McDonald’s recent acquisition of the Tel Aviv-based AI startup, Dynamic Yield, is an exciting move, demonstrating that the 63-year old fast-food chain is looking for ways to stay competitive. Like many large enterprises, McDonald’s has long recognized the value in data, collecting large amounts of data on everything from tractions to customer behavior. However, data is only as valuable as what you can do with it. The acquisition of this new machine learning and AI technology demonstrates the company’s intent to put customer data to work.
This “decision logic” or decision automation technology is intended to help McDonald’s predict consumer preferences and provide real-time, personalized recommendations at the drive-thru. Using extended available data on weather, time of day, local traffic, nearby events, and historical sales data, McDonald’s will predictively suggest add-ons based on someone’s order choices. For example, a customer who orders a happy meal might be presented with a suggested beverage or dessert based on what others have ordered, Wired describes. This will help McDonald’s to improve the speed at the drive-through during busy times by suggesting meals that are simpler to cook, increasing efficiency, customer satisfaction, and consumer purchases.
Though personalization is becoming more and more popular in e-commerce, this real-world application at physical restaurant locations represents a big step in catering to unique customer preferences. This is likely just the first step in the impact that machine learning and AI will have on McDonald’s business. From dynamically-changing menus based on consumer behavior, to predictive analysis leading to optimal order strategy higher up the supply chain, the impact that AI could have for McDonald’s is wide-ranging.
What can enterprises learn from McDonald’s embracing AI?
Cutting-edge enterprises like Amazon and Uber have led the way in technological innovation, consistently raising the bar for the level of convenience that consumers can expect. Older enterprises are now faced with increased competition and disruption, giving even the most successful businesses reason to re-evaluate strategies and contemplate the implications that innovations like AI technology will have on their business. McDonald’s is just one of many enterprises embracing digital-disruption head on, recognizing the value that new technologies can bring across the value-chain, from logistics and distribution to point-of-sale personalizations.
How can AI be implemented in your own enterprise?
The good news: you don’t have to pay $300 million to acquire a cutting edge AI company. There are dozens of platforms that offer opportunities to leverage your enterprise data with AI technology. At Perfect Price, we focus on price optimization for our clients, using our own proprietary AI technology. Pricing is a great example of an application of AI that can be implemented today, without hiring a team of Ph.Ds to build your own.
Similar to how McDonald’s leverages their decision engine to recommend add-ons, Perfect Price uses AI to predict consumer demand and adjust prices in real-time. AI pricing technology like this can be used for dynamic pricing, for simulation of prices based on market changes or product launches or even to analyze historical transaction data. Curious to see how you can implement an AI strategy for pricing in your own enterprise? Request an analysis today!