Expert case by

Benjamin

McKinsey Unconventional Case: Inclusive Cafes

Case information

Difficulty: Intermediate

Interviewer-led

< 100 Ratings

Times solved: 500+

Non-conventional

Case Prompt:

Your client is a leading retail coffee chain. They are present in several countries globally and are a popular brand in most of the markets that they operate in, with several thousands stores in operation.

A key focus of the company currently is diversity & inclusion. In their biggest market which is the US, 1 in 4 people have some sort of disability. One realization the client has had is that their retail stores are not as inclusive to individuals with disabilities.

McKinsey has been brought on to help them design more inclusive spaces in their retail stores.

Overview of All Exhibits

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Question 1: What issues would you investigate to help diagnose current challenges to an inclusive design at the stores?

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I would investigate the customer journey to help identify current challenges

Entering the store
Placing an order
Waiting for the order / making the order
Collecting the order
Sitting & dining

Within each of the steps, I would investigate potential challenges along the following lines

Process
Physical layout / furniture
Technology & equipment

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A good response should use a relevant and insightful structure. Here, one could use the customer journey to structure the approach

A sharp candidate should also be able to elaborate during the structure that this is a customer journey, which prioritizes the customer POV, so the employee experience needs to also be factored in under this structure appropriately

A strong response should also include the following

Some hypotheses on where problems could take place - i.e. order collection counters might have furniture that is designed poorly for individuals in wheelchairs
Recognition / attention to detail on the different customer segments (hearing, mobility, vision)
High level discussion on what analysis would be needed to validate the issues (e.g. 2 key analyses needed would be customer surveys and employee interviews, but there are other viable suggestions as
well)

Note for Interviewer

There can be multiple ways of structuring this case, as long as its MECE and logical, you may accept the answer and credit the candidate. Do note that given this is an unconventional scenario, as long as elaborations are reasonable, that is also fine.

Clarifying information, if the candidate asks

The store offers a mix of drinks, primarily focusing on coffee, and some light snacks including pastries and cakes. Customers place an order at the counter with baristas, but are not served the drinks at the table. Once the drinks are ready, baristas will call the customers name and they can pick up the coffee or orders from the counter in an area that is dedicated for pickups. Basically similar to Starbucks.
The scope applies to inclusion for both employees and customers
Inclusive space means a space that makes everyone feel welcome and with minimal friction while interacting with the environment
For the sake of the case, lets assume that the key disability needs are faced by those are impaired through mobility, vision, and hearing
The client's goal is to reduce friction in the retail environment and improve the customer experience and employee experience
The client has not yet started any studies or research into this

Question 2: What observations can you derive from the data collected?

The research team has gathered some initial data from visits to the stores as well as from the client. Please take a look at the following exhibits.

What are some potential barriers or challenges with the current stores?

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Observations from Pictures (some potential responses)

Mobility challenges
- Stairs and narrow walking paths/spaces may present accessibility and movement challenges for some customers with disabilities
- Counters / collection points may present challenges for customers with assisted mobility devices - e.g. height of counters and no space for walking/movement support equipment like wheelchairs
Visual challenges
- Menu boards are placed high up and seems far away, some texts may be too small to read
Audio challenges
- While baristas may call out customer names when the order is done, there does not appear to be any other visual cue or device to understand when orders are complete

Observations from Table

There is a consistent experience gap for customers with disabilities
- In every format, NPS for customers with disabilities is lower than overall NPS
- This suggest systemic issues across the network and not just one format
- Biggest gaps are in Café and Flagship formats
Café should be a key focus due to both commercial & inclusion dynamics
- Café's are the core format of the business (both # of stores and % of sales)
- Improving inclusive design in these stores would touch on majority of revenue and a meaningful share of disabled customers
Drive-thru is performing relatively the best among all formats, though still has room for improvement
- Hypothesis could be that format is inherently more accessible for many people with disabilities
- However its small share of sales makes this less of a priority

A good answer will try and structure the responses in a logical way - this is one way of structuring the responses, although others are also possible.

