Why McDonald’s is using agencies and consultancies to drive digital innovation
The fast food chain has appointed Capgemini and Publicis.Sapient to lead its digital transformation, which could bolster a healthy sense of competition between the two agencies and drive the brand forward.
McDonald’s is in the midst of overhauling its business, and that overhaul has technology at its heart. Every one of its analyst calls is packed with updates on what digital changes the fast food chain has been implementing, from mobile ordering apps and in-store touchscreen kiosks to home delivery.
The company unveiled the next round of changes earlier this week by appointing global consultancies Capgemini and Publicis.Sapient to look after its digital overhaul. The aim, it says, is to accelerate the rate of “digital technology innovation” and transform the restaurant experience for customers.
“[We want to] enhance our ability to bring speed, scalability and disruptive innovation across our restaurant and digital technologies as McDonald’s continues to transform the customer experience through greater convenience and personalisation,” Jim Sappington, executive vice-president of operations, digital and technology systems at McDonald’s says.
The reportedly year-long pitch saw Publicis.Sapient and Capgemini go up against Accenture and Indian consultancy HCL to win the work. It is the latest example of consultancies and agencies finding themselves in direct competition as the role of technology in marketing increases and both look to win lucrative contracts.
Yet this deal would suggest that neither agencies nor consultancies have quite got the right expertise to fulfill the gamut of clients’ needs.
Two heads are better than one
The decision to go with two partners instead of one means McDonald’s can make best use of both companies’ areas of expertise. Capgemini has built its reputation on its ability to manage internal operations and IT. Publicis.Sapient, meanwhile, is known more as an advertising and technology company, and could therefore focus on the consumer-facing aspects – CRM, the customer journey and mobile app.
Nick Manning, chief strategy officer at Ebiquity, says: “Bringing in a customer-focused agency group like Publicis.Sapient plus a word class back-end provider like Capgemini is a very good combination. They can bring different things to the party; One looking from the demand point of view, the other from the supply.”
It is also a smart move from a risk management point of view and could also bolster a healthy sense of competition between the two and encourage them to up their game.
“By using more than one agency, you almost create a sense of competition between them, and therefore they have skin in the game in terms of keeping top of mind and maintaining the relationship with McDonald’s. It’s a smart thing to do, as it spreads McDonald’s risks,” says Allyson Stewart-Allen, director at consultancy International Marketing Partners.
Making a data play
Besides overhauling its restaurants and making sure its tech is up-to-date, there is undoubtedly a data play at hand. Traditional retailers such as McDonald’s are under increasing pressure to find out who its customers are – with digital playing a key role in obtaining this information.
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“[McDonald’s] is a pioneer with this partnership, but let’s not underplay the importance of data in this. While McDonald’s is a retail estate-led business, customer data is the thing that really matters these days in terms of understanding how customers work and what they’re buying,” says Manning.
To do that, McDonald’s will need to make sure its backend systems integrate seamlessly with its front end services across the business. And that is no easy task given the wide range of digital features it now offers, ranging from in-store kiosks to its mobile ordering app.
“If you’re in any type of retail, with people increasingly using mobile tech to order and connect with the brand, you have to move the game on. McDonald’s has to improve the user experience and its retail estate, and take the friction out of ordering and transacting,” he adds.
With any partnership, there are risks attached. One obvious challenge is making sure the two organisations work well together. It is also important for any learnings to be shared between all three parties.
“McDonald’s will need to do some good management over both agencies and ensure data sharing happens, that they talk to each other and integrate in the way it does things,” Stewart-Allen says.
At the same time, both parties need complete clarity on what they are working on, to ensure they don’t overlap.
“As long as nobody tries to extend beyond their remit, it will be fine – as that’s when things tend to get a bit sticky,” Manning adds.
Publicis.Sapient and Capgemini could also provide a useful external view and offer expertise as to what other clients and sectors are doing in terms of digital transformation. McDonald’s shouldn’t pass on this knowledge – but it also shouldn’t solely focus on what its competitors are up to.
“The worst thing McDonald’s could do is use these two advisors to replicate what other fast food restaurants are doing. It’s not the answer. Instead, they should be looking at what other industries do that is innovative, like the automotive sector, or banking or airlines. To think that your sector has all the answers is the first assumption that needs challenging,” Stewart-Allen concludes.