The $2.1 Billion McDonald's Machine
Summary
TLDRThis video script delves into the psychology behind McDonald's self-order terminals (SOTs), revealing how they subtly manipulate customers into spending more. It discusses the impact of design on choices, the use of nudges and dark patterns to upsell, and the potential for data collection to further optimize the user interface. The script highlights how SOTs have increased average order sizes and profits, while also raising concerns about their influence on consumer behavior.
Takeaways
- π McDonald's is the world's most valuable fast food chain with its stock price nearly quadrupling over the past decade.
- π± Self-service kiosks (SS) are a key factor in McDonald's success, with large touch screens resembling giant smartphones.
- π The introduction of SS has led to an increase in average order size and profits, with a reported 15% increase in Germany.
- β³ Customers spend more time at SS, which is beneficial for McDonald's as it influences purchasing behavior.
- ποΈ Design influences choices, with McDonald's using UI tricks to nudge customers towards more expensive items.
- π Reference values are set with expensive items to make cheaper options seem more appealing in comparison.
- π The placement of items on the menu encourages upselling, with more expensive items more prominently displayed.
- π Colorful animations and rewards are used to encourage adding items to the cart, making customers feel good about their choices.
- π³ The design subtly encourages card payments over cash, which can lead to more impulse purchases.
- π McDonald's uses bundling and cross-selling strategies to increase order profitability, making add-ons seem like a bargain.
- π The SS interface is a global tool, potentially collecting vast amounts of data for continuous UI optimization.
Q & A
What is the main purpose of self-order terminals (SOTs) in McDonald's restaurants?
-The main purpose of self-order terminals in McDonald's is to provide a modern, user-friendly interface for customers to place their orders, which has been a key factor in the success of the 'restaurants of the future' concept and has reportedly increased profits.
How has the introduction of SOTs impacted the average order size at McDonald's?
-The introduction of SOTs has led to an increase in the average order size, as customers tend to order more items when using the terminals compared to when they order at the counter.
What is the role of design in influencing customer choices at McDonald's?
-Design plays a significant role in influencing customer choices by presenting options in different ways, using techniques such as nudging, dark patterns, and bundling to encourage customers to add more items to their orders.
What is the concept of 'bundling' as mentioned in the script?
-Bundling is a pricing strategy where items are offered together at a price that is cheaper than if they were purchased separately, making the offer seem more attractive to customers and increasing the profitability of the order for McDonald's.
What is a 'nudge' in the context of user interface design?
-A 'nudge' is a design element that subtly influences user behavior by presenting options in a certain way, often without the user being consciously aware of the influence.
What is a 'dark pattern' in user interface design?
-A 'dark pattern' is a user interface design technique that is intended to trick users into taking actions that may not be in their best interest, such as hiding important information or presenting choices in a misleading way.
How do SOTs affect the likelihood of customers making impulse purchases?
-SOTs increase the likelihood of customers making impulse purchases by providing a more relaxed and private ordering environment, allowing customers to add items to their orders without feeling rushed or judged.
What is the potential impact of SOTs on McDonald's profits, as mentioned in the script?
-According to an insider who spoke to the German public broadcaster ZDF, the introduction of SOTs has increased McDonald's profits in Germany by about 15%.
How do SOTs handle the payment process, and what is the potential influence on customer spending?
-SOTs encourage customers to pay by card, which is known to increase the likelihood of making impulse purchases and spending more money overall, by making the cash payment option less prominent.
What is the potential for McDonald's to collect and utilize customer data through SOTs?
-McDonald's could potentially collect a significant amount of data through SOTs, which could be used for A/B testing and optimizing the user interface to maximize additional item purchases.
What are the potential downsides of using SOTs for customers, as discussed in the script?
-The potential downsides of using SOTs include being subtly manipulated into buying more than originally intended, and the risk of making unhealthy food choices due to the design of the interface encouraging larger orders.
Outlines
π The Psychology of Ordering at McDonald's
This paragraph discusses how McDonald's self-order terminals (SOTs) influence customers to make larger and more expensive purchases than initially intended. It highlights the use of design elements and psychological tricks, such as prominent placement of more expensive items and the subconscious comparison to reference values, to nudge customers towards upselling. The paragraph also mentions how the SOTs have contributed to an increase in McDonald's profits and the potential for data collection and A/B testing to further optimize the user interface for maximum sales.
π³ The Impact of Design on Consumer Behavior
The second paragraph delves into the specifics of how McDonald's SOTs employ design strategies to encourage spending. It describes 'dark patterns' that obscure the total cost until the end of the ordering process, the use of card payments to facilitate impulse buying, and the bundling of items to increase order value. The paragraph also touches on the effectiveness of cross-selling through the SOTs and how the interface is designed to make customers feel like they are getting a good deal, even when they end up spending more than planned.
π The Hidden Influence of Self-Order Terminals
This paragraph examines the broader implications of the design choices in McDonald's SOTs. It points out that while customers might think they are immune to subtle nudges and patterns, the effectiveness of these techniques is proven by the terminals' impact on sales. The paragraph suggests that the terminals are designed to maximize 'bad choices' and that the techniques used, while not unique, are often invisible to the untrained eye. It concludes by emphasizing the importance of being aware of these influences when using SOTs.