A strong candidate will also make the realization that there is significantly more room for improvement for all formats, because the % of customer visits that are from disabled people are significantly lower than the national average (1 in 4)

Note for Interviewer

Note for observations from the pictures: There is no 'right' answer here, the purpose of this exercise is to test the creativity and 'common sense' of the candidate. Thus credit the candidate as long as the answers are reasonable enough. While this may seem like an unconventional data interpretation, do note that a similar activity is sometimes done by consultants on projects when a site visits or mystery shopping is performed, I myself have done several site visits where I've had to observe and develop hypotheses on painpoints / areas for improvement.

Notes for observations from table: NPS = metric in customer experience programs to measure customer loyalty and satisfaction. It is based on a single question: "How likely are you to recommend this company/product/service to a friend or colleague?". Customers rate on a scale of 0 to 10. For the sake of simplicity, lets take it that 10 is good/positive and 0 is bad/negative. In reality the scoring is abit more nuanced but we do not need to go into that for the purpose of the case

Additional clarifying information - only give if candidate asks

As a benchmark, most casual F&B chains have an NPS of about ~60
Flagship stores: large, standalone stores that typically have the widest range of menu items and merchandise
Premium stores: smaller format, focused on specialty coffee and premium brews
Café: Normal café styles, typically located in malls or within buildings
People with disabilities: This is self declared on the survey
% of customer visits - it is fine if either the candidate interprets this as either % of unique customers who identify as disabled, or simply % of visits (not necessarily unique customer)

Question 3: What % would a store's customer base need to grow by in order to make this a financially viable initiative?

Please refer to the assumptions in the Additional Information section

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Step 1: Solve for incremental revenue needed per store

Incremental revenue needed per store = one-time capex / contribution margin = $275,000 / 22% = $1,250,000

Step 2: Solve for number of new customers needed

New customers needed per store = incremental revenue needed / average revenue per customer = 1,250,000 / 435 = ~2,900

Step 3: Solve for change in customer base

Existing # of customers = annual revenue per store / average annual revenue per customer = $1,500,000 / $435 = 3,448

Therefore, customer base per store would need to grow by 2,900 / 3,448 = 84%

A good candidate should make the observation that this effectively means that customer base has to almost double for this investment to make sense, which seems quite aggressive. A good candidate should also discuss other considerations from this idea, including but not limited to: e.g. whether the stores have the capacity to handle the additional growth; how to implement the changes while minimizing disruption to the existing business

A strong candidate will push the discussion further in implications:

This number assumes the payback is entirely in 1 year, which is quite short. If we assume a longer but reasonable payback of ~5 years, it means that on average we need to increase customer base by ~15% per year which on the surface does sound more reasonable
In 5 years time, assuming existing customer base grows at a rate of ~5%, the 3448 base will become ~4400
However, comparing the share of new disabled customers with existing customer base, that will mean that in 5 years time the share of customers with disability will be 2900/4400 = ~65%
Given that we know that 1 in 4 adults have a disability, the number of new customers needed still seems very high (as we are above the population distribution average)
Therefore, either the client needs to identify ways to reduce the remodelling costs, or be willing to proceed with it if it is a strategic decision

Question 4: The client wants to accelerate this inclusive design initiative - what are some partners or partnerships they should be considering?

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Question 5: Recommendation

You are buying coffee at one of the client's flagship stores below their headquarters, and bump into the CEO. He recognizes you and asks you for an update of the project.

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McKinsey Unconventional Case: Inclusive Cafes i

Case Prompt:

Question 1: What issues would you investigate to help diagnose current challenges to an inclusive design at the stores?

Question 2: What observations can you derive from the data collected?

Question 3: What % would a store's customer base need to grow by in order to make this a financially viable initiative?

Question 4: The client wants to accelerate this inclusive design initiative - what are some partners or partnerships they should be considering?

Question 5: Recommendation

McKinsey Unconventional Case: Inclusive Cafes