How McDonald’s Is Using Data, Machine Learning, and AI to Accelerate Growth

May 31

“Our acquisition of Dynamic Yield has brought us a lot of excitement,” says McDonald’s CEO Steve Easterbrook. “Very simply put, in the online world when we’re shopping and we pick an item and put it into our shopping basket, any website will automatically suggest two or three things to go along with it. We’re the first business that we’re aware of that can bring that into the physical world. It’s really just taking data and machine learning and AI, all these sorts of technical capabilities.”

Steve Easterbrook, CEO of McDonald’s, discusses how the company is using technology to elevate the customer experience and accelerate growth in an interview on CNBC:

Continue To See How We Can Elevate the Customer Experience

As we’ve executed the growth plan we’ve spent the first two years, three or four years ago, turning the business around. Now we’ve had a couple of years of growth. We’re confident now that we’re beginning to identify further opportunities to further accelerate growth. That takes a little bit of research and development cost. It means you’ve got to bring some expertise into the business to help us do that. We’re still managing to effectively run the business. G&A is staying the same and we’re putting a little bit more into innovation.

We continue to see how can we help continue to elevate the experience for customers. With this pace of change in the world and with different technology and different innovations, whether it’s around food, technology, or design, we’re seeing opportunities that we think can either make the experience more fun and enjoyable or smoother for customers. If we can find that we’re going to go hard at it.

We need to continue growing. If where we are investing that money is helping drive growth across 38,000 restaurants then I think the shareholders and investors would be satisfied. We want to bring our owner-operators along with us as well. They’re investing their hard-earned dollars so that always means we got a business case. The owner-operators will want to see a return on their investment just the same as a shareholder would. We’ve got a wonderful check and balance in the system to help us make sure we spend that innovative money in the right way.

Using Data, Machine Learning, and AI to Accelerate Growth

Our acquisition of Dynamic Yield has brought us a lot of excitement. It was our first acquisition for 20 years. It was an acquisition in a way that was different from the past. It wasn’t looking at different restaurant businesses to try and expand our footprint. It’s bringing a capability, an IP and some talent, into our business that can help us accelerate the growth model. We completed the deal mid-April and within two weeks we had that technical capability in 800 drive-throughs here in the U.S. It’s a very rapid execution and implementation.

Very simply put, in the online world when we’re shopping and we pick an item and put it into our shopping basket, any website we’re on these days will automatically suggest two or three things to go along with it. People who buy that tend to like these things as well. We’re the first business that we’re aware of that can bring that into the physical world. As customers are at the menu board, maybe they’re ordering a coffee and we can suggest a dessert or they’re ordering a quarter pounder with cheese and we can suggest making that into a meal. It’s really just taking data and machine learning and AI, all these sorts of technical capabilities.

Mining All of the Data Will Improve the Business

The best benefit for customers is we’re more likely to suggest things they do want and less likely to suggest things they don’t. It’ll just be a nicer experience for the customer. But yes, for the restaurant itself, because we can put our drive-thru service lines in there, for example, the technical capability by mining all of the data will be to suggest items are easier to make at our busier times. That’ll help smooth the operation as well. The immediate result will be some ticket (increases). But frankly, if the overall experience is better customers come back more often. That’s ultimately where the success will be, driving repeat visits and getting people back more often.

Across the entire sector, traffic is tight right now and people are eating out less. They have been progressively eating out less for a number of years. Whether it’s the advent of home delivery, for example, which is something we participate in, but at the moment it’s just a little bit tight out there. It’s a fight for market share. Anyone who is getting growth, typically it’s because they’re adding new units. People are finding it hard to (increase) guest count growth. It’s something that we have stated as an ambition of ours. We think that’s a measure of the true health of the business. Last quarter, we did grow traffic and we’ve grown traffic for the last couple of years, but only modestly. We want to be stronger than that.

How McDonald’s Is Using Data, Machine Learning, and AI to Accelerate Growth

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