<img src="https://technicalterrence.com/wp-content/uploads/2024/03/Big-Mac-becomes-Big-Tech-with-some-setbacks-By-Reuters.jpg" alt="Big Mac becomes Big tech, with some setbacks” id=”carouselImage” style=”visibility:hidden”/>
© Reuters. FILE PHOTO: A man reads a notice in the window of a McDonald's restaurant closed as the company said it stopped operations due to a system outage, in Tokyo, Japan, March 15, 2024. REUTERS/Rocky Swift/File Photo
2/4
By Waylon Cunningham
SAN ANTONIO, Texas (Reuters) – When McDonald's first opened its doors in the 1940s, its workers stood at physical counters, its burgers and fries appeared on paper menus and its customers paid cash to its cashiers. humans.
How picturesque.
Today, technology is so pervasive in every aspect of McDonald's business that it would be only a slight exaggeration to call it a technology company that sells hamburgers.
McDonald's mobile application; its humanless order-taking kiosks; its digitized menus that change based on trends, weather and more; and even its generative ai – together, they enable McDonald's to drive billions of dollars worth of additional sales and efficiencies for the company, which has 40,000 locations in approximately 100 countries.
However, that same technology can also bring McDonald's to its knees.
On Friday, system outages hit McDonald's locations in some of its largest global markets, including Japan, Australia and the United Kingdom, forcing many stores to temporarily accept cash only or close entirely. McDonald's has not disclosed how widespread the outages were, but on Friday afternoon, 12 hours after the outages were first reported, a franchise in San Antonio, Texas, was not accepting orders on its app and could not accept cash.
McDonald's said in a statement that the outage was caused by an unnamed third-party vendor during a “configuration change.” When asked for comment, McDonald's referred to that statement. McDonald's Japan apologized on Saturday for the inconvenience and said all of its restaurants and delivery service were operating normally.
The burger giant warned that something like this could happen, at least on Wall Street.
“We are increasingly reliant on technology systems,” the company's attorneys wrote in their Feb. 22 annual filing to the Securities and Exchange Commission. “Any failure or disruption of these systems could significantly impact our operations or those of our franchisees, or our customers' experiences and services.” perceptions”.
Even ai gets a warning in the document, stating that “the artificial intelligence tools we are incorporating into certain aspects of our restaurant operations may not generate the desired efficiencies and may impact our business results.”
However, Friday's widespread blackout is unlikely to shake McDonald's from its long-term strategy to deepen its reliance on technology.
McDonald's wants more customers to order through digital avenues such as its app and kiosks, which already accounted for a third of its sales in major markets in 2022.
In December, McDonald's announced a partnership with Google (NASDAQ:) to move restaurant IT systems to the cloud, where the global scale of data will allow McDonald's generative ai system to “better understand the widest range of patterns and nuances.” “, resulting in what McDonald's at the time said would be “fresher, spicier food.” Generative ai already powers much of restaurant operations and personalized presentations made from internal customer profiles.
It's not just McDonald's. technology is the strategy of the day for virtually all major fast food chains.
Starbucks (NASDAQ announced its own internal ai platform, called “Deep Brew,” in 2019, which then-CEO Kevin Johnson said would increasingly boost its personalized offerings, store staffing and management. of inventory.
“Over the next 10 years, we want to be as good at ai as the tech giants,” Johnson said at a retail conference in 2020, according to Retail Dive, a trade publication. Starbucks hired a former McDonald's executive in 2022 to oversee its use of the technology.
The risks of this new technology do not only come from system interruptions.
Wendy's received public backlash after its CEO said during a mid-February earnings call that the chain would soon use “dynamic pricing” on its digital signs, yet another technology that wouldn't have been possible before the Information Age. .
The chain later clarified that it had no intention of using digital signals to implement a “price surge” that could allow it to charge higher prices during peak hours. Rather, Wendy's (NASDAQ ) said, its CEO's comments referred to its plan to offer discounts to customers during quiet hours of the day.
