It's estimated that ~1% of the world's population eats at McDonald's every day.
McDonald's best lever to influence purchase decisions is the menu, which the $190B fast-food chain designs with many psychological hacks to boost sales.
Here are 10 of them 🧵
1/ In the mid-2010s, McDonald's sales were lagging. The brand turned around its fortunes with a multi-year menu & store redesign that:
◻️emphasized simplicity (speeding up avg. drive thru time from 400 secs to 350 secs)
◻️highlights signature items (pricier = higher margins)
2/ Here is McDonald's challenge: loyal customers love the classics (Big Mac, McChicken).
And they spend only 30 secs on the menu (getting them off default options is hard).
But McDonald's sells 2B+ meals a month, so influencing choices for a small % of customers boosts profits.
3/ Attention cues
Dynamic menus were the biggest change. While value items are typically static pics, signature items are animated.
Our peripheral vision specializes in detecting motion. Dynamic signature items capture our attention and end up in our potential choice set.
4/ Decision anchoring
First options are key in decision-making. In a study of buffets, 70% of eaters put one of the first 3 items on the plate.
Signature items are often the 1st thing you see. By highlighting them, they are nudging the higher-margin items into your choice set.
5/ Optimized for working memory
Cognitively, humans can hold 5-9 "items" in our working memory at one time (e.g., 7-digit phone numbers).
McDonald's dynamic menus highlight 7-10 items. Naturally, the majority of the menu real estate emphasizes higher-margin items or combos.
6/ Price anchoring
Even if *none* of the signature item nudges work, we've been exposed to the priciest items on McDonald's menu.
A subsequent purchase from regular (or value) menu will seem like more of a deal based on the price difference...leading to the perception of value.
7/ The power of grouping images
Gestalt principles describe how humans perceive objects and one of them is pattern matching.
McDonald's often groups 3 similar images together of a single product category (usually Signatures) to create a "pattern" that captures our attention.
8/ Health halo
Studies show that menus with healthy food items actually end up pushing people to eat junk food.
Why? The healthy images raise the "health index" of an entire choice set, giving us permission to indulge.
Naturally, McDonald's includes such images on its menu.
9/ Experience chunking
Inside the restaurant, McDonald's separated the order and waiting lines.
The key here is that our perception of "waiting" is reduced vs. if it was a single line. Thus, our memory of the experience is that the wait "wasn't too long".
10/ Self-order kiosks
You've probably used one. While the joke is that McDonald's is making us work, the kiosks are *def* effective at making us spend.
How? We don't feel pressure/anxiety of ordering in line. Instead, we take time and fully customize (=spend more) on the order.
11/ The logo
This isn't part of the redesign but worth flagging: the colors in McDonald's logo are very strategic.
We see color before words and images. And many fast food chains use red, which evokes urgency and desire.
(Research suggests it raise blood pressure/appetites).
12/ If you enjoyed that, I write threads breaking down tech and business 1-2x a week.
Def follow @TrungTPhan to catch them in your feed.
The amount of work Hayao Miyazaki and Studio Ghibli team put into a film is mind-boggling.
Each typically has 60k-70k frames, all hand-drawn and painted with water color.
This 4-second clip (“The Wind Rises”) took one animator 15 months to do. Insane.
The docu “10 Years with Hayao Miyazaki” shows him talking to the animator (Eiji Yamamori) after its done.
It’s so good:
Miyazaki: “Good job.”
Yamamori: “It’s so short, though”
Miyazaki: “But it was worth it.”
The animator gets a second of joy (he’s pumped) but on to the next.
Miyazaki doesn’t use digital FX or computer graphics. He believes “that the tool of an animator is the pencil.”
On a related note, here’s something I wrote about another Japanese legend dedicated to the craft (Ichiro Suzuki) and the art of mastery: readtrung.com/p/jerry-seinfe…
New York City paid Mckinsey $4m to conduct a feasibility study on whether trash bins are better than leaving garbage on the street.
The deck is 95-slides long and titled “The Future of Trash”.
Some highlights:
▫️The official term is “containerization”, which is the “storage of waste in sealed, rodent-proof receptacles rather than in plastic bags placed directly on the curb.”
▫️Two main types of containerization: 1) individual bins for low density locales; 2) shared containers for high-density.
▫️NYC needs to clean up 24,000,000lbs of garbage a day
▫️Containerization has only become the norm worldwide in major cities in the past 15 years.
