McDonald's makes $300 million bet that AI can sell you a burger

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

McDonald's to buy Israel's Dynamic Yield

McDonald's plans to pay $300 million to acquire technology company Dynamic Yield, whose software will allow the fast food giant to personalize its digital menu boards and push additional items based on what a customer has just ordered.

The system will analyze data about the weather, traffic, historical sales and your current orders, so it can add suggestions of other products you might enjoy.

Dynamic Yield, an Israeli startup specializing in artificial intelligence (AI) personalization, will be purchased by McDonald's at a value of over USD300 million.

CEO Liad Agmon of the Tel Aviv-based artificial intelligence company Dynamic Yield, which was acquired March 25, 2019, by USA fast-food giant McDonald's.

Steve Easterbrook, McDonald's President and CEO claims that technology is an important part of their Velocity Growth Plan. The technology has already been piloted in several of McDonald's USA branches throughout 2018, the company said. This acquisition is an attempt to use personalized digital technology for better customer experience. The menus will also suggest add-on items to customers, it said.

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It will also be added to its digital customer experience touchpoints, such as self-order kiosks and it mobile app.

As for the backend of the restaurant, former McDonalds U.S. CEO Ed Rensi famously said in 2016 that robots would soon enough replace humans in the fast-food industry.

McDonald's has acquired Dynamic Yield, a company that focuses on personalization and recommendation technology, in a move that the company hopes will accelerate its digital transformation. R.J. Hottovy, consumer strategist with Morningstar, said McDonald's has been pretty successful in recent years for simplifying its operations. Remodeled restaurants saw sales lifts of 4 to 6 percent in global markets, as Ozan told McKinsey in a January interview, but the sales have been slower to rise in the U.S.

"The reality is, the technology spend is going to be at a high level for a while", McDonald's CFO Ozan said earlier this month.

These intelligent menu boards have already been tested at various United States restaurants last year and, after generating successful results, the AI-powered menus will be officially rolling out this year, first in the USA and then later to worldwide markets. He said McDonald's is expanding the role that technology will play in McDonald's future "and the speed with which we'll be able to implement our vision of creating more personalised experiences for our customers". Dynamic Yield's website says customers have included Urban Outfitters Inc., Ikea and HelloFresh.

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