McDONALD’S INVESTS IN ARTIFICIAL INTELLIGENCE

 

McDONALD’S BUYS DYNAMIC YIELD

Not too long ago McDonald’s released a statement saying they would acquire the Artificial Intelligence tech company Dynamic Yield. The restaurant chain has been attempting to keep competition at bay by providing more digitized and personalized fast food service. According to reports the company will pay at least $300 million dollars for Dynamic Yield. Having tested some of their AI tech at drive-thru windows last year McDonald’s is confident that they will be able to profit long term from hypermodernizing their services. This purchase also represents the largest investment in a company they have made since Chitpotle in 1998.

McDonald's

Mcdonald’s has maintained a huge advantage over many other popular fast food chains combined.

DYNAMIC YIELD

Dynamic Yield is an artificial intelligence company specializing in using algorithms to create a more personalized experience for a user of any given platform or service. They boast powering individualized experiences for more than 600 million users. This company has a wide range of services they can offer so it is no surprise that McDonald’s would go for them. Dynamic Yield has exactly what they are looking for.

WHAT WILL THEY GAIN FROM DYNAMIC YIELD?

CEO Steve Easterbook said in a statement “With this acquisition, we’re expanding both our ability to increase the role technology and data will play in our future and the speed with which we’ll be able to implement our vision of creating a more personalized experiences for our customers.” So far it is clear that a more personalized experience is certainly a part of their long term goals as shown by the introduction of their mobile app. The McDonald’s app not only allows the user to use mobile ordering effectively skipping the drive- thru but it also keeps track of a users choices and uses algorithms to make suggestions on what to order next. This is on par with services like Netflix or Amazon who use algorithms to do the same thing.

Dynamic Yield’s artificial intelligence technology will allow McDonald’s digital drive-thru displays to show menu items based on the time of day and weather. It can also display items based on their popularity and recommend extra items based on what customers have already ordered.

The technology can also gauge how busy a given McDonald’s location is and suggest items that are easier to make during peak hours or increase the availability of items during slow hours. Some of these additions may seem somewhat useless at first but it has been proven time and time again that customers are more likely to buy things that they believe other customers are buying.

McDONALD’S SEEKS TO GAIN A COMPETITIVE ADVANTAGE

The major restaurant chain serves over 68 million customers per day. When the numbers are that high it is easy to see how one would benefit from learning more about the behavior and choices of their customers. It is the same model Google uses to generate more clicks on their ads.

In addition to upgrading their drive-thrus they plan on incorporating this new technology into self-serve kiosks and the mobile app. They will begin in the US but will quickly move to the international market if everything goes well.

The company said in January that the tech overhaul of its restaurants, which they called Experience of the future, would be complete in the US by next year. Experts are quick to point out though that these changes have not only led to a lot of construction related downtime but will make it harder to manage the input and output of cars in the drive thrus and customers in the restaurants. Studies show that a few extra seconds at the drive thru can hurt sales. With stiff competition like Chick-Fil-A (who arguably make better food) McDonald’s needs to keep things in perspective.

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