McDonald’s has made its third technology acquisition this year with the purchaseOpens a new window of Apprente, a Silicon Valley start-up that uses artificial intelligence software to improve understanding of fast food restaurants drive-thru orders.
McDonald’s, the world’s largest restaurant chain, has already tested the technology in several Chicago-area outlets and is expected to introduce it across the United States. The terms of the deal were not disclosed.
The Apprente voice assistant allows for faster, simpler and more accurate order-taking, McDonald’s executives said, and the system’s AI technology could potentially be incorporated into mobile ordering and kiosks.
McDonald’s serves about 68 million customers a day, and most are understood to order at its drive-thrus. Automated orders could vastly improve the speed and efficiency of the business, increasing earnings and potentially leading to reductions in workers, many of whom now just earn minimum wage.
A different type of voice assistant
Making sense of people’s drive-thru orders can be challenging for automated voice assistants because they must interpret a wide variety of accents and speaking styles in noisy outdoor settings with cars in the background, drivers shouting into poorly maintained speakers and children screaming in back seats.
Apprente was established in 2017 by two Israeli technology experts to focus on conversational AI systems and quickly began specializing in fast food outlets.
The start-up’s technology takes a different approachOpens a new window from most voice assistants. They typically use a speech-to-text method that transcribes speech into the written word and then interprets the transcription. By contrast, Apprente uses a speech-to-meaning method that processes the speech and interprets meaning directly from the audio.
“The company believes this provides a better approach for customer experience-related use cases,†analyst Raul Castañon-Martinez writesOpens a new window in a paper for 451 Research, “particularly in noisy environments such as restaurants and public areas or in cases where customers tend to use colloquial, poorly-structured language, resulting in low-accuracy speech recognition.â€
Since just a few items are displayed in outdoor menus, Apprente’s artificial intelligence technology can focus on interpreting the audio signals, unlike broad-based voice assistants that need to write everything down before understanding.
The Golden Arches on a tech drive
The acquisition is part of a driveOpens a new window by McDonald’s to use the latest technology to improve customer service.
In March, it acquired the artificial intelligence company Dynamic Yield, which focuses on personalization and decision logic. Its technology analyzes data to alter menu displays according to the time of the day, the weather, the popularity of items and the number of customers waiting.
McDonald’s was reported to have paid $300 million for the acquisition, its biggest purchase in 20 years. The burger chain hopes it will more than pay for itself by helping customers buy more items.
The technology has been deployed in more than 8,000 restaurants in the United States and will be integrated into most drive-thrus in America and Australia this year.
McDonald’s also acquired a 9.9% stake in PlexureOpens a new window , a New Zealand-based mobile software developer, for its own app.
These moves show that the Golden Arches is serious about introducing automation across its company. More tech acquisitions are expected.
The chain has experimented with automated deep-frying robots for chicken, fish and fries and has tested automated beverage dispensing.
Affecting fast food head counts?
Automation can help speed up orders and drive more customers through the system, but it’s unclear exactly how it will affect employment.
With a nationwide labor shortage and the push among some state government to raise the minimum wage to at least $15 per hour, the chain clearly wants to cut wage expenses through automation. But the restaurants would still need workers to engage with customers to resolve glitches and problems in the automated systems.
Automation has already replaced millions of factory workers in the United States over the past two decades. The fast food industry could be the next area that finds ways to lay off workers while switching to robots and AI-driven automated services like drive-thru outlets.
But it’s not yet clear whether it will be economical or practical to invest in expensive machinery to replace relatively low cost workers.