Dive Brief:

• McDonald’s is pairing its trove of customer data with machine learning to power its digital ecosystem and fuel improvements to the customer experience, according to executives on an investor update call last week.
• Key initiatives include improving its loyalty app and accelerating the rollout of generative AI in stores to make ordering more convenient for customers.
• “As more and more customers — literally hundreds of millions — join our digital ecosystem, our pricing tools get sharper, our AI models get smarter, our restaurants become easier to operate, and most importantly, the overall customer experience improves,” CEO Chris Kempczinski said during the call.

Dive Insight:

With its new focus on better aligning its data and restaurants, McDonald’s is aiming to create a “virtuous cycle of improvements to the customer experience,” according to Joe Erlinger, president of McDonald’s USA. Data can be used to drive more visits, he said, which can in turn provide even better data.

Information from physical stores and the McDonald’s loyalty program will contribute to this strategy, according to Kempczinski. The company operates more than 40,000 restaurants, and more than 150 million people used its app in the past 90 days alone. 

“As all of you know, digital and tech are inherently a scale game,” he said. “McDonald’s superior scale means that we can build capabilities at a pace and cost that no one else in our industry can match.”

The restaurant chain is already seeing results from this strategy in rising customer satisfaction levels, according to Kempczinski. In the past 12 months,  100 million customers registered with McDonald’s mobile app in its 50 largest markets.

Another major avenue for improvement will be greater personalization, with machine learning grouping customers into specific categories to offer more relevant promotions, according to Jill McDonald, EVP and president of international operated markets. 

“This will enable us to personalize with even greater precision by looking at thousands of customer cohorts where we used to have less than 10,” she said.

This process is in its early stages but is expected to boost loyalty member engagement even more.  McDonald’s U.S. loyalty customers already visit 15% more frequently than non-loyalty members, according to Erlinger. Loyalty members also spend nearly twice as much compared to others in the U.S. and Canada.

Future plans include access to exclusive merchandise, special media content and gamified experiences. Additionally, the company will expand integrated orders to all markets globally with the goal of reaching 30% of all orders placed through the loyalty app.

“Our confidence in driving the growth of integrated delivery comes from our overwhelming success in driving digital adoption,” Erlinger said. “It also comes from the many ways we are making the McDonald’s experience better and more convenient for our loyalty customers.”

McDonald’s is also partnering with Google to build a technology platform that will drive an improved restaurant experience, according to Global Chief Customer Officer Manu Steijaert. This will enable more consistent experiences through the use of generative AI.