Data can build better businesses.
‘Data has a better idea !’ When data is used properly it can be converted into insights which, in turn, can be converted into power
Data built better businesses
The existence and usage of data offer limitless opportunities and improvements to our society, empowering individuals who have data and exploit them, and offering many benefits to businesses. As a result, our society is a “data-driven” society the data control almost every human action. Nowadays, the number of businesses that use data in their services that they offer to their existing and new clients has increased. Companies have changed their business models to use personal data to focus on the individual’s consumer’s needs. Multinational companies in different sectors have focused on that trend. Social media, web searching, and stores and services sectors use the data with tremendous result improving their services, revenues, and user experience. McDonald’s is a company that has achieved great results.
How McDonald’s Uses Data.
McDonald’s is embracing modern technology in many ways, using Machine Learning and AI to collect and analyze the data that they collect from their customers in an optimal way improving their services and interaction with users. The daily traffic of McDonald’s customers reached almost 60 million in over 100 countries. Japanese McDonald’s customers who use the mobile app to order spend 35% more than the users who don’t use it.
Twenty years ago, if you wanted to order a meal, you had to go to the store. You ordered and then you waited to take it. Later you could order on the phone waiting a couple of minutes online. Nowadays, technology has transformed that type of service, customers can use mobile devices and apps that allow to them to order and pay in a few seconds.
Food companies have the same accessibility to our habits as they did in the past. Digital transformation has improved the ability of companies to collect data in a more efficient way. Mcdonald’s uses the data to suggest side dishes with our main meal, which can be combined according to our habits. Chain restaurant companies can translate the collected data to design and offer new products according to our preferences. Furthermore, Mcdonald’s can use the data in order to roll out a better marketing strategy against their competitors, offering a competitive advantage. Mcdonald’s uses data to optimize food delivery. Predicting customers’ needs and ensuring that they have sufficient inventory for popular menu items, adequate staffing, and on-time deliveries drive them to ongoing customer satisfaction. Without these assurances, the company was concerned about losing control of revenue and consumer brand loyalty. The use of data can create an enormous value for McDonald’s to make decisions.
Data Privacy is Imperative
Technology and data hide dangers and simultaneously offer many benefits for customers. Each coin has two sides. The consequences of Mcdonald’s having data on users depend on customer personality and how intensively they use the applications in their everyday lives. Mcdonald’s gather human eating habits from their customers who use mobile apps to optimize customer’s experience. That data comes from customers, but the same time data belongs to Mcdonald’s because orders are delivered by them. Mcdonald’s collects and analyzes data to offer personalized services to their customers. Customers choose Mcdonald’s because the business understands their needs. Customers want personalized services according to their preferences and needs. The main issue of customers is that they do not have time to spend looking for other new companies and products when they feel happy about their services. Personalized services make the customers choose specific providers. Companies use the data to personalize their promotions to their clients for products they used in the past.
Data ethics is a serious issue for the most companies. Ethics enclose the moral obligations of gathering, protecting, and using personally identifiable information and how it affects individuals. Ethics issues are stimulated when companies violate ownership, transparency, privacy, intension, and outcome. Food chain companies especially do face ethical issues. They use the data with intention to offer personalized experience to users, design new products and promote their services. If they keep the data private and the outcome of offering services is only for the benefits of customers, Mcdonald’s is not aroused serious issue. Second thoughts are aroused when the Mcdonald’s use the data to suggest side plates, drinks and snacks to their customers. That has driven the increase of revenue and customers to buy things that they do not want.
Final thoughts
AI and data are helping McDonald’s bring together supply and demand. By personalized recommendations to customers, the fast-food sector has created an innovative way of tracking its needs and promoting key products.
The extensive use of technology has driven the new generation to share their data easily. Using mobile apps to make an order, we accept that we share our data with the service provider. We cannot reject the benefits which the technology and data are offered to us and businesses, but at the same time we ought to be a little skeptical about the data we share with the service providers because we do not know how they can use it in future where they store it.
Thanks for the post Dimitrios, I really enjoyed it. It’s fascinating to read and understand all the data that companies are collecting on you that you may not even realize. One thing this post is your mentioning of data privacy. This semester I’m taking a class on Differential Privacy which has become the new “gold-standard” for data privacy. In your research did you come across any discussion of McDonald’s providing data to third-party companies? It would be interesting to see because I imagine there is a lot of value in the data they collect on us, but I also imagine that the primary parties interested in that data would be competitors of McDonalds. If they do release or sell our data in any form I wonder if they employ any rigorous differentially private algorithms on our data to ensure our privacy.
Hi Dimitrios,
This is an insightful article, which shows how one of the largest fast-food chain restaurants utilizes big data to drive commercial decisions and delight a customer. As I read the article, I thought about a massive opportunity for McDonald’s to become a more effective and profitable business – some of which you related to in your blog. It was fascinating to learn how the company can better source quality recipes and foods if it works with data. Furthermore, the massive challenge of effectively managing a complex supply chain becomes easier; beyond what you mentioned, I think it can also help minimize waste and bring products at scale appropriate to local demand. This in and of itself can have secondary effects on customers e.g., you are now running a greener and more sustainable business aligned with the global agenda of reducing greenhouse gas emissions and protecting natural environments – and it matters to all parents and kids that flock to McDonald’s establishments all over the world. Over time, use of big data becomes the secret sauce of competitive advantage for the chain, because it translates into a tighter customer value proposition in form of better-quality menus, and attractive pricing due to leaner and more efficient operation. Finally, you touched upon people’s analytics in your article i.e., adequate staffing across numerous restaurants McDonald franchises. In my blog I talked about difficulty of building people analytics teams at mature corporates – I think it may be interesting for you to check out if you find time, because there seems to be a secret sauce to that also. According to McKinsey: most successful companies had one thing in common i.e., “rather than relying on generalist data science skillsets, [most successful] companies leveraged subspecialities including “natural-language processing, network analytics, and quantitative psychometrics,” and linked their work to strategic corporate objectives.” So the team that is behind of what you described in your article, may not necessarily be the one to run peoples analytics function at McDonalds if the company understood benefits of integrating a specialist data science skillset within its HR function.