▫️New York City first considered containerization in the 1970s but never conducted a feasibility study until now (Mckinsey’s sales team has been dropping the ball)
▫️Key considerations for container viability:
• POPULATION DENSITY: NYC has 30k residents per square mile (more dense than comparable big cities)
• BUILT ENVIRONMENT: Few places to “hide” containers due to history of infrastructure development.
• WEATHER: Snow creates challenges for “mechanized collection” in the winter.
• CURB SPACE: Mostly taken up by bus stops, bike lanes, outdoor dining and fire hydrants.
• COLLECTION FREQUENCY: NYC needs to double frequency of pick-up for estimated speed of trash that bins would accumulate.
• FLEET: A new garbage truck will needs to be designed to collect rolling bins at scale.
▫️ The proposed solution (literally garbage bins and shared containers) covers 89% of NYC streets and 77% of residential tonnage.
▫️The three case studies — because you gotta have solid case studies — are Amsterdam, Paris and Barcelona.
▫️There is a slide called “Why containerization matters” and three reasons are “rats”, “pedestrian obstruction” and “dirty streets” (the 21-year intern that did this slide billed at prob $10k an hour is my hero).
The study is actually pretty interesting.
I have no idea if $4m is a rip-off to learn that “yeah, we should put garbage in bins so rats don’t eat it” but I would have happily done it for 10-20% of that budget (and come to a similar conclusion).
It is actually an interesting deck. Just the thought of a 20-year old newly grad getting billed at an obscene rate to say”rats get to garbage” is kinda funny
Four more solid slides:
— By the numbers (daily garbage = 140 Statue of Liberty a day!!)
— City comparison
— Container comparison (looks like they did select the “scalable” trash bin)
— Curb side analysis
Think Mckinsey telling NY to “put garbage in bins so rats don’t eat it and people can walk” will work out better than when it told AT&T in 1981 that cellphones would be “niche.”
The Economist latest cover story on solar energy is packed with interesting stats.
▫️Solar energy will be the primary source of human energy use by 2040
▫️$500B spent on buying and installing solar panels in 2024 (nearly same “sum being put into upstream oil and gas”)
▫️Solar on track to produce “more electricity than all the world’s nuclear power plants in 2026, than its wind turbines in 2027, than its dams in 2028, its gas-fired power plants in 2030 and its coal-fired ones in 2032”
▫️Since the 1960s…the levelised cost of solar energy—the break-even price a project needs to get paid in order to recoup its financing for a fixed rate of return—has dropped by a factor of more than 1,000
▫️From the mid-1970s to the early 2020s cumulative shipments of photovoltaics increased by a factor of a million, which is 20 doublings.
▫️Over the same span, the “prices dropped by a factor of 500. That is a 27% decrease in costs for each doubling of installed capacity, which means a halving of costs every time installed capacity increases by 360%.”
▫️The cost of a kilowatt-hour of battery storage has fallen by 99% over the past 30 years.
The chart below — which they made vertical (kind of weird) — shows global useful energy consumption over the past century.
I’ll add two more posts after this one with excerpts on obstacles and opportunities.
— A lot of A/C for Sub-Saharan African (need 2TW of new solar just for Africa to reach India level of electricity use)
— Filter air continuously (reduce spread of airborne diseases)
— Carbon removal
— Water desalination
— AI/Data energy needs
Details from Red Lobster’s bankruptcy filing are wild and so much mismanagement:
▫️$1B in debt, $30m in cash
▫️Previous PE owner sold land and leased it back to Red Lobster at “above market rates”
▫️$20 Endless Shrimp cost it $11m but the interesting part is that one of the chain’s owners is Thai seafood firm Thai Union (which also owns Chicken By The Sea) and it may have used Endless shrimp to dump its own shrimp supply through the 578 restaurants in North America
▫️Thai Union became the only Red Lobster shrimp vendor, overcharging for shrimp and skipping quality reviews (Thai Union has written off its $500m+ investment)
▫️Red Lobster has had 5 CEO in the last 5 years (!!!)
▫️Sales down 30% since 2019
Red Lobster needed Yukitaka Yamaguchi — aka Japan’s Tuna King (sleeps 3 hours a day and knows where any fish is from on a single bite) — to run quality control.
Also, never forget Beyoncé name dropped Red Lobster with some R-rated verses in 2016 (“Formation”) and Red Lobster social responded and there was actually a brief sales surge.