McDonald’s Turns to Artificial Intelligence to Better Serve Customers

McDonald’s is aiming to use machine learning to target customers’ appetites and personalize their orders.

The worldwide burger chain has made a $300-million investment in such personalization, acquiring Dynamic Yield, an Israeli artificial intelligence start-up.

Dynamic Yield has built technology focused on decision logicOpens a new window , which personalizes products based on customers’ former selections. McDonald’s wants to use the advance to become the fast-food leader in customizing its drive-through windows to meet changing conditions, including trending menu items, time of day and weather.

It’s a way for McDonald’s to push its other technological advances, such as self-order kiosks, to the next level .

“What we hadn’t done is begun to connect the technology together, and get the various pieces talking to each other,” McDonald’s CEO Steve Easterbrook toldOpens a new window  Wired. “How do you transition from mass marketing to mass personalization? To do that, you’ve really got to unlock the data within that ecosystem in a way that’s useful to a customer.”

The concept driving the purchase is predictive analyticsOpens a new window , as McDonald’s works to make better use of the information its customers provide, using it to further push sales by suggesting that customers add a few well-chosen items to their order.

Dynamic Yield, which also includes Ikea, Sephora and Urban Outfitters as customers, sees a host of fields ripe for personalization through its technology. It offers on its web site to customize experiences in industries ranging from financial services to gaming to retail.

The company says its platforms can help companies change formerly static content into personalized experiences, tailor page layouts to visitors’ preferences and automate content personalization on a scale level.

“Let machine learning algorithms dynamically select the most relevant content for each user in carousels, multi-item banners and more, by syncing your personalization campaigns with fresh data feeds and creative libraries,” according to the company’s site.Opens a new window

The beauty of the AI personalization technology developed by Dynamic Yield is that it can capture and analyze the information gathered by various transaction mechanisms, including web, email, kiosks and call centers.

“The platform’s data management capabilities provide for a unified view of the customer, allowing the rapid and scalable creation of highly targeted digital interactions,” writes CrunchbaseOpens a new window in an analysis of the company.

The new technology is all part of McDonald’s gamble that artificial intelligenceOpens a new window can help it become more competitive in a tough industry.

“The AI-powered personalization initiative could help McDonald’s upsell products to customers based on their orders, such as by detecting an order made for children and suggesting a snack for the parent picking it up,” accordingOpens a new window to RetailTouchpoints.

The fast-food company plans to add the technology to 1,000 of its restaurants in the coming months, eventually expanding it to the company’s 14,000 locations.

Artificial intelligence is driving this form of marketing, which is expected to grow in popularity and move into new fieldsOpens a new window .

“There are many tangible benefits of mapping your customer’s journey, including improved efficiency within your internal operations and better end results for sales,” says Greg KihstromOpens a new window , senior vice president of Digital at Yes&, a performance-based marketing agency in Washington, D.C. “Increasingly, marketers are turning to automation, personalization and artificial intelligence to enhance the customer experience within that journey.”

The reason AI-based marketing is so successful is that it works: A 2017 Personalization Report foundOpens a new window that 44% of customers will likely become repeat buyers based on personalized shopping experiences.

And AI-aided menu selections are likely to trigger unplanned spending. Nearly 50% of U.S. shoppers have said that they bought a product in the last three months they had not planned to after the brand made a personalized recommendation.

Company representatives have said they hope eventually to include license-plate recognition as part of their strategy, enabling artificial intelligence to identify your car and make suitable suggestions accordingly.

“When you look at the answers that this decision engine provides, it may not seem so obvious to begin with, but for customers it makes sense,” says Daniel Henry, McDonald’s EVP and global CIO. “It’s not just about the individual, it’s also taking training information from other customers. It’s only going to get smarter and smarter, the more customers interact with it.”