McDonald’s; from Big Mac to Big Data

  • On March 29, 2019

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McDonald’s has made a significant investment in its technology. The Chicago-based fast food chain better known for producing the Big Mac than big data, announced yesterday that it would be purchasing the personalization specialist company, Dynamic Yield, for a reported $300m. 

The purchase, McDonald’s biggest in 20 years, is strategically significant as the company turns to big data to gain an advantage over its rivals in the highly competitive fast food business. Personalization has become a “consumer need” expressed through personalized content and messages highly relevant to individuals, what they are doing and the context in which they are doing it. McDonald’s which serves approximately 68 million customers every day and has 38.000 outlets worldwide, claimed their acquisition of Dynamic Yield would make them “one of the first companies to integrate decision technology into the customer point of sale at a brick and mortar location.”

Founded seven years ago as a “decision-logic” start-up, Dynamic Yield works to help customer-centric brands to make personalization a core activity.  Personalization is about mastering data and Dynamic Yield provides brands with an algorithmically driven personalized online experience at every customer touchpoint (web, apps, email, etc.).  Brands are able to adapt their marketing messages and product recommendations in ways that will improve the customer experience. 

McDonald’s digital transformation

The acquisition of Dynamic Yield is the latest in a series of significant tech-focused investments that McDonald’s has made over the past few years as the company recognizes the need for fast-moving consumer goods companies (FMCG) to reinvent themselves. Other initiatives have included self-order kiosks, mobile order and payment and delivery via Uber Eats. 

dynamic-yield
Source: Martech Zone

What McDonald’s gains in acquiring the Dynamic Yield’s platform data management capabilities is the ability to link all their other technological advancements together as the Chief Executive of McDonald’s, Steve Eastbrook explained in an interview with Wired, “What we hadn’t done is begun to connect the technology together, and get the various pieces talking to each other. How do you transition from mass marketing to mass personalization? To do that, you’ve got to unlock the data within that ecosystem in a way that’s useful to a customer.”

The fact that McDonald’s is not simply investing in technology that facilitates personalization in a typical vendor approach but is going so far as to acquire Dynamic Yield and bring all the data management capabilities that the company offers in-house, demonstrates the level of commitment to personalization. 

Initially, McDonald’s is planning to use the personalization technology in its drive-thru menu in the US before moving into international markets.  The new technology will also will integrated into other digital products such as the self-serve kiosk and the McDonald’s mobile app. 

Personalization in practice

Currently when a customer drives up to place an order at McDonald’s, there is a digital display with a static selection of banner items or promotions and as the customer gets nearer to the ordering area, the full menu appears.  With Dynamic Yield’s technology, these displays will Dynamic Yield’s personalization technology will be used to customize McDonald’s menu displays to incorporate suggestions based on variables such as the weather and time of day.  For example, it might suggest Sausage McMuffins in the morning and McFlurry ice creams when the weather is hot.  The technology will also be used to analyze how the drive-thru is flowing and switch the menu to show items that can be prepared quickly when there are a lot of customers or show more complex items that take longer to prepare during quieter periods.

McDonalds-Brand

Developing a personalization strategy

McDonald’s acquisition of Dynamic Yield illustrates a larger trend towards brands acknowledging the immense value of customer data and how it can be analyzed into actionable items that will both improve customer satisfaction and drive profits. Understanding segmentation, data and marketing automation is important in the development of an effective personalization strategy. 

At the eBusiness Institute we have extensive experience of working with clients on data assessments, using their available data to design a “data roadmap” that will help them to make the strategic decisions that will take their business from where it is now to where they want it to be in the future. Contact us for more information about data assessments.

 

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