McDonalds announced that it's acquiring artificial intelligence- (AI) powered personalization platform Dynamic Yield for over $300 million, sources told Wired.

online vs traditional in store personalization capabilities
online vs traditional in store personalization capabilities
Business Insider Intelligence

Dynamic Yield will continue to operate as its own company, but its technology is expected to be brought to 1,000 McDonalds locations in the next three months, and all 14,000 US stores as well as its international restaurants over time, giving McDonalds more ability to adapt and personalize its customer experience.

Heres what it means: McDonalds can now be more flexible with its menu presentation to drive sales and improve its operations by leveraging Dynