Imagine driving up to the McDonald’s of the future: the screen at the drive-thru greets you by name – “Hello, Kathy” – and asks if you want your usual order. It would know I usually order a double cheeseburger and small fries, no drink. But on an unusually cold day, it would offer me a hot coffee (cream, no sugar), because it knows I would go for that. It also knows what items other customers are ordering, and it may offer me a trending item to see if I’d try it.
Does this future vision of McDonald’s excite you or terrify you? And would that opinion change if it wasn’t McDonald’s customizing your ordering experience, but an airline tracking your movements with facial recognition? Businesses have mountains of customer data at their fingertips, and now they’re starting to use it in myriad ways that are not only personalizing the customer experience, but are also raising privacy concerns. Let’s take a look in today’s “Hot Topic” blog post.
Would you like customization with that?
Burger King may be famous for telling you that “you can have it your way,” but McDonald’s is now aiming to be the fast-food leader in personalization. The company’s global CIO, Daniel Henry, talked about the company’s strategy in this Wall Street Journal article. Here are some of the highlights:
- Personalizing sales: McDonald’s is purchasing Dynamic Yield Ltd. For $300 million. The company provides technology that will allow McDonald’s to personalize its interactions with customers. For example, in real time it can change its menu items at the drive thru depending on whether it knows who the customer is, what items are trending among all customers, or other conditions such as weather. This technology will be offered in conjunction with other technology initiatives, such as the self-serve kiosks now available at restaurants or the mobile application. Henry says the goal is to offer choices to consumers, because this is what they are demanding.
- Improving the bottom line: Of course, the bigger goal for McDonald’s is to increase sales. The company believes that by offering customers a custom experience, not only will they have a higher average check, but the company will save money through greater efficiencies. Another company leveraging data to improve sales is Pizza Hut. The chain is currently using data from its loyalty program to more effectively purchase ads and develop the right audience for targeting.
Making the friendly skies friendlier (or maybe creepier)
Airlines are also taking steps to provide customers with a more personalized experience in the air. According to this article in the Wall Street Journal:
In the future, passengers may walk onto a plane and see a screen welcoming them by name. They’ll plop into their seat and see their name on an in-flight entertainment screen, preloaded with their preferences for seating, lighting, temperature, fragrance and viewing, or maybe the spot where they left off a movie on a connecting flight. Their preferred pre-departure drink might be waiting for them. Sensors in seats measure body temperature and adjust airflow.
Airlines are gambling that travelers – especially frequent fliers – will appreciate the perks that come with personalization. But privacy experts are calling foul. They question what kind of data will be collected, and who else will have access to it. Do you really want airlines knowing how much alcohol you order during a flight? And would you want any third-parties to have access to that?
Taking it a step farther, airlines – in conjunction with the Department of Homeland Security – are able to track passengers via facial recognition and other biometrics. For example, JetBlue now uses the technology to board some of its flights in lieu of tickets. Are you okay with airlines using your face and/or your fingerprints to track you before and during your flight?
Other uses of customer data
There are many other ways businesses are using or looking to use personal data:
- This article in the Wall Street Journal details how retailers are using personal data to send promotions to your smartphones while you’re shopping and suggest outfits you might like based on other selections. Some retailers are testing the use of facial recognition technology to flag shoplifters or let people check out more easily.
- Of course, Facebook is famous for using its users’ data in myriad ways from advertising to how it serves up items in your news feed. Did you also know the company may have uploaded your email contact list without your knowledge?
What are you comfortable with?
Businesses have so much data at their fingertips. And the level of granularity and knowledge about each consumer’s individual habits is astounding. With new technology, businesses can much more easily analyze this consumer data and use it to offer you a personalized experience. Of course, they’re aiming to fatten their own pockets in the process.
For consumers, it’s important to consider many questions as they relate to data privacy:
- Do you know the privacy policies of the businesses you provide personal data to?
- Are you okay with businesses selling your data to third parties? (Because yes, many of them do that.)
- How much is too much when it comes to data collection?
- Does there come a point when we say our privacy is more important than a personalized experience? Or does it not matter what personal information businesses have if it makes your experience more convenient?
- Can we halt some of this data gathering or are we too far down the road already?
Read other Hot Topic posts
- Why Diversity Matters in Decision-Making - February 15, 2022
- 3 Takeaways from KLAS Research’s “Data and Analytics Platforms 2021” Report - October 12, 2021
- 4 Ways to Use the Wisdom of Crowds BI Market Study in Your Buying Research - June 10, 2021