How important is it for CFOs to recognise the challenges of more empowered consumers in the digital world?
The digital revolution presents new challenges for businesses and it’s never been clearer that if you do not innovate at pace, you will ultimately become a victim of disruption. Technology has unlocked possibilities and has given greater power to consumers but this means that their expectations of brands has increased.
This is no bad thing, but it does mean that CFOs and finance teams are even more vital partners to business. We must ensure that investments are made where they matter most and with speed. We also need to ensure that agility is combined with stability; avoiding the tendency to be a ‘magpie’ when it comes to new investment and grounding everything in what customers actually want.
How important is it for companies like McDonald’s to understand and engage with customers?
Most businesses would say they are customer-focused or customer-led. At McDonald’s, we are utterly obsessed with understanding what our customers want from us. The key message we hear is that they don’t want a different McDonald’s, they want a better McDonald’s. That means great tasting food served by great people in great new restaurant surroundings. Grounding everything in what the customer wants keeps us stable. From there, we can respond with agility to specific challenges.
McDelivery is a classic example. We talk to our customers regularly and last year there was a clear demand from people in cities across the UK, from London to Edinburgh, that they wanted to be able to enjoy our food delivered straight to their doors. We responded with agility by launching a tie-up with UberEATS last June. It’s going from strength to strength and we’ve already served over 1 million unique customers, from just 270 trial restaurants.
Our menu is also constantly evolving in line with flavours and ingredients that our customers up and down the UK tell us they enjoy. For example, in February we enhanced our McCafe range with the launch of Flat White. It has proved incredibly popular, with over 25 million cups sold so far. Whilst we weren’t the first off the mark, we moved when our customers told us they were ready, and not before.
How can increasingly sophisticated technology provide vital insights for understanding consumer behaviour?
We have 1,270 restaurants across the UK and are proud to serve over 3.7 million customers every day. This inevitably means we can glean fantastic insights, enabling us to respond to customer demands with confidence.
Whether it’s the digital kiosks in our restaurants, our Click and Collect app or ordering McDelivery with UberEATS, we are only just starting to look at how we can use data and technology to build deeper relationships with our customers so they can benefit from more personalised interactions.
Providing ultimate convenience is the ambition that drives innovation in the business so I’m excited at the opportunities such insights present.
What investments has McDonald’s made in this area? What process did you undertake to make sure the right tools were put in place?
We’re over 80% of the way through Experience of the Future, a multi-million pound restaurant transformation programme that puts new technology at the heart of our restaurants, including self-order screens digitally linked to redesigned kitchens. We only began this transformation process after extensive testing with customers, suppliers and franchisees to make sure it worked and it has. Experience of the Future is an update to the operating system of our restaurants for the long term, allowing us to continue to develop and keep pace with what our customers demand. This is a classic example of stability enabling agility.
Who would have thought that at McDonald’s you would be able to take your time browsing the menu on a touch screen and then take a seat and have your food served at your table. The investment in Experience of the Future has unlocked this opportunity and our customers love it
How have the insights created driven how food is prepared and served to customers?
The key insight we’ve drawn from Experience of the Future isn’t anything new: for our customers, it’s all about choice. This is what grounds our business – it is the stability that underpins our ability to then be agile.
What is different and really powerful with Experience of the Future is how we are giving customers that choice. Self-order screens allow our customers to swipe through our entire menu easily and at their own pace. Not only does this take some of the stress away from ordering but we’re seeing increasing numbers try new food rather than revert to their default order as they might have when queuing at the counter. We can see this in the number of people who, for example, are choosing to swap from a Classic Coca-Cola to a Zero Sugar variant, because our screens display these more prominently.
What role did finance play in these processes?
The idea of a job in finance can conjure up certain stereotypes but my team is uniquely McDonald’s. We spend a lot of time out of the office, travelling across the country to meet with customers, franchisees and suppliers, learning as much as we can about them so any moves the business makes are grounded in what they want.
Whether it is upgrading our estate to Experience of the Future or rolling out McDelivery across the UK, the finance team are critical advisors on these projects from concept to delivery.
John Park became CFO for McDonald’s UK in 2016, and is responsible for finance, supply chain and legal oversight. he joined McDonald’s UK in 2003 as an Assistant Operations Accountant and progressed to roles inckuding Regional Accounting Manager, Franchise Finance Manager and Head of Commercial Finance before becoming Finance Director.
Hear him reveal the role of Finance in transforming McDonald’s food preparation and service through embracing digital technology at CFO Agenda: https://www.thecfoagenda.com/