocery shopping in various different 'discount' chains (Lidl, Hofer AKA Aldi Sud, Euro Spin), keeping up with the weekly discount catalogs and using all the app discounts (more recently).

As a user of Greggs and McD (UK) I can maybe offer some insight.

Fairly obviously the discounts are to encourage customer loyalty so you keep going to McD rather than somewhere healthier. Also to get you to come back - if you haven't been for ages they may offer a 99p big mac to get you back in.

As to why apps rather than paper coupons, my closest McD has a typically had group of about 20 people waiting for the 50 items they ordered with new stuff ordered every 30 seconds or so. The last thing the low wage rushed staff need are customers going can you explain this coupon to me an is it valid for extra fries on Friday etc.

I've also seen it explained that it's part of their toolset in extracting maximum "value" from a customer.

Richer customers self-select to pay higher prices without the app as they can't be bothered faffing around to find the digital coupon/deal/whatever combination (you can, of course, only use one of the wide range of deals at a time). Poorer customers will invest the time in finding and using a deal.

They both get the same sandwich, but McD got them to pay different prices for it.

Yeah probably that too. I can't actually be bothered to use the McD app although the Leon one with free coffee for £25/mo is good.

Market segmentation through user profiling and individualized discounts based on the entire order, making it hard for people to tell if they are being treated "fairly."

Get more people to use McD's app. When they order, give them a personalized coupon giving you a discount. The discount is different for everyone. Use the response rate, plus information about your buying habit (always buys a family-sized order on Fridays) to optimize the discount.

Raise the non-app prices so the people using the app think they got a deal ... while the overall price is on average higher than if McD's had flat rates for everyone.

People tend to think flat rates are more fair when the services are identical, and get pissed off when they find it isn't.

Most forms of direct marketing require unambiguous consent in the UK (likewise for data collection used for direct marketing). Culturally, many Brits are relatively suspicious of authority and will not consent to the use of their data 'just because'. Loyalty apps are a great invention: they give advertisers a direct channel to the consumer, and the consumer a way to receive something of value in exchange for their deliberate engagement.

I think the idea is to get as many people as possible to install and set up the app, so they then have more incentive to become repeat customers. Theyre probably making some loss on new signups and hope to get it back later on.

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