Mindmap
Keywords
π‘Self-Order Terminals (SOTs)
π‘Nudging
π‘Dark Patterns
π‘Bundling
π‘Cross-Selling
π‘McDonald's Profits
π‘User Interface (UI)
π‘Upselling
π‘Average Order Size
π‘Customer Experience
π‘McDonald's Global
Highlights
McDonald's self-order terminals (SOTs) are a key factor in the success of the 'restaurants of the future' concept.
McDonald's is considered a pioneer in the fast food industry with these terminals, which can be found in almost all of its restaurants.
SOTs have supposedly increased McDonald's profits in Germany by about 15% according to an insider.
The terminals encourage longer order times, which is beneficial for profits.
Design influences our choices, as seen in the way McDonald's presents its food categories and pricing.
McDonald's uses reference values to subconsciously influence customers' perceptions of affordability.
Nudging techniques are used in the interface design to subtly influence behavior.
The interface design positions more expensive items more prominently to encourage larger orders.
Dark patterns in the interface, such as hiding the total price, are used to manipulate customers into spending more.
McDonald's encourages card payments at SOTs, as they lead to more impulse purchases.
The bundling principle is crucial for McDonald's profitability, as add-ons increase the order's profit margin.
Cross-selling through SOTs is more effective than traditional counter service.
McDonald's Germany confirmed that the average order size at SOTs is higher than at the counter.
SOTs could potentially collect vast amounts of data for AB testing to optimize the user interface.
McDonald's terminals are one of the most used interfaces in the world, with over 69 million customers served daily.
While SOTs improve the customer experience, they are also designed to maximize unhealthy choices.
McDonald's uses subtle manipulation techniques in SOTs that are invisible at first glance but highly effective.
Transcripts
you're at McDonald's and you're craving
a Double Cheeseburger so you find
yourself in front of one of these
self-order terminals or SS are in almost
every restaurant of the chain now you
start browsing and end up buying a big
tasty bacon with fries in a Coke plus
nuggets and a McFlurry for dessert once
you see your food in front of you you
feel guilty you ordered way more than
you initially wanted many people have
this experience at fast food restaurants
since the introduction of ss the average
order has gotten bigger and bigger but
why today we're going to talk about one
of the most used user interfaces in the
world and its countless tricks to take
as much money as possible from
you
Fern McDonald's is by far the most
valuable fast food chain in the world
its stock price has nearly quadrupled
over the past 10 years today there are
more than 40,000 McDonald's restaurants
around the world many of them are
so-called restaurants of the future SS
are a key factor in the success of the
concept with their large touch screens
they look like giant double-sided
smartphones McDonald's is considered a
Pioneer in the fast food industry when
it comes to these terminals they tested
the first sots in Europe in 2008 today
they can be found in almost all of its
restaurants other chains like like
Burger King and KFC have followed soon
the terminals have supposedly increased
McDonald's profits in Germany by about
15% that's according to an Insider who
spoke to the German public broadcaster
zdf in 2018 former McDonald CEO Steve
Easter Brook confirmed that the
terminals definitely increased profits
his main reason customers take
significantly longer to place their
order but why would that be a good thing
design influences our choices not only
at McDonald's but also in our everyday
life you'd probably go for this watch
rather than this one HZ can watches are
made from natural materials such as wood
and marble they only use FSC certified
wood or residual wood from the furniture
industry hotan has a collection of over
1,000 products you can choose from this
watch for example is made of Walnut Wood
and marble this silver ring is made with
havan Kaa wood and this necklace has
marble embedded the quality of these p
pieces is excellent and the natural
components make each one unique with the
link in the description and with the
code Fern you can get an exclusive 10%
discount on your first order thanks to
free express shipping it will be with
you within 2 to 5 days there's even a
24-day money back guarantee feel free to
check out hot scan let's take a closer
look at the example from the beginning
to recap you only wanted to order a
double cheeseburger When you entered the
store in the main menu you are presented
with inviting images of burgers the more
expensive items like the double
hamburger Royale are especially
eye-catching on the left you can find
the different food categories here
McDonald's is setting a so-called
reference value going forward you'll
subconsciously compare other items to
these expensive ones even if you don't
go for the pricier Burgers the double
cheeseburger now seems pretty affordable
this makes you more likely to upgrade
the cheap
Burger we've just seen two examples of
nudging nudges are the design to
influence our Behavior by presenting
options in different ways sometimes they
are subtle and sometimes more obvious in
this case the icons on the side are much
smaller than the prominently placed
menus in the center more space on the
interface demands more of your attention
the same thing happens once you enter
the sub men the Bak burgers are at the
top and the cheaper ones are at the
bottom it's like a supermarket shelf you
have to bend down or scroll down to see
the cheap stuff the more expensive
expensive items are at eyee level as a
result you don't even notice the double
cheeseburger because of all the juicier
Burgers on top the big tasty bacon in
particular is just too tempting to
resist make it a meal yeah why not fries
and a coke let's go hm should you get
the mech menu small or the regular Mech
menu for just 50 cents more well of
course the regular then anything else
cheeseburger no nuggets hm yeah yeah
