McDonald's Hong Kong: a digital transformation case study
McDonald's Hong Kong: revamping an app and targeted advertising
Why is digital transformation important for McDonald’s Hong Kong?
In this challenging time, less and less people go out for meals, but more and more people stay home. It is particularly challenging for marketers who want to talk to their target customers. Many traditional channels are not effective as before, such as outdoor, TV and print. We needed to develop an omni-channel strategy to reach them, with a heavy leverage on digital.
Digital not only allows us to expand our customer touchpoints and provide enhanced services, such as mobile order and delivery, but it also helps us to better understand customer purchase behaviour through data analytics - to inform our new product development and provide more personalised offers to our customers.
What was your digital presence before the transformation?
We first launched McDonald’s app back in 2018. We focused on mobile ordering for in-store pick up and McDelivery. We built this app for customers to enjoy McDonald’s food anytime, anywhere. Convenience was the objective. Customers enjoyed this new app, but over the years the usage has been only on a modest level.
We had a Facebook page and mostly used it as an advertising channel. We also modernized most of our restaurants with Engagement Kiosk for self-ordering, as well as expanding digital payment options like Alipay, WeChat Pay and Apple Pay. I would say we were fairly digitally mature whilst there was opportunity to connect the data sitting in these digital assets and build an ecosystem.
What were the challenges and opportunities?
One of the key challenges was to bring the whole organisation onto the same page with digital transformation, and understand the benefits of digital transformation from the top, all the way down to the 15,000 frontline staff. Our data infrastructure allowed us to understand our customer behaviour and design a personalized digital experience for them. This was a big advantage and a fantastic opportunity for us to build something great, just for customers.
What did you do in this digital transformation?
Kai Tsang spearheaded a taskforce to develop a vision and 3-year road map for digital transformation. For marketing it will be a journey from mass to personalization and we have started with repositioning our McDonald’s app from convenience to value which is what today’s customers want. Our refreshed app was launched in Jul 2020 and has the “best value in town” so there is no need for our customers to look elsewhere.
Each week we offered coupons via the app - and from time to time delivered personalised exclusive offers to customers. From this we had an overwhelming response, so launched another wave of promotions inviting renowned pop singer Eason Chan to feature in a promotional video singing the famous McDonald’s tune. App registrations took off after this promotion.
Moreover, we revamped the way we used Facebook and started building an effective channel. Our creative strategy changed, from adapting TVC and print materials to creating bespoke videos and pictures for a mobile audience, capturing their imagination in a short time frame. We also started targeting different consumer groups with different creative and messages, and sharpened our targeting along the way with an overlay of our first-party data.
What were the benefits for customers in this transformation?
Many customers told us that they very much enjoyed the weekly offers on the McDonald’s app. Whenever they visit us, there must be a relevant coupon for them to enjoy our food. For example: in the morning, we have discount coupon for Extra Value Breakfast meal, or an upgrade to McCafe handcrafted coffee at a special price. This was something that was not feasible in the past offline landscape.
How does it help the business?
The primary objective of the app was to build engagement with customers, i.e. to build the brand love with customers so they would come more frequent and spend more with us. With that, we see that the lifetime value of an app user being much higher than a walk-in customer.
As we drive more and more customers to download and use our app every day, the incremental business contribution from digital is growing healthily. With targeted advertising on Facebook we are also able to achieve better cost efficiency in reaching the right target with the right message at the right time.
It is now one of our most critical media mix in generating campaign awareness.
Where do you see McDonald’s Hong Kong's digital transformation journey in 2-3 years' time?
We had a good relaunch of McDonald’s app in 2020. It confirms our direction of transforming its position from convenience to a data-driven and personalized value app. We will continue to focus on this data-driven approach, to enhance the personalized experience for each of McDonald’s customer.
What results did you see?
The app revamp was a huge success, we have recruited more than 1.8M digital members in only 4 months, which literally means 1 out of 4 Hong Kong population registered as our digital member. Digital sales now has a significant share of our business and we have exciting plans ahead to further grow its size. Our YTD reach and engagement on facebook has increased by 92% and 223% respectively vs last year.
This case study is part of a series called Facebook Curated, in partnership with Facebook. Learn more.