McDonald’s is harnessing big data and consumer preferences to create a better experience.
In March McDonald’s bought Dynamic Yield ltd, a tech firm that helps businesses pitch consumers, for over $300 million.
The firm plans to accommodate menu choices dependent on weather, popular orders, or past orders, like an Amazon cart. Since installing kiosks and pre-order options, McDonald’s is making other buying experience more comfortable than ever.
McDonald’s plans to roll out this technology in its 37,000 stores to speed up drive-through times and expand revenue.
Other fast food companies will have to either compete or take losses if McDonald’s technology works.
Fast food companies make their most significant margin on soda and fries (close to 90 percent). They usually spend that money on expanding locations or offering more items. Most companies lose money on dollar-menus but don’t raise prices because their margin on french fries and soda hedges the initial loss.
They also upcharge on sodas and side items, like the “super-size” me option.
McDonald’s makes its money by leasing out land to franchises for a percent of the profit. The company owns about 45% of land and 70% of the buildings that house McDonald’s. 33 percent of their $24 billion revenue in 2014 derived from franchises.