When you think of McDonald’s, your first thought probably isn’t how they’re a thought leader in the world of artificial intelligence.
You associate Mickey D’s with McFlurries, McMuffins, and their mouthwatering fries. But on top of thinking about all of their widely popular food, you soon may be thinking of McDonald’s as a trailblazer for partnerships between fast food restaurants and companies that specialize in AI and machine learning technology.
You might be wondering what artificial intelligence and machine learning are:
Artificial intelligence (AI) and machine learning (ML) are two elements of computer science; the former deals with machine intelligence akin to human intelligence, and the latter deals with machines learning from experience and patterns and then utilizing those patterns to help make decisions on its own.
On March 25, 2019, McDonald’s released a statement indicating they would be acquiring Dynamic Yield, a tech company that specializes in personalization software by using machine learning and predictive algorithms.
Dynamic Yield touts that they have “the industry’s first Personalization Anywhere™ platform,” meaning they use ML and AI algorithms to reach target audiences in innovative ways. Dynamic Yield is a platform that powers user experience with a brand or product based on individualized and personalized targeted advertising. The company relies on machine learning technology to analyze user data and learn from it by identifying patterns and making decisions on its own.
Before even partnering with McDonald’s, Dynamic Yield’s Personalization Anywhere™ platform was already being used to power connections between over 600 million users and brands they interact with. Some previously-existing customers include Sephora, Vineyard Vines, and Cintas, to name a few.
Dynamic Yield’s inventive software helps businesses to better connect to their customers by providing personalized experiences, recommendations, one-to-one messaging, and more. It seems that regardless of the partnership with McDonald’s, Dynamic Yield was doing fine on its own.
Still, this groundbreaking acquisition opens doors for both companies.
Since 2018, McDonald’s has actively been integrating touchscreen kiosks at many of its restaurants, eliminating the need for cashiers to take the orders and ring customers up. While people still have the option to use either a human cashier or the touchscreen kiosks to place their orders, kiosks like these were implemented to cut back on wait time and maximize the accuracy of taking complex orders from multiple customers, especially during peak hours.
This technological addition was a stepping stone to the partnership between McDonald’s and Dynamic Yield. In addition to electronic ordering kiosks being added to many McDonald’s locations, e-ordering signs have begun popping up at McDonald’s locations in their drive-thru lanes.
So how does this factor into the Dynamic Yield partnership? Well, to reiterate, Dynamic Yield uses ML technology to provide personalized customer experiences based on user data and external factors. Some of these “external factors” include time of day, what season it is, and length of time certain food products take to make in accordance to the number of customers waiting for food inside of the restaurant and outside in the drive-thru lanes.
Thus, McDonald’s intends to use Dynamic Yield’s Personalization Anywhere™ platform to enhance user experience (UX) based on external factors powered by decision technology. This technology will also suggest items to customers based on other items they already have in their pending orders. For instance, if a customer selects a McChicken, the decision technology integrated into the ordering kiosks might suggest that the customer add on a medium French fry and a medium Sprite to ‘complete’ their meal.
This decision technology is expected to roll out at McDonald’s locations – as well as their mobile app – throughout 2019.
The goal of the partnership with Dynamic Yield is simple: find a way to use AI technology platforms to increase profits by making customers spend more.
People are becoming increasingly comfortable with technological advancements, which includes integrating artificial intelligence into already-existing products (touchscreen kiosks and electronic drive-thru kiosks). McDonald’s knows this and is using that knowledge to drive profits in a way that seems well-thought-out, but really is just another tactic they’re using to drive sales.
In essence, though McDonald’s may mask this partnership as beneficial for customers, it’s more beneficial for their bottom line.
Other than being a crafty means to boost sales, McDonald’s is spearheading technological advancements by using artificial intelligence and machine learning to make waves in the difficult-to-penetrate fast food universe. Though their motives are less than altruistic, the means by which McDonald’s is approaching sales tactics are creative if nothing more.
Integrating tech into their business model has been a goal for McDonald’s and other similar fast or fast-casual restaurants. To retain customers, it's crucial to “get with the times” and have options that appeal to users of all ages and technological skill levels.
For instance, in 2018, McDonald’s pushed their app with discounts and deals for app-only customers, such as free fries with a $1 purchase. Similarly, Burger King held a promotion where app users were able to buy a Whopper sandwich for one-cent if they were within 600 feet of – you guessed it – a McDonald’s.
What a saucy app marketing tactic!
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