How McDonald’s Japan utilized technology to optimize the customer experience in-store

Published on July 26, 2020

An introduction to McDonald’s Japan’s Plexure-developed mobile order and pay solution

In a recent virtual fireside chat, Plexure hosted McDonald’s Japan VP of Digital Marketing, Raphaël Mazoyer and discussed customer engagement through digitally enabled service, content personalization and mobile ordering.

Below is a summary of the great insights and takeaways from our talk with Raphaël. Or, you can find the recording of the entire webinar here.

Q: Tell us a little bit about your mobile order and pay program and how it was first launched?

Raphaël Mazoyer, VP Digital Marketing, McDonald’s Japan:

For the last 17 years, McDonald's Japan has been working on consumer-facing digital activities that enhance the store experience and build more business.

Today, we’re talking specifically about the launch earlier year, of an upgrade to our main mobile app, which is used by a very large proportion of the population. As a matter of fact, it was the first brick and mortar app in the Japanese market in terms of usage, as measured by Nielsen. The app is number 10 on the list of most used apps, and the other nine are all pure play digital actors. In fact, it dates back to the work we've done with Plexure since 2014.

In March, we enhanced the app (which was originally focused on offers) to bring mobile order and pay into the scope. We’re going where the consumers are, and just allowing them to interact with the McDonald's brand, in the way that is relevant to them. So, it's been super encouraging.

And kind of a big upgrade for us. In the two months since, we've had some really, really encouraging results.

“The impact that mobile order and pay has had on my organization is most felt at the moment at the sharp end of the consumer experience - where the brand meets the guests that walk into our stores. That’s the biggest possible impact.”

Raphaël Mazoyer

Q: A number of brands are looking to add capabilities for online mobile order and pick up, especially with the global pandemic. For McDonald’s, this was planned earlier and built by design. How far back did the thinking need to go before you could start to get to a point where we could really enable this experience?

McDonald's is a large organization that has a big physical footprint. We've got nearly 3000 restaurants in the country, which means that we can't just magically make something happen overnight. The conversation started in early 2018. We came to an agreement with [Plexure] about a proof of concept that was built on work we’d already done together, like content personalization and offer targeting.

In January 2019 we had a pilot in the market in some of our prefectures in Japan.

We started in Okinawa, in the islands in the South of Japan. And it took us then a year to roll out progressively nationwide across the whole country. Once the feature was available in every store in the country, it took us just a couple of months to repackage the user experience and make it available in the large distribution app that we had in this market.

Q: How did you get people to first download and experience the application? From there, how quickly did they adopt it to the levels to which you were looking for?

One thing that we noticed as part of the initial proof of concept rollout, is that our consumers were actually quite willing and interested in getting on board with the program. They found it faster, and more convenient. They also found that it reduced the amount of stress and pressure that comes from standing in line at rush hour and having to order quickly.

There was clearly a sense of strong consumer appetite for this, people felt very comfortable with it. And of course, we're in a country where people have been using mobile phones in a functional manner for literally 10 years longer than most western countries.

Q: You're a globally experienced, marketing executive, within multiple countries and markets. How much of the success that we're seeing is down to that cultural nuance in Japan, the high level of mobile adoption?

Based on what I've seen in different countries where I've worked, I strongly believe that people use digital channels to do things. And I think that the mistake that's often made is when brands and companies think that digital is about communicating.

Communicating is part of it. But really, what you want to do is to enable people to perform the actions that they were going to perform anyway but in a more convenient, more personalized way. From this point of view, the sense of unlocking this functional capability is something that will be valid in every country in the world.

The flip side of this is also, from a brand perspective, having a transaction that's part of your digital activities, changes the ability that you have to adjust and optimize performance. So really, this enablement is what we're talking about, and that I do not think is really specific to Japan.

Q: People would be interested to understand the journey that we went through to get here. To create something that is such a beautiful experience and so seamless and simple. I think we all know behind the scenes is a lot of hard work and not always easy. It'd be great if we could talk about the journey to get here - the good, the bad and the ugly.

In order to make this possible, a lot of components had to be re-configured, mobilized or created and then brought together in that experience. I'm talking about software, infrastructure, technical infrastructure underlying this. Technical security procedures, operational procedures, training, tooling that's crew facing. Even communication strategies. All of this, behind that self-contained app that has the functionality in it.

But I think that the element that moves the needle the most, is to actually make it possible. Being able to place an order in the app, having it get into the system, trigger the actual cooking of the food and the preparation of the food and taking a payment for it, and having that food made available to our guests.

This first step that brought together the basic elements, was ground-breaking. This is where Plexure has been a fantastic partner.

And then what you did, based on the proof of concept, is to actually extract the necessary elements that needed to be scaled up, and made bulletproof at the scale that McDonald's operates at. Scaling and stabilization, which was the second step

The challenges that we found, were in sort of reconciling the mental image that stakeholders had in the beginning, with the nitty gritty of delivering this in a way that is worthy of the McDonald's brand.

You must be willing to have things not be completely optimized, because you're bringing something new to the market.

Q: What are some reflections from your side, about the strength of the relationship of the partnership and how we overcame obstacles together?

