Use of artificial assistants spreads to drive-throughs
Last week, McDonald’s announced the acquisition of Apprente, a start-up based in Silicon Valley that describes itself as a “leader in the field of conversational voice-based technology”. Founded in 2017, Apprente develops technology that uses artificial intelligence (AI) to understand speech in multiple languages. The acquisition comes as the fast-food company tries to automate and quicken operations and cut labour costs.
McDonald’s plans to use Apprente’s technology to bring an AI-based voice assistant to its drive-throughs in the US, which will become a first point of contact. This is expected to speed up service as McDonald’s faces tough competition from smaller burger chains and declining fast-food traffic in the US.
The restaurant chain has been testing Apprente’s technology in several locations and expects it to enable “faster, simpler and more accurate order taking” at its drive-throughs. As part of its efforts to weave technology into its labour chain, McDonald’s is setting up McD Tech Labs, a part of its global technology team, with Apprente employees as founding members.
McDonald’s acquisition of Apprente is its third tech foray in 2019. In April, it bought Dynamic Yield, a company that develops technology aimed at delivering more personalized customer experiences. Its solutions are used to create dynamically customized menus for drive-through locations based on variables such as the weather, time of day, current restaurant traffic and trending menu items. For example, it could focus the menu on cold drinks in hot weather and show breakfasts in the morning. If a restaurant is particularly busy, it might push items that are quicker to prepare, to ease pressure on the kitchen. Dynamic Yield’s technology is deployed at more than 8,000 McDonald’s restaurants in the US, with plans to offer it in almost its drive-throughs by the end of 2019.
Earlier in the year, McDonald’s also took a minority stake in Plexure, a New Zealand-based mobile app technology company, to enhance the experience it provides with its mobile app.
McDonald’s isn’t the only fast-food chain looking to automate operations and cut costs in an expensive labour market. Others are also exploring automation, as minimum wages rise, particularly in US states where the labour market has become tight. According to a survey conducted by the National Restaurant Association earlier in 2019, a third of restaurant operators are struggling to fill open jobs. In July, Starbucks announced its acquisition of Brightloom, a company that had previously operated a chain of restaurants without waiters. McDonald’s said it plans to expand its presence in Silicon Valley by hiring more tech experts, as it seeks to develop future innovations.
It’s difficult to think of McDonald’s as a Silicon Valley tech company in any respect, but it has always had the ability to adapt. Now, with a bigger focus on computing power, McDonald’s — like many retail companies — seems to be learning from Amazon, optimizing revenue and margins at point of sale by implementing cutting-edge AI-based technologies.
Use of AI as a customer-facing interface is still in its early stages. A growing number of businesses will come to rely on AI-powered artificial assistants including telecom operators and financial institutions. Many of these companies hope to deploy existing platforms, particularly Amazon’s Alexa and Google’s Assistant and their accompanying smart speaker interfaces, to allow customers to perform simple tasks such as querying their bill or checking their bank balances.
Existing major platforms are seeing enormous levels of investment, with over 5,000 staff developing Amazon’s Alexa, for example. So, it’s hard to see why McDonald’s concluded it would be better off owning its own system. Although the scope of conversations with McDonald’s voice agent will be more limited than those with Alexa, the company will need to put a lot of resources into developing and maintaining the technology to serve enough languages and dialects, and to avoid a PR disaster like Microsoft experienced with its Tay bot, which had its AI system learning sabotaged by users.
Furthermore, users would generally prefer to deal with a familiar assistant than have to learn the quirks of interacting with a new one. So, we expect some of these home-grown initiatives to fail, as companies change course and revert to dealing with one of the better-established, large platforms.
Nonetheless, for companies like McDonald’s looking to remain competitive in the future, chips don’t just mean potatoes any more.
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