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Customer Engagement

Getting Personal in the McDonald’s Drive Thru

McDonald's bets big on AI-powered personalization technology

The world’s largest burger maker plans to add personalization to its special sauce, with a new tech acquisition announced this week. McDonald’s plans to pick up a personalization and decision logic software company in a play that’ll smooth the path to more personalized ordering options for customers at drive thrus, self-serve kiosks, and through mobile ordering.

The acquisition of Dynamic Yield is part of McDonald’s tech-driven Velocity Growth Plan, and is meant to help provide convenience to customers “on their terms,” says Steve Easterbrook, president and CEO at McDonald’s.

“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 more personalized experiences for our customers,” he said.

While terms of the deal were not disclosed, a Wall Street Journal report estimated the transaction to be around $300 million.

Personalization Starts at the Drive Thru

The investment in Dynamic Yield’s AI-powered personalization technology offers a progression on the $6 billion investment McDonald’s has made in the last few years to makeover restaurants with digital menu boards and self-serve kiosks.

McDonald’s customers will first see the technology deployed in the drive thru, which the company says will help it to customize customers’ menu options. With Dynamic Yield’s personalization platform, drive thru customers will see individualized and contextual menu options based on the time of day, weather, current restaurant traffic, and trending menu items.

This kind of decision technology is common on the web, but this will make McDonald’s one of the first companies to integrate decision technology into the point of sale at physical stores. McDonald’s said it tested this technology in several U.S. restaurants last year, and after the acquisition is closed, it will deploy this technology at U.S. restaurants this year, with the goal to continue the deployments worldwide.

McDonald’s also plans to roll out the technology across its entire digital customer experience stack.

“The technology has the capability and flexibility to work on all of our digital platforms. We can integrate it into the global mobile app, we can integrate it into our self-order kiosks and therefore we can start to link this entire technology infrastructure together,” Easterbrook said.

Overcoming Retail’s Personalization Obstacles

While many retail industry experts believe creating a personalized consumer experience is crucial to retailer success, challenges lie ahead. Many consumers are wary of tracking by companies that often accompanies personalization efforts. Additionally, not all retailers are on-board with personalization. In the State of Retailing Online study released last year by the National Retail Federation and the research firm Forrester, personalizing the shopping experience was cited by only 15 percent of store-based retailers as a priority. Retailers who responded in that survey were also not overwhelming embracing technology, only 12 percent said they were focused on using technology to better enable store associates to help customers and improve the in-store experience.

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