Big Mac to Big Data: McDonald’s Forays into ML for Better Customer Experience
Earlier this year, in March, iconic global brand McDonald’s surprised the technology sector when it acquired personalisation startup Dynamic Yield. So why would a fast-food company invest a rumoured USD 300 million in a “decision logic” technology provider? Because, according to a 2017 Gartner study, companies that fully embraced online personalisation would enjoy a 30 […]
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Earlier this year, in March, iconic global brand McDonald’s surprised the technology sector when it acquired personalisation startup Dynamic Yield.
So why would a fast-food company invest a rumoured USD 300 million in a “decision logic” technology provider? Because, according to a 2017 Gartner study, companies that fully embraced online personalisation would enjoy a 30 per cent sales advantage over competitors. And Gartner placed Dynamic Yield as a leader in its research report,
Since the acquisition, McDonald’s has already begun using the new technology to provide more personalised customer experience.
How is McDonald’s Using Data for Personalisation
McDonald’s outlets are present in 38,000 locations in over 100 countries. According to CEO Steve Easterbrook, the company serves around 68 million customers every day. That’s a massive amount of data! “How do you transition from mass marketing to mass personalisation?” asks Easterbrook in an exclusive interview with Wired magazine, “To do that, you’ve really got to unlock the data within that ecosystem in a way that’s useful to a customer.”
Care for a McTech, Anyone?
McDonald’s is an information-centric company that operates with a data-driven culture. In the past, the company used averages from various outlets for trend analytics, gaining insights on a local level, combining datasets to visualise the differences between the outlets. The company later moved to using Big Data to optimise their drive-thru experience on three factors – the design of the drive-thru, the information provided during the drive-thru, and the number of customers in the queue at that particular drive-thru. Using predictive analytics, the company would then find the optimal solution for design, information and people.
Also Read: Data-driven Marketing is Critical for Brands
However, they didn’t acquire Dynamic Yield only to strengthen their drive-thru experience
McDonald’s tracks as well as analyses data like in-store traffic, customer interactions, ordering patterns, point-of-sale data, to improve its customer experience. Ergo, while McDonald’s outlets across the globe look and feel the same, the data collected from each outlet provides the brand with insights that help personalise experience optimised for that particular local market.
McDonald’s has already begun rolling the new technology out in the drive-thru at restaurants in the United States in 2019, after the acquisition. They plan to expand it to other markets soon, the company said in a statement, adding that it plans to integrate the technology into all of its digital customer experience touchpoints, such as self-order kiosks and its global mobile app.
According to Wired, McDonald’s tested the technology in Miami by providing digital drive-thru screens that recommended food items based on factors like time of the day, the weather, and trending menu items. And like shopping on Amazon, customers were also recommended items based on their current selections.
Also Read: Understanding and Influencing Customer Behaviour Using Customer Data
For example, if someone ordered a breakfast sandwich in the morning, the screen prompted a message that said, ‘Would you like to add a coffee to your order?’ assuming that coffee is something customers order during their morning commute to work, as well as something that goes with a breakfast sandwich.
“When you look at the answers that this decision engine provides, it may not seem so obvious to begin with, but for customers, it makes sense. It’s not just about the individual, it’s also taking training information from other customers,” adds Daniel Henry, McDonald’s executive vice president and global chief information officer.
Yielding CX Benefits
As a former direct competitor of Dynamic Yield, Reflektion CMO Amede Hungerford has an interesting perspective to share. In an exclusive comment to MarTechVibe.com, Hungerford points out that as an iconic worldwide brand, McDonald’s use of data further illustrates how leading brands are adopting AI/ML personalisation technology into their strategy across all channels. “For a major company to continually enhance their customer experience and business approach, they must not only improve their business processes but also engage more closely with the audiences they serve,” says Hungerford, adding, “The adoption and success of personalisation within QSR mirrors what we see across all retail and eCommerce clients as well. Across all industries, we fully expect more and more brands to tap into new interaction and purchase intent data sources to enable a holistic, omnichannel approach to the consumer experience, much like McDonald’s.”
McDonald’s closest competitor, Burger King, launched its QSR app to overhaul its customer experience recently. “We generated over 1.5 million downloads from the initiative, making the Burger King app the No. 1 most downloaded app in the Apple store for several days in a row and the most downloaded quick service app in the US among our direct competitors in December 2018,” informed Burger King CEO Jose Cil.
Noah Glass, CEO Gomobo, who helped develop the app for Burger King, says that the app has increased average order values by 25 per cent over those placed in-store. In a mobile-first world, that’s an ideal way to engage your customer on-the-go.
Also Read: Is It Time We Stopped Talking About CRM?
McDonald’s has already launched its mobile app as well as introduced self-order kiosks at its outlets in the recent past.
Easterbrook admits that building customer relationship is the ultimate goal of all the technology adoption. “We’re now creating this very, very powerful ecosystem that as we start to connect these technologies together, we’ll offer our customers a better experience, better value, more personalisation,” says Easterbrook.
In an exclusive chat with MarTech Vibe, Ed Breault, CMO, Aprimo, shares that for any brand to win in the digital age is to deliver a consistent and superior experience every single time a customer interacts with the brand. “This is forcing brands to reverse engineer these customer experiences and really understand how to deliver what they need, and McDonald’s understands that.”
As per Breault, creating a more relevant and enjoyable customer experience is critical to winning the hearts and minds of customers. And in order to achieve these experiences, it’s important to look at how a brand is going to get there. “You need to reverse engineer the process: understand your customers, assess where you stand in meeting their needs, realign your organisation and establish new methods such as the “decision technology” McDonald’s is using to predict those needs,” informs Breault. But that’s only half the battle, he adds, “Having all your teams aligned to create these experiences and measure their success is just as critical.”
Also Read: Tipping the Marketing Scale on Customer Experience
The goal here to it achieve ultimate customer satisfaction by giving them what they want before even they are aware of their desire. As Jon Markman, investment advisor and senior contributor for Forbes writes in his opinion piece on McDonald’s latest tech acquisition, ‘This is a competitive advantage that’s much larger than marketing muscle. It’s the ability to influence what customers order, in real-time, across the entire network of stores.’
How this pans out for McDonald’s in the near future, we’ll know soon enough.
