McDonald's doubles down on technology, with plans to boost app and self-serve kiosk ordering

[JohnS]

Do you remember when you could walk into a McDonald's store, order over the counter with a real person, and receive your order in minutes? Seems just like yesterday? Well it, seems the self-serve kiosk and McDonald's app has changed everything, allowing McDonald's to make even more profit, yet at the same time, cause potential crippling outages, like what happened this week.

McDonald's doubles down on technology, with plans to boost app and self-serve kiosk ordering

McDonald's customers use self-service kiosks at a restaurant in Hong Kong.(Wikimedia Commons: HK McDonald's Shun Tak Centre/TaiCIWJHai King Tung/CC BY-SA 4.0 DEED)

When McDonald's first opened for business in the 1940s, its workers stood at physical counters, its burgers and fries were listed on paper menus, and its customers paid cash to its human cashiers.

Today technology so infuses every aspect of McDonald's business that it would only be a slight exaggeration to call it a tech company that happens to sell burgers.

McDonald's mobile app; its human-less, order-taking kiosks; its digitised menus that change based on trends, the weather and more; and even its generative AI — together, these enable McDonald's to eke out additional sales and efficiencies worth billions of dollars to the company, which has 40,000 locations in roughly 100 countries.

Yet that same technology can also bring McDonald's to its knees.

On Friday evening, system outages plagued McDonald's restaurants across Australia and in other countries including Japan and the United Kingdom, forcing many stores to temporarily take only cash or shut down entirely.

The company hasn't disclosed how widespread the outages were, but early Saturday morning Australian time, about 12 hours after the outages were first reported, a franchise in San Antonio, Texas couldn't accept orders in its app and wouldn't accept cash.

McDonald's said in a statement the outage was caused by an unnamed third-party provider during a "configuration change".

McDonald's Australia on Friday evening apologised to customers for the inconvenience, and added that the issue was "not related to a cybersecurity event".

Tech outage unlikely to slow new strategy

The fast-food giant did flag that something like this could happen, at least to Wall Street.

"We are increasingly reliant upon technology systems," company lawyers wrote in its annual Securities and Exchange Commission filing on February 22.

Even AI gets a warning in the filing, which states that "the artificial intelligence tools we are incorporating into certain aspects of our restaurant operations may not generate the intended efficiencies and may impact our business results".

Yet Friday's widespread outage is unlikely to bump McDonald's out of its long-term strategy to deepen its reliance on tech.

McDonald's wants to deepen its reliance on automated systems like its self-serve kiosks.(Reuters: Lisa Baert)

The company wants more customers to order through digital avenues like its app and its self-serve kiosks, which already made up a third of its sales in top markets in 2022.

In December, McDonald's announced a partnership with Google to move restaurant computer systems into the cloud, where the global scale of data will allow McDonald's generative AI system to "better understand the broadest range of patterns and nuances", resulting in what McDonald's at the time said would be "hotter, fresher food".

Generative AI already powers much of the restaurant operations and personalised pitches made from internal profiles of customers.

New tech accelerates across the board

It's not just McDonald's. Technology is the flavour of the day for virtually every major fast food chain.

Starbucks in 2019 announced its own internal AI platform, called "Deep Brew", which then-CEO Kevin Johnson said would increasingly power its personalised offers, store staffing and inventory management.

"Over the next 10 years, we want to be as good at AI as the tech giants," Mr Johnson told a retail conference in 2020, according to Retail Dive, a trade publication.

Starbucks in 2022 hired a former McDonald's executive to oversee its use of technology.

Risks from this new technology don't just come from system outages.

American burger chain Wendy's received public backlash after its CEO said during an earnings call in mid-February that the chain would soon use "dynamic pricing" on its digital signs — yet another technology that would not have been possible before the age of information.

The chain later clarified that it did not intend to use digital signs to implement "surge pricing" that could let it charge higher prices during busy times.

Rather, Wendy's said, its CEO's remarks referred to its plan to offer discounts to patrons during slow parts of the day.

Reuters

Source: https://www.abc.net.au/news/2024-03-16/mcdonalds-system-outage-technology-double-down/103596848

[Fuzz]

19 hours ago, JohnS said:

Do you remember when you could walk into a McDonald's store, order over the counter with a real person, and receive your order in minutes?

Minutes? I remember when you could order at the counter and have the burger in seconds, as they had all the burgers boxed up under the heater lamps behind the counter. Any burgers left under the lamps for 1hr were thrown in the bin. After each batch was put in the tray, they would use a metal divider to tell how long the burgers had been sitting. You could sometimes get free burgers just before closing time, as they were just chucking them out anyway. They were still doing that service model up until the late 90s.

[cnov]

McDonald's always used to and probably still are a good employer for young people, I do wonder how many jobs they can take away from an area before they start shooting themselves in the foot. We see it time and time again, these companies already make huge profits while still employing people yet they're always prescribing to scalp further in an endless chase of higher profits, at what point will companies realise that they actually need to put something back in if the system is too work properly. Putting money in people's pockets is an important part of business, if everyone left that upto other people to do, no one would have any money.

[PigFish]

… this is what you get when governments label minimum wage as a living wage and legislate pay for more than the labor skill is worth.

Governor Gavin Newsom today signed legislation increasing the minimum wage for fast-food employees to $20 per hour, beginning April 1, 2024

…. And this is old news!

Some idiot in my state tried to buy her way into a senate seat by suggesting minimum wage should be set at $50 USD.

[ha_banos]

Sainsbury's here in UK just had a contactless payment outage for a day yesterday. Branches had someone at the door intercepting and trekking everyone that walked in. Banks here occasionally have systems failures that impact everyone. Not being able to order mcd for a day? Hidden blessing!

 

https://www.telegraph.co.uk/news/2024/03/16/sainsburys-hit-technical-issues-deliveries/

 

When the cigar forums have a day out I'm at a complete loss!

[MC4]

14 hours ago, PigFish said:

… this is what you get when governments label minimum wage as a living wage and legislate pay for more than the labor skill is worth.

Governor Gavin Newsom today signed legislation increasing the minimum wage for fast-food employees to $20 per hour, beginning April 1, 2024

…. And this is old news!

Some idiot in my state tried to buy her way into a senate seat by suggesting minimum wage should be set at $50 USD.

 

*** Excluded from $20 per hour minimum wage, are businesses that sell bread 😉

[theTXpanda]

If they are going to go all in on tech, the tech could at least be better. Out of all of the mediocre food store apps that I use, McDonald's is far and away the worst. Just brutal to use. 

[BrightonCorgi]

What's odd I find is how much McDonalds advertises in UK compared to US. I see constant ads on UK TV, yet hardly any American TV ads for McDonalds. It's only Wendy's & Burger King that advertise with a regular cadence here.