McDonald’s could soon use AI to create personalized menus in bid to boost sales, after purchasing Israeli machine-learning startup for $300 million
- McDonald’s bought Dynmic Yield, an A.I. powered tech company base in Israel
- The restaurant says the purchase will help personalize menus and boost sales
- Dynamic Yield can change menus based on time, location, preference, and more
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McDonald’s is looking to supercharge sales by using A.I. backed software capable of tailoring products to customers in real-time.
America’s most iconic fast food chain announced that it has acquired an Israeli company, Dynamic Yield, whose software will use machine-learning to adapt digital menus to feature products based on time, location, preference, demand and more.
The Wall Street Journal reported that McDonald’s deal to purchase Dynamic Yield was closed at $300 million but neither company has confirmed.
McDonald’s has revamped its image across the world by deploying a mobile app, renovating stores, and now buying a tech company to help personalize menu items.
WHAT IS DYNAMIC YIELD?
McDonald’s purchase Israeli company, Dynamic Yield which employs data and analytics to increase sales.
The tech company will help McDonald’s develop dynamic menus capable of tailoring products based on time, location, and even the weather.
McDonald’s purchasing of the company is likely in response to increased competition in U.S. markets.
A representative did not respond to a request for comment before publication.
According to Dynamic Yield, the software will be deployed both at McDonald’s outdoor drive-thru menus, the restaurant’s mobile app, as well as digital ordering kiosks within stores.
On Dynamic Yield’s website, the company describes a mix of services that employ data and analytics to measure and respond to consumer behavior and preference.
Its testimonials boast substantial uptick in sales and engagement for brands in online retail and more.
McDonald’s says it plans to begin rolling out Dynamic Yield’s technology at its stores this year.
‘With this acquisition, we’re expanding both our ability to increase the role technology and data will play in our future and the speed with which we’ll be able to implement our vision of creating more personalized experiences for our customers,’ said Steve Easterbrook, President and CEO of McDonald’s in a statement.
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While McDonald’s reported sales growth in 2018, which the company attributes to delivery and mobile app ordering, in the U.S. — the restaurant’s key market — store traffic receded.
Breakfast, in particular, has been an area of concern according to a report from ABC News.
With added competition from direct rivals like Taco Bell, McDonald’s has been losing its share of morning-time customers.
Time, location, weather, and preference are among factors used by Dynamic Yield to personalize menus.
To help boost its brand ‘stickiness’ the company has launched a sprawling, and costly redesign of its stores across the world to the tune of $1.4 billion in 2018 for its U.S. stores alone.
The company expects to spend another $1 billion this year, says ABC.
In a statement regarding the acquisition of Dynamic Yield, McDonald’s said the newly purchased tech company would continue be kept in tact and continue to serve its many client which include Urban Outfitters, PacSun, and meal delivery service, Hello Fresh.
HOW DOES ARTIFICIAL INTELLIGENCE LEARN?
AI systems rely on artificial neural networks (ANNs), which try to simulate the way the brain works in order to learn.
ANNs can be trained to recognise patterns in information – including speech, text data, or visual images – and are the basis for a large number of the developments in AI over recent years.
Conventional AI uses input to ‘teach’ an algorithm about a particular subject by feeding it massive amounts of information.
AI systems rely on artificial neural networks (ANNs), which try to simulate the way the brain works in order to learn. ANNs can be trained to recognise patterns in information – including speech, text data, or visual images
Practical applications include Google’s language translation services, Facebook’s facial recognition software and Snapchat’s image altering live filters.
The process of inputting this data can be extremely time consuming, and is limited to one type of knowledge.
A new breed of ANNs called Adversarial Neural Networks pits the wits of two AI bots against each other, which allows them to learn from each other.
This approach is designed to speed up the process of learning, as well as refining the output created by AI systems.
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