McDonald's Boosted Its Orders by 20%

Imagine those days when going to McDonald's has tiresome expressions 😔 on your face with its long waiting lines and time-consuming staff process to get your takeaway packed.

But the other day, I was grabbing my usual breakfast at McDonald's (you know, those perfectly crispy hash browns are my weakness) 😋 

I couldn't help but notice how much smoother the whole experience has become. Gone are the days of long lines and rushed orders.

So, how did McDonald’s outgrow its old system? Let's find it out.

Executive Summary

McDonald's Corporation, founded in 1940, is one of the world's largest fast-food chains, operating over 38,000 restaurants across more than 100 countries.

The company serves millions of customers daily, offering several menu items, including burgers, fries, salads, and beverages.

In response to the rapidly evolving fast-food industry, McDonald's focuses on digital transformation to stay competitive and meet the changing demands of its customers.

The company saw that technological advancements and shifting consumer behaviors were reshaping the industry, particularly speed, convenience, and personalized experiences.

To address these trends, McDonald’s launched a strategy for integrating digital tools into its operations, aiming to improve customer experience and operational efficiency. The success of this strategy was clear in the measurable outcomes.

Problem Faced

As customer expectations evolved, McDonald's traditional service model, which relied heavily on counter staff and manual processes, began to show signs of strain.

Customers expected quicker service, but the existing model resulted in longer wait times during peak hours, leading to frustration and potential loss of business.

Additionally, the company struggled with maintaining consistency in service quality across its global locations, a challenge compounded by the high employee turnover typical in the fast-food industry.

Internal data revealed that wait times could exceed 5 minutes during peak times, significantly higher than the 3-minute industry standard.

This impacted customer satisfaction and reduced the number of customers served per hour, directly affecting revenue.

To tackle these challenges, McDonald's implemented several digital solutions, to reduce service times, enhance customer experience, and increase average order values.

Solution

To address these challenges, McDonald's rolled out an all-around digital transformation strategy, focusing on three key areas: self-service kiosks, mobile ordering, and an upgraded POS system.

Self-Service Kiosks

McDonald's raised interactive kiosks in over 25,000 locations, allowing customers to place orders themselves.

The kiosks featured an intuitive interface that guided customers through the menu, offered to upsell options, and allowed for customizations.

This reduced the burden on counter staff and led to a 20% increase in average order size, as customers were more likely to add extra items without feeling rushed.

Mobile Ordering

To cater to the growing number of mobile users, McDonald's launched a mobile app that enabled customers to place orders in advance.

The app included personalized deals, a feature that contributed to a 15% increase in repeat orders.

Integration with the POS system ensured that orders were ready by the time customers arrived, further reducing wait times.

Upgraded POS System

McDonald's upgraded its POS system to ensure seamless integration with the new digital tools.

The new system was faster, more reliable, and capable of handling the increased order volume from both kiosks and mobile devices.

This upgrade reduced transaction times by 10%, ensuring faster service and fewer errors.

Results

The digital transformation delivered significant benefits for McDonald's, both in terms of customer satisfaction and operational efficiency.

• Increased revenue: Introducing self-service kiosks and mobile ordering led to a 7% increase in overall revenue within the first year. The 20% increase in average order size at kiosks was a key contributor to this growth.

• Improved customer satisfaction: The reduction in wait times, especially during peak hours, led to a 15% improvement in customer satisfaction scores. The personalized experience provided by the mobile app also contributed to increased customer loyalty.

• Operational efficiency: With the upgraded POS system and reduced reliance on counter staff, McDonald's served more customers per hour, increasing throughput by 10%. This efficiency gain also helped reduce operational costs by 5%, as some staff were needed during peak hours.

• Return on Investment (ROI): The investment in digital solutions paid off quickly, with McDonald's achieving a full return on investment within 18 months. The long-term benefits included sustained revenue growth, enhanced brand loyalty, and a stronger competitive position in the fast-food industry.

Conclusion

McDonald’s digital change is an example of how adopting technology can significantly improve customer experience and drive business growth.

McDonald’s simplified operations and increased revenue and customer satisfaction by focusing on customer needs, leveraging data, and investing in scalable solutions. This journey highlights the importance of adaptability and continuous innovation in maintaining a competitive edge.