- McDonald's is one of a slew of consumer-facing companies that are trying to harness artificial intelligence and machine learning to better understand customers.
- The fast-food chain is, among other things, testing out how AI can be used to scan license plates so McDonald's knows a customer's profile before they order in the drive-thru.
- The company is spending big on the efforts, including purchasing two tech-forward startups, launching a new Silicon Valley-based tech team, and hiring for new positions that focus on AI.
McDonald's is turning to artificial intelligence and machine learning to anticipate what you plan to eat before you even place an order.
It's part of a move underway across corporate America to better understand consumer behavior to tailor offerings to improve operational efficiencies, cut down on costs, and spur more sales.
At McDonald's, technology like scanning a license plate in the drive-thru to know the customer profile is part of an attempt by the fast-food chain to increase sales of items like Big Macs and Chicken McNuggets. Like other companies, the goal is to mirror the ability of Amazon to deeply know its consumers and adjust interactions with them accordingly.
"You just grow to expect that in other parts of your life. Why should it be different when you're ordering at McDonald's?" chief information officer Daniel Henry told the New York Times. "We don't think food should be any different than what you buy on Amazon."
Currently vacant positions help illuminate McDonald's ambitions in this area. The company is hiring for, among other things, a senior director to help lead the development of new tech offerings for the drive-thru, a communication change manager to help push the adoption of digital internally, and a senior manager of technology innovation to support the development of new applications.
McDonald's declined an interview request for this article. The company also declined to outline how many tech-focused positions it plans to hire for or the amount of total investment it expects to spend on digital.
To date, McDonald's appears not to have seen a material impact from its tech investments. Revenue and profits fell below Wall Street expectations during the most recent quarter.
But such initiatives often take as long as a decade to manifest, and the projects the chain is implementing now will define the future of how customers order their favorite items.
Pushing technology at 'a speed that it's never gone before'
CEO Steve Easterbrook made modernizing in-store technology a key focus of his strategy when he came onboard in 2015. And it had to happen fast: he'd promised investors a quick turnaround.
"Technology needed to go at a speed that it's never gone before," former-chief information officer Frank Liberio said previously. "I remember him talking to me saying, 'Frank, I've never not lived up to a commitment to Wall Street, so this is something you have to figure out how to get done.'"
One of the first initiatives for Liberio was the development of the McDonald's app and scaling its delivery partnership with Uber Eats and other services. The company, however, is on to much more advanced applications. And to support that push, it's spending big.
McDonald's, for example, purchased AI company Dynamic Yield for $300 million. Technology from the firm that helps cater recommendations to customers based on the time of day or weather is now in over 9,500 US locations and will be in all stores by the end of 2019, Easterbrook recently told investors.
The company also bought voice-technology startup Apprente. The chain is using that acquisition to help enhance its voice recognition capabilities, a sign of where the ordering process is heading. The senior director of drive-thru that McDonald's is hiring for, for example, would be tasked with, among other things, creating products that cover "voice order taking."
To house all the innovation efforts, McDonald's launched what it calls "McD Tech Labs," a Silicon Valley-based team of engineers and data scientists. It's part of a trend in corporate America to launch separate "innovation hubs" within the organization that is tasked with developing and scaling new products.
For many consumers, the offerings that companies like McDonald's or Walmart roll out will be their first experience with AI and machine learning. That makes those efforts even more important, as they have the opportunity to differentiate the organizations over the next decade or undermine overall sales growth if the initiatives are rejected by customers.