Thursday, April 11, 2019

Big Mac or Big Data?

In late March, fast food giant Mcdonald's announced their plans on acquiring an Israeli based tech company, Dynamic Yield Ltd. The company is known for offering retailers with "decision logic" technology. The offer is estimated to be over $300 million, making it the largest purchase by the company since Boston Market in 1999.

Over the past several years, you may have noticed many technological changes within many Mcdonald's locations, mainly with its menu displays. These technological investments have been made since CEO Steve Easterbrook took over in 2015. Mcdonald's plans on implementing this new AI predictive technology at the drive-thru and ordering kiosks inside the restaurant. In an exclusive interview with Wired, Easterbrook said, "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.”

 In a pilot program in Miami, the algorithm used data not only from historical orders at the location, but also local time, date, weather, traffic, and even nearby events. It can track trends at the location and around the globe causing more potentially effective upsells.

 Personalization will also be focus with the adaptation of the new technology. They plan on using user information (if they are willing to provide) to create a "personal" menu when they arrive. Mcdonald's already uses geofencing technology to know when mobile app customers is approaching to begin the order. This technology can raise privacy and security concerns, so it will be interesting to see how Mcdonald's goes about protecting it. “We will be very sensitive as we learn, as we go forward,” says Easterbrook. “I think over time it’s going to be important to demonstrate that we can offer value back for customers willing to open themselves up to us.”

 Questions:

 1. Do you think AI predictive technology will affect the way you order at the drive-thru?

 2. How soon do you think it will be until other major franchises begin adopting this technology?

3. What privacy concerns, if any, can you think of with this technology being implemented?
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1 comment:

  1. Ryan RouhaniApril 12, 2019 at 9:20 AM

    1) I think predictive technology will become very useful, especially in the field of fast-food markets. For example, what is one way to make fast-food faster? By having the customers anticipated order ready upon drive-up. Sure it may not be exactly what the customer feels like ordering but just the option to potentially save time and have a customer who agrees with the predictive order is one means to cut delay.

    2) I don't think this will become a staple until at least one company shows/demonstrates the benefits and successes predictive personal menus can offer. Hopefully if McDonalds AI ordering is a success we will see other competitors in fast food adopt a similar technology. At that point it may be a like a domino effect where other markets and industries delve into the AI ordering technology.

    3) I personally am someone who is less adamant about privacy issues online. I do think others may find it alarming that geofencing can provide the company with personal data I think as long as the data is related to: "most common item ordered" or maybe "favorite meal during this time" there won't be any issues. Things will get dicey if people find out McDonalds is accessing things like private information or bank statements.

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