McDonald's buys AI startup to customize its drive-through windows

McDonald's cuts a big check to buy tech platform Dynamic Yield. The tech provider will allow McDonald's to offer personalized items on its digital drive-thru menu boards

In a press release, McDonald's said it will use Dynamic Yield's technology to customize its drive-through windows by changing in real-time based on the time of day, weather, trending menu items and current restaurant traffic.

McDonald's is investing in AI technology to encourage customers to order more.

McDonald's is the world's largest fast-food chain, with almost 38,000 locations in more than 100 countries. At the end of 2018, it had deployed self-ordering kiosks to about 17,000 restaurants, brought digital menu boards to 21,000 restaurants and added its order and pay app to 22,000 restaurants, according to the company's annual report. More broadly, McDonald's can glean valuable insights by gathering data on its 68 million daily customers.

Upon closing of the deal, McDonald's will become sole owner of Dynamic Yield, which will remain a standalone company. The software will track service times at individual outlets and suggest items that are easier to make during peak hours so drive-thrus run smoother, among other features.

Under Easterbrook, who became CEO in 2015, McDonald's has incorporated technology including self-order kiosks and digital menu boards as part of a $6 billion overhaul for its USA restaurants announced previous year.

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The company said it would roll out the technology at restaurants in the United States in 2019 and then expand the use to other top global markets. Once the order is placed, the display would also recommend additional items based on the customer's preferences.

Liad Agmon, co-founder and CEO of Dynamic Yield, added: "We started Dynamic Yield seven years ago with the premise that customer-centric brands must make personalisation a core activity".

McDonald's CEO Steve Easterbrook said the acquisition was connected to its "Velocity Growth Plan" announced in 2017, which focused resources on McDonald's mobile app and its Experience of the Future stores. R.J. Hottovy, consumer strategist with Morningstar, said McDonald's has been pretty successful in recent years for simplifying its operations. In 2018, McDonalds announced it was updating thousands of stores in the USA with self-service ordering kiosks. And then it will be expanded to other top worldwide markets.

Even though McDonald's has acquired Dynamic Yield, it will continue to work with its clients like Ikea, Sephora, and Urban Outfitters.

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