How the worlds largest restaurant chain has been using technology and data to increase speed, profit, reduce labor & increase sells
McDonald’s Corporation is an American fast food company, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a hamburger stand, and later turned the company into a franchise, with the Golden Arches logo being introduced in 1953 at a location in Phoenix, Arizona. In 1955, Ray Kroc, a businessman, joined the company as a franchise agent and proceeded to purchase the chain from the McDonald brothers. McDonald’s had its original headquarters in Oak Brook, Illinois, but moved its global headquarters to Chicago in June 2018. — Wikipedia
McDonalds grew it’s business on it’s frozen treats, burgers, and fries. The companies menu continues to bring McDonalds success today, but technology is playing an increasing role in McDonalds effort to make their customers happy, reduce costs and stay ahead of the competition.
McDonalds Introduces Kiosks in 2015
Say bye to the many smiling cashier faces at McDonalds and say hello to bright LED screens. In 2015, McDonalds introduced self-service ordering kiosks to its restaurants. McDonalds says their employees won’t be replaced by these kiosks but rather their cashier employees will be moved to another part of the McDonalds business. As of 2020, self-service ordering kiosks will be implemented at all U.S. McDonald’s locations. Bringing in kiosks to replace cashiers will improve the restaurant efficiency and reduce costs, now the company no longer needs to pay a cashier for labor and the customers order is exactly what the customer input, but having kiosks comes with one major down fall, one that I am sure will be resolved in the future.
The kiosks are good for McDonald customers that want to pay for food by means other than cash, but the majority of McDonalds customers pay for their food using cash. About 40%-60% of McDonalds customers use cash. The then Chief Executive Officer (CEO) of McDonalds from 2015–2019 Steve Easterbrook said that diners usually spend more when ordering via kiosk, and said in July 2015 that 40% of in-store customers used a kiosk in Australia and major European markets showing that customers aren’t opposed to using them.
McDonalds Buys Tech Company Dynamic Yield
Dynamic Yield is a technology company that provides digital customer experience services to businesses. Dynamic Yield’s decisioning engine uses machine learning and predictive algorithms to provide personalization, recommendations, automatic optimization, and one-to-one messaging.
Dynamic Yield uses predictive analytics & machine learning to display food options onto McDonalds outdoor digital drive-thru menu based on the weather, time of day, trending menu items, and current restaurant traffic. This allows McDonalds to create a more personal experience for their customer. What’s even more interesting is that it can suggest other products to customers as add on items based on what the customer menu item choice is, basically up selling the customer. The outdoor digital drive-thru menu boards that Dynamic Yield created allows customers to make faster decisions, which helps the drive-thru line move quicker. In fact McDonalds improved its drive-thru service time by about 28.9 seconds, making its average drive-thru service time a mere 5.822 minutes.
This new technology is in approximately 700 United States restaurants, but McDonalds has plans to put this technology in 8,000 locations in the near future and plans to have this in close to 100% of the drive-thrus in the United States and Australia.
Dynamic Yields digital board with McDonalds recently forced menu simplification (as both staff and food supplies were not plentiful as before) has brought more success to the restaurant.
If you want to learn more about predictive analytics then I suggest reading Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die by Eric Siegel. In this rich, fascinating — surprisingly accessible — introduction, leading expert Eric Siegel reveals how predictive analytics (aka machine learning) works, and how it affects everyone every day. Rather than a “how to” for hands-on techies, the book serves lay readers and experts alike by covering new case studies and the latest state-of-the-art techniques.
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