What’s Cooking in the McDonalds-Telstra Partnership?
McDonald’s has selected Telstra as its digital transformation partner and will pay the telco giant a whopping $90 million for rewiring the fast food retailer’s internal IT network. ‘Maccas’ wants Telstra to kit out their 850 restaurants in the country with fibre optic network cabling that will benefit both customers and staff – dramatically improving the McDonald’s dining experience. Here’s some inside scoop on this ‘Big Mac’ size Happy Deal.
McDonald’s IT Headache
McDonald’s might have been upgrading their menus, but their IT systems have been falling behind. Whether it is record keeping, talking to head office or letting customers browse the Internet while enjoying a burger, their IT standards in Australia have just not kept up. McDonald’s systems still run on ADSL networks at least a decade old and unbelievably for a fast food chain of that size, they are yet to harness the power of cloud computing to its maximum potential.
The digital era is transforming retail, and it is not just McDonald’s, but the entire food industry that is lagging behind. Digital technology has put the power firmly in the hands of consumers who expect more convenience and a deeper connection with their favourite restaurants. Some of the ways that customers now engage with food businesses include:
- Posting food snapshots and photo reviews on Instagram. One yucky image could destroy the company making the art of food presentation much more critical.
- Reading and writing reviews on restaurant review websites like Zomato and Yelp.
- Wanting to order meals at the click of a button.
- Expecting home deliveries from UberEats and Deliveroo. Restaurants that don’t partner with these delivery services lose out on good business.
- Online menus, ability to save food favourites or ability to check food ingredients online is something that customers expect as standard service now.
Digital focus and development in parallel with food innovation are key for a food business to thrive in today’s world.
Leading the way in digital transformation
McDonald’s wants to enhance its ability to bring speed, scalability and disruptive innovation across its restaurant and digital technologies, aiming to transform customer experience through greater convenience and personalisation. They are partnering with multiple IT giants, including Capgemini, Publicis.Sapient and Telstra to help them digitise the food business.
Most McDonald’s outlets in the US now feature in-store touchscreen kiosks, mobile charging docks and table service. Early this year, McDonald’s announced a trial partnership with UberEats in the UK, making its menu available for home delivery in London, Nottingham and Leeds. Their US mobile app, launched in 2015 has seen a major overhaul and is quite popular with 11 million registered users. But there is plenty of work that still needs to be done, especially since much of the digitisation has been limited to the US, while McDonald’s is a global brand operating in 119 countries today.
Plans for the future
One key area that McDonald’s hopes to overhaul are its backend systems. Capgemini is known for its internal operations and IT management, and McDonald’s is seeking this expertise to improve productivity. These internal tech updates will go hand in hand with data analysis. While McDonald’s is a retail estate-led business, customer data is the thing that matters these days for understanding how customers work and what they’re buying.
When you think about how much big data is coming from several different sources — sales, Wi-Fi, Facebook, loyalty information, promotion – the key to understanding then becomes personalisation and differentiation. Successful businesses need to have the ability to identify trends and use predictive analysis to actually understand what the customer is going to do in-store, determine different triggers to develop growth and ultimately get to that point where they can truly predict and understand behaviour.
For such quality data analysis, McDonald’s entire customer-facing technology needs to integrate seamlessly with backend operations. This is no mean task given the wide range of digital features they now offer, ranging from in-store kiosks to the mobile ordering app. Publicis.Sapient, an advertising and technology company, will play a key role in improving this area. They will focus on the consumer-facing aspects – CRM, the customer journey and mobile app, improving the overall McDonald’s experience.
Telstra brings infrastructure to the table
Within Australia, Telstra will provide the underlying infrastructure needed to bring all these plans to fruition. Telstra will roll out a brand new fibre network to all 850 McDonald’s outlets in the country – creating an umbrella network that provides customers with a connected brand experience and operators with an efficient IT systems. At the same time, they will migrate McDonald’s legacy PSTN (Public Switched Telephone Network) to TIPT (Telstra’s IP Telephony).
TIPT is a fully managed cloud service providing medium and large enterprises with a unified communication solution supporting voice, video, messaging, mobility, and collaboration. McDonald’s is planning to use TIPT for such applications as enabling video conferencing and collaboration between head office and individual stores.
This deal is also the biggest one for Telstra’s wi-fi network – Telstra Air. Hundreds of McDonald’s stores in addition to 35 Ronald McDonald Houses across the country will become new wi-fi hotspots, allowing customers to freely surf the Internet while enjoying their happy meals.
The upgraded infrastructure roll-out is expected to take 24 months with customers likey to enjoy the benefits in many places as early as next year.
Win-win for everyone
Whenever key businesses undergo digital transformations, customers always gain. For example, the last innovation by McDonald’s in Australia saw the launch of “Create Your Taste” Kiosks in collaboration with Intel. These kiosks let customers choose their ingredients in their burger, and the concept became widely popular in Australia. Customers had greater control over quality, more choice and the ability to customise the meal to their preference – all at the touch of a button.
While customers enjoyed more favourite meals, McDonald’s sales skyrocketed. These kiosks also gave the company access to better customer data, helping them understand and meet customer expectations. This is a win-win for everybody.