McDonald’s continues to invest in and roll out next-gen technology across the globe. The global QSR is making short order of rolling out Dynamic Yield’s machine learning technology that makes suggestions based on time of day, weather and popular menu items. It is now in 9,500+ U.S. drive-thrus with full roll out to all U.S. and Australian outdoor digital menu boards by the end of the year.
This is just the beginning. McDonald’s plans to roll out additional uses for Dynamic Yield’s technology after acquiring the company earlier this year. “We're scoping future deployment for additional markets and applications, eventually including kiosks and our global mobile app,” said CEO Steve Easterbrook in an earnings call with analysts. “Ultimately, Dynamic Yield will facilitate a range of personalization benefits, where we can leverage knowledge of the customer, and order patterns to provide a tailored experience in restaurants, at the drive-thru and on our app.”
Digital menu boards play a major role in experience of the future (EOTF) concept. About 9,000, or two-thirds of all U.S. locations, have been upgraded.
“When we launched our velocity growth plan in 2017, we committed to three such new customer experiences, which we call our growth accelerators; experience of the future, digital and delivery,” said CEO Steve Easterbrook in an earnings call with analysts. “That’s all about giving customers more control over how they order, how they pay and how they receive their food.
“Through our EOTF deployments, we've created more inviting dining environments, easier and faster ordering, and greater hospitality with guest experience leads focused on serving our customers' needs. These efforts are clearly connecting with guests.”
The average franchisee has seen 11 consecutive months of cash flow growth through September and is expected to continue, he explained.
A full earnings report is available here.
Investing in Voice Ordering & More
The global QSR recently created McD Tech Labs, which was fueled by its September acquisition of Apprente and its voice ordering tech.
“Apprente’s talent and technology comes with the promise of more efficient and accurate ordering at the drive-thru and a better experience for our customers. At the same time, we expect the technology to reduce complexity for our crew,” said Easterbrook.
Delivery too is a growing segment for McDonald’s and is now available from 23,000 restaurants in over 80 countries. Customers are placing 10 McDelivery orders per second on average globally.
For 2019, the QSR expects delivery to drive $4 billion or roughly 4% of global system-wide sales -- that's up from $1 billion just three years ago.
“McDelivery global average check remain steady at two times the average restaurant check,” said Easterbrook. “Year-over-year, we continue to see double-digit or higher McDelivery comp sales increases across many of our major markets.”
In the U.S. markets where it introduced DoorDash as an additional delivery partner, McDonald’s saw an increase in average restaurant McDelivery orders, Easerbrook said. Overall the QSR is bullish on delivery. “As we add new delivery partners globally to reach new customers, we're also keeping pace with an evolving delivery ecosystem. Delivery remains a big frontier for our business, and we still have a long way to go even with our existing customers to encourage awareness and trial,” he added.
“We are confident there's plenty of road ahead for success with McDelivery.”
With the recent acquisitions of Dynamic Yield and Apprente on the books, a couple of analysts asked if the brand was investing too much in tech.
“Our intent is to set ourselves up for sustainable long-term growth,” said CFO Kevin Ozan.”And that's why we're investing in technology today. Our belief is those who aren't investing in technology, at some point will be behind and will need to catch up. And we'd rather be a little bit ahead of the curve and spend the right amount that we think will drive future growth.”