Big — possibly weird — changes are coming to your local McDonald’s drive-thru.
On Monday, McDonald’s made its first big move into tech and its largest acquisition since it bought Boston Market in 2000. The company spent $300 million to acquire Dynamic Yield, a New York-based startup that uses artificial intelligence to “personalize customer experiences” — compiling data about how individuals make their sandwich and soda purchase choices and using that data to predict how other individuals will make them.
Then, digital menu displays will make super-specific adjustments, store-by-store. So hypothetically, if the McDonald’s next to a high school gets a regular post-basketball-game rush of teens, its menus could learn this over time and start highlighting the Dollar Menu and combo deals — big calories for your buck, and your youthful metabolism!
The “decision technology” will be used first in the outdoor menu boards at McDonald’s drive-thrus, where it will analyze purchase patterns based on the weather, traffic, time of day, and “trending menu items” and instantly rearrange the display to feature a more desirable combination of items. (McDonald’s used some more rudimentary tech back in 2015 to run an experiment with weather-based menus, highlighting McFlurries when it was hot, lattes when it was cold, etc. and saw a small spike in sales.)
When it’s eventually incorporated into self-serve kiosks and the McDonald’s app, it will also be able to make AI-informed suggestions of additional items based on what a customer has already picked out. (E.g. If you add something super salty to your order, you might also want a soda.)
In a press release, Dynamic Yield is described as providing “a unified view of the customer, allowing the rapid and scalable creation of highly targeted digital interactions.” Michael Provenzano, CEO of the ad-tech company Vistar Media, told Adweek that retailers are increasingly thinking about screens as virtual store shelves and want the ability to get to know “the audience behind that screen” to “change what’s displayed based on past purchase history or movement patterns.”
To put it in less clinical terms: This move by McDonald’s is one of the biggest (but definitely not the first) incorporations of machine-learning into a classic retail setting. Walmart bought Israeli artificial intelligence startup Aspectiva last month for its language-processing technology, to help it analyze millions of customer opinions at once. Last spring, Nike acquired both the New York data analytics firm Zodiac and the Israeli computer vision startup Invertex, to build out its tech team and create its customization-centric app and flagship store. Nordstrom has two artificial intelligence startups. H&M has an entire venture capital fund that it uses to invest in similar companies.
It’s all part of the Amazon-ification of brick-and-mortar retail and evidence that old-school methods of stocking inventory and guessing at customer’s wishes is no longer cutting it. While this shift is not necessarily alarming in the same way as Walgreens’ decision to install freezer doors that track customers throughout the store and serve them custom advertisements, it is possibly a harbinger of nonstop physical space tracking to come.
After all, McDonald’s has 38,000 stores and serves 68 million customers every day — that’s close to 1 percent of the global population, and far more than a representative sample. You can imagine that regularly logging the way they shop and eat and pay and interact with displays and servers would eventually become a pretty interesting data set. You can also imagine that it would be nice to see an offer for a cheap latte and a box of Cinnamon Melts on a rainy day.
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