We have this principle that was handed down to us from the founder of McDonald's Ray Kroc. We see our relationship with our environment as something fundamental. Not instrumental, but fundamental to how the success of McDonald's can be created. And what we talk about is the three-legged stool.

We've got the system, we've got the vendors, and we've got the franchisees. And all of those, all three of those need to have their point of view considered. Their interest works into how things are put together. And really if you look at it from the end point and work backwards, we need to get there somehow.

And we're not going to be overly picky about who does what. We're just going to have to all pitch in and figure out how things can be done. And then, at the end of the day when the experience is all put together, we can look back and say okay, here is how we're going to be able to define the roles, and here's how we're going to make this a sustainable venture.

This pragmatic approach is what I've personally found in the relationship with Plexure is that you were most of the time, quite willing to just go ‘well, maybe the contract said one thing, but we realized that there is something that we didn't take into account when we envisioned this, and it's necessary. Let's go and do it together, figure it out.’

It's not always going to be comfortable, but we're going to say the way we see things, and we're going to find a way forward together. This is what worked well for us in this project.

Q: What’s the next sort of big idea whether it be in response to COVID-19 for you, or more generally in terms of where you wanted to lead the digital experience moving forward?

Order customization – being able to walk up to the front counter and say, ‘please make me a double cheeseburger, but hold the pickles’. We can't do this in the app right now, that's something I would very much like to have.

And it's one of those things that seems small. We're already capable of doing it in the store. How big of a deal can it possibly be, but as soon as you start thinking of your audience, we've got a whole bunch of families. Kids are picky about food.

So how can you add those little elements of user experience to truly unlock the potential for the broadest possible range of consumers?

What are the things that are going to delight the customer in a more positive manner?

We work out the return on investment that we can get from all these ideas and prioritizing the work in this regard.

Q: Coming out of COVID and obviously with the additional capability around payments and things that you're looking at. What's your expectation about how this technology and this capability will continue to be used? Do you think we'll continue to see the same level of usage of it, or do you expect it to come off?

One of the elements we considered before launching the activity at large scale, was for which of our guests, at what times of the day was mobile ordering going to be particularly relevant. And something I was surprised about was how lunch users did not take up mobile ordering during the week, as I expected they would.

In my mind, mobile ordering was about enhancing speed. And we haven't seen as much takeout during weekday lunches, which is when people are rushed as we expected. If I look in my crystal ball, what I think I see is that we're going to find ways to connect with that particular audience.

And I think this also aligns with the disruptions that we've seen from the COVID situation, where consumers have been in a very different pattern in their everyday life with children being at home because the schools were closed.

Some of the patterns that we're going to see in the coming few weeks are going to be more regular. And certainly, I hope that we will see additional uptake, because of the way mobile ordering is going to help those sorts of normal patterns of operation.

The part where I see a sort of a continuing divergence, is perhaps in how people are going to be placing their orders. Something that I believe mobile ordering is allowing us to do, is to be where our consumers are. However, the consumers want to place their orders, digital technology is going to allow us to be there and react quickly.

We've got data coming in about how people are placing the orders, what type of orders they're placing, and what time of the day. And we're certainly going to go on developing the product, the user experience, to support those patterns that we're seeing in people.

Q: Are there any metrics that you can share about repeat customer visits, average check? Any anything that you can share that was a positive surprise through this program.

What we're seeing is very encouraging numbers of people coming back. So this is something I wasn't sure about, because we have, as of now, not invested enough a lot in bringing people back in. So we've really focused and we're going to keep focusing for a while on people's first order, because I think this is what's difficult.

What we have seen is several percentage points of our monthly active users in the app, converting into mobile ordering. And that's a very, very meaningful metric for me, because essentially what this metric is about is, is this mobile ordering experience relevant to my audience? Have I been clear enough to them? But eventually do they judge?

And that's really the metric on which we live or die.

The second element is average check. Generally, digitally driven transactions are bigger than system average. So we've already got people coming in using additional discount. And those usually drive a bigger average check. We've seen this amplified with mobile ordering.

Q: What would be your top three tips for people who were going to get started on this path?

The first thing I would say is speed. Get to market as quickly as you can. You're not going to be able to foresee all of the obstacles solve them on the market, with the power of consumer feedback behind you informing the decisions you're making. Get to market as quick as you possibly can. You can actually fail by over planning.

The second tip is make sure that you have your instrumentation in place. Data that's coming in from your activity is going to be what allows you to make better decisions. If you don't have that data, your decisions are going to be based on gut feelings, hunches and theory. You really want to make sure that you have the data points, that are necessary for you to actually see what's going on and improve based on this.

And I think my third tip is probably to acknowledge the fact that getting to the starting line is 10% of the effort, 90% of the effort is after you've gone live. And I think that we all make that mistake. I've been in this business for 25 years, I still make that mistake. I focus so much on getting to launch, I forget that the hard work in fact just begins on that day.

Keep capacity, keep budget, keep energy steam for the few weeks, the few months after launch. And make sure that you're capable of iterating really, really fast, based on your data based on data that's coming in from the market after launch, so that you can get your product market fit in a better place.

If you’d like to see how we can work with your business to make mobile order and pay a reality, book a demo of our intelligent mobile engagement platform.

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