Here we look at how fast-food giant McDonald’s is using technology like artificial intelligence and the Internet of Things to deliver innovations as well as how it is entering the metaverse.

1. THE METAVERSE AND DIGITAL
TRANSFORMATION AT
MCDONALD’S

2. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
Here we look at how fast-food giant McDonald’s is using technology like
artificial intelligence and the Internet of Things to deliver innovations as well
as how it is entering the metaverse.
THE METAVERSE AND DIGITAL
TRANSFORMATION AT MCDONALD’S

3. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
The famous golden arches are recognized worldwide not only as an icon of fast food, but also of
technological transformation. McDonald’s – the world’s largest restaurant chain - has been an early
pioneer of tech-driven innovation, from the drive-thru to self-service kiosks. Today it’s forging a path
for fast food into the metaverse and beyond.
To kickstart its most recent digital surge, the company incubated its own Digital Information Team back
in 2014, which has since grown from just three to over 130 members. Their task was to deploy
technology in order to overcome challenges around restaurant dining, drive-thru service, and home (or
anywhere else) delivery.
In order to achieve these aims, it is deploying a number of innovative artificial intelligence (AI), analytics,
and internet of things (IoT) use cases. It is also investing heavily in reskilling staff away from jobs that
can be easily automated, such as taking orders, and towards areas of the business where they will get to
use their uniquely human abilities.

4. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
McDonald’s started serving customers at drive-thru windows in 1976, and by the early 1980s, this high-
speed, low-friction selling channel accounted for 50 percent of its sales. During the pandemic, this
increased to around 70 percent. Today, it’s still a highly popular way for customers to get hold of their
beloved burgers and fries, and, along with delivery, enabled the company to keep its revenue relatively
stable even through the pandemic.
In 2019, it acquired Israeli AI startup Dynamic Yield for a reported $300 million, with the aim of building
its technology into every aspect of its customer-facing operations. The same year, it also acquired
another AI startup, Apprente, specializing in voice technology.
Since then, McDonald's has implemented AI-driven voice recognition ordering systems at some of its
restaurants, which use synthetic human voices and natural language processing algorithms to take
orders. It says that this has enabled it to shave almost a minute from the total time it takes for the
average customer to receive their order. In 2021, McDonald’s was able to sell the technology it had
developed for automated voice-based ordering systems to IBM, creating more revenue for the
restaurant giant.
EFFICIENT ORDERING

5. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
Another initiative involved using image recognition algorithms to scan number plates and
predict what customers were likely to order based on previous occasions that vehicles had
visited.
Inside its restaurants, it has also experimented with dynamic menu boards that use AI to
tailor the items on offer in real-time, based on time of day, weather, popular orders of the
moment, and how busy the restaurant happens to be. Former CEO Steve Easterbrook told
investors that this technology has successfully led to larger average order sizes across its
restaurants.

6. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
Of course, today, a lot of the buzz in the fast-food industry is around app-based
ordering. Like most global chains, McDonald’s has an app that (depending on where
you are in the world) can be used to order food through any of its distribution channels
– restaurant, delivery, or takeaway. The app uses prediction and recommendation
algorithms to decide what customers are most likely to want to buy and place them
prominently on the screen. These recommendations are based on previous orders,
global, national, and local trends, and the weather. The app also allows McDonald's to
gather a lot of data about who its customers are and how they spend their time and
money (with the customers’ permission). This allows the restaurant chain to further
tailor its products and services to meet their needs.

7. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
Metaverse is the term used to describe “next level” virtual platforms where users will interact with
each other – and with brands like McDonald's – in immersive, persistent environments. Many
global brands are seeing it as the next big thing in both marketing and customer experience, and
McDonald's is no exception.
The chain has filed patent applications indicating that it is in the process of developing "virtual
restaurants." As we are spending more and more of our time online, McDonald’s is betting that
just as teenagers like to meet and hang out in burger restaurants today, tomorrow, they will log
into virtual reality (VR) equivalents where they can talk to friends in entertaining environments, as
well as order food and drink deliveries to their homes.
MCDONALD’S IN THE METAVERSE

8. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
It also plans to sell virtual goods – this might take the form of branded clothing and other
items that can be used to decorate avatars or customers’ virtual homes in the metaverse.
And its patent applications reveal that it is also interested in developing NFTs that would
allow digital items it creates for the metaverse to be unique, limited edition, or one-of-a-
kind, indicating that it may be interested in creating collectibles or personalized
promotional items. It has already created and launched one such NFT, celebrating the
return of the much-loved McRib to its menu in November 2021 – a sandwich that itself
became an internet meme!

9. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
A third area where McDonald's is rolling out AI and other fourth industrial revolution technologies is
driving efficiencies within its own internal operations and supply chain.
Easterbrook, who was credited with launching the digital transformation initiative, said that the
ultimate aim was to connect all of the AI, data, and analytics systems in order to create an end-to-end
intelligent business.
He said “As you start to link the predictive nature of customer demand all the way through your stock
levels in the restaurant and kitchen, you can flex it back down through the supply chain.”
This will allow the company to more accurately predict widespread trends in consumer behavior – such
as the growing demand for meat-free or healthier menu options – as well as the impact of global
issues such as the ongoing disruption to food distribution caused by the Covid-19 pandemic or
Russia's invasion of Ukraine.
SUPPLY CHAIN

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11. © 2021 Bernard Marr , Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker,
futurist, and a strategic business & technology advisor to governments and
companies. He helps organisations improve their business performance, use data
more intelligently, and understand the implications of new technologies such as
artificial intelligence, big data, blockchains, and the Internet of Things.
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