Improving the Quick-Serve Restaurant Industry Through AI and Machine Learning
Sat, April 17, 2021

Improving the Quick-Serve Restaurant Industry Through AI and Machine Learning

With AI constantly growing, it’s not surprising that it’s now entering the quick-serve restaurant (QSR) industry / Photo by: frantic00 via Shutterstock

 

With AI constantly growing, it’s not surprising that it’s now entering the quick-serve restaurant (QSR) industry. McDonald’s, the pioneer of fast food, is embracing AI not only to increase sales and decrease costs but also to keep up with the increasing demand from its customers. This year, the company acquired tech companies that specialize in AI and machine learning. 

Earlier this year, McDonald’s made a $300 million move to acquire Dynamic Field, a leading provider of automated conversion optimization tools. The fast-food company hopes to create a more personalized dining experience with this acquisition, particularly for drive-through customers. This is part of a larger strategy by McDonald’s to completely automate the drive-thru experience, where an estimated 50% to 70% of fast-food sales are made.

According to Forbes, a global media company focusing on business, investing, technology, entrepreneurship, leadership, and lifestyle, the tech works by recommending food choices based on anything from time to day to weather and geo-trends. The fast-food chain also took a minority stake in Plexure, a mobile app vendor. 

Recently, McDonald’s agreed to acquire Apparente, a Chicago-based company that uses AI to understand drive-thru orders, which could cut down on service times. The tech could be used in its self-order kiosks and mobile app soon. The chain is also currently renovating its US stores with self-order kiosks, digital menu boards, and other tech upgrades. 

But McDonald’s isn’t the only fast-food company investing in AI and other recent technologies. Companies like KFC and Dominos have been experimenting with using drones for delivery. Dominos had even used autonomous cars in New Zealand to deliver pizzas. Aside from them, Panera, Starbucks, and more are now using mobile ordering and automated kiosks to eliminate long lines and allow employees to focus on filling orders faster. 

How AI is Helping Fastfood Chains

Today, more and more fast-food chains are advancing their operations and increasing their performance through the help of AI. This helps them in increasing efficiency and revenue, improving customer service, and reducing operational costs. In recent years, fast food companies have been heavily invested in AI technologies, analytics, and automation. Thus, we can expect that the trend will continue to expand as AI grows increasingly advanced and becomes more accessible. 

Earlier this year, Valyant AI, a Denver-based software company, launched Holly, an enterprise-ready AI platform for the QSR industry. Holly has shown promising results as it can reduce customer wait times by 10% to 25%. According to HR Technologist, the world's leading source for HR technology news, research, product comparisons, and expert views, fast food chains that have used it reported being able to interact with customers at the window instead of dividing time between the window and drive-up speaker; effectively managing the cash register; ensuring accurate order preparation; managing time for food preparation, and dealing with the stress and pressure of the job.

Aside from taking orders and providing a better experience to customers, AI has improved the chains’ scheduling as well as integrated inventory, purchasing, and big data insights. AI-powered point-of-sale (POS) systems can also improve efficiency across restaurants since they can monitor goods in stock and place orders based on actual food sales, menus, and recipes. These systems help managers determine whether the cooks are following recipes and proper portion sizes. They also reveal where waste and theft stem from. 

AI data is powerful. This means the more data the fast-food chain has, the more it can leverage machine learning to drive improvements. According to QSR Magazine, the business-to-business magazine for the limited-service restaurant segment, this can help in predicting orders; suggesting staffing levels based on weather, proximity, and sales of businesses; suggesting pricing based on cost of ingredients and actual prices charged by businesses nearby, and more. 

Out of all the technologies that AI can bring, self-kiosks seem to be the most popular. This is because customers appreciate the ability to spend time studying ingredients, photos, and nutritional information as well as easily request more food or drinks as the meal progresses. These not only encourage higher check averages but also tend to reduce the repetitive, transactional demands on servers. 

Today, more and more fast-food chains are advancing their operations and increasing their performance through the help of AI. This helps them in increasing efficiency and revenue, improving customer service, and reducing operational costs / Photo by: Sorbis via Shutterstock

 

Addresses Labor Shortage

It is expected that these recent technologies threaten nearly half of all current jobs in the US alone. The QSR industry will greatly be affected since fast-food chains are highly incented to increase automation and reduce labor costs. While AI and machine learning will reduce the need for some jobs, it’s important to remember that it will also create new ones – even address the issues with the labor shortage. 

Since 2010, fast-food jobs have grown nearly twice as fast as employment. However, it was reported that one important source of workers – teenagers – has dried up. As a result, there are too many quick-serves while not enough workers to fill every available position. Nigel Travis, Dunkin’ Donuts CEO, stated that the labor shortage is one of the biggest problems facing the fast-food industry. The average turnover has reached the highest rate since 1995, and this greatly risks the overall customer experience.

A report showed that 35% of disgruntled customers will stop doing business with a company altogether in light of lousy customer experience. Fast-food chains can use machine learning to automate repetitive tasks and incorporate new information. This can help in improving experiences as well as personalizing user interactions to drive engagement. AI can also provide an intelligent, convenient and informed customer service experience.

Indeed, AI and machine learning have great potential in the fast-food industry, delivering faster services and improved customer experience.