you're in the mood for that the colorful
animation you see when you make the
purchase isn't random it's there to
reward you and make you feel good about
adding things to the cart next the
terminal doesn't take you to the
checkout it just takes you back to the
menu now that you're looking at it a
dessert would be nice too why not get a
McFlurry wait how much is that now in
total oh down here it's
$19.97 this trick is called a dark
pattern dark patterns are designed to
get users to do things that aren't in
their best interests this is done by
presenting information in a way that
isn't neutral or by leaving things out
on purpose a classic example would be
the color accept all cookies button
while it may take several clicks to
select only necessary cookies the
terminal interface is similar whilst
less extreme the total amount is hidden
in a tiny corner of the large screen
standing in front of it you have to
actively look down to find the price for
McDonald's maximizing the average order
value is a key business strategy but for
you the price should be a minor detail
next to all the colorful products in a
statement to us McDonald's Germany
States the screens are as big as they
are to present information as clearly
and appealing as possible they are also
designed for
accessibility now it's finally time to
pay and here another NCH this time the
NCH is meant to motivate you to pay by
card you only see a smaller button for
the option to pay in cash at the
register there are a few reasons for
this when when you pay by card you're
more likely to make impulse purchases
and spend more money overall plus the
two-sided order terminals let more
people order at the same time up to 70%
of customers leave when there are more
than seven people in line you pay almost
β¬20 for a thick menu nuggets and a
dessert in total 2,300 calories once the
food is in front of you and even more so
after you devoured it all without Mercy
you ask yourself how did this happen
again the interface is a prime example
of upselling during the order process
you were tricked or at least subtly
manipulated into buying more than you
originally intended instead of a double
cheeseburger you end up with the big
tasty menu and those nuggets on top in
many small steps the terminal repeatedly
confronted you with moments of
comparison these comparisons create
subconscious pressure each step in the
ordering process seemed rational to you
at the time you may have even thought
you were getting a bargain but imagine
you had to follow Choice a double
cheeseburger for β¬350 or a meal plus
nuggets and ice cream for β¬1
1997 cents you probably would have
chosen the single burger this example is
of course slightly exaggerated but
making meals bigger is important for
McDonald's the margin on a single burger
is low only when you add drinks fries
and ice cream your order becomes really
profitable for the chain those add-ons
are cheap to buy and easy to prepare
that's why the menu is crucial for
McDonald's it works on the principle of
bundling the price is based on the most
expensive product like the big tasty for
McDonald's the additional drinks and
Fries make the offer worthwhile at the
same time for the customer it appears to
be a bargain as the items in the bundle
are much cheaper together than if they
were purchased
separately cross- selling also plays an
important role in menu management the
sot suggests additional products to you
that's much more effective than the
usual would you like some with that at
the counter there are no social
pressures often no queue behind you no
one watching often customers stand back
to back in front of the terminals and
that's how you ended up with nuggets you
hadn't planned on buying McDonald's
Germany confirmed that the average order
size at their SS was slightly higher
than at the counter what slightly means
in the definition remains unclear we did
ask for a ratio but received no answer
in 2015 the fast food compan reported to
have served more than 69 million
customers every day in over 100
countries about half of all orders were
placed through the order terminals this
makes the McDonald's terminal one of the
most used interfaces in the world
probably only surpassed by Tik Tok
Instagram and such McDonald's could
potentially collect a ton of data every
day data which they could use for
example for AB testing customers could
randomly be shown different versions of
buttons like different sizes colors or
wordings or some customers might see a
recommendation for six-piece nuggets
While others might see nine-piece
nuggets with these tests McDonald's
could continuously optimize the UI based
on millions of data points to squeeze
out the maximum amount of additional
items purchased it could be anything
from the exact size of the sidebar to
the color of the salad leaves or the way
the desserts are arranged McDonald's
Germany told us that they don't do AB
testing in Germany they could not tell
us whether the company does such tests
in other countries and referred us to
McDonald's Global we asked McDonald's
Global for comment but so far they
didn't respond friends in the US and UK
have tested the terminals in their
countries for us the user interface
seems to be pretty similar it's probably
safe to assume that the techniques
discussed in this video come into play
in McDonald's restaurants in one way or
another all over the
world there's no doubt that SS improve
the customer experience they save time
and make the whole process more chill a
real blessing for introverts and you
don't have to worry about being judged
at the register if you want to treat
yourself to a big meal with two desserts
but SS have a downside too they are
explicitly designed for you to maximize
your bad choices the techniques used are
not unique by any means but often
invisible at first glance you might
think this is all so see-through and
you're not influenced by little nudges
or dock patterns but people are
otherwise these terminals wouldn't be
this effective and a giant conglomerate
like McDonald's wouldn't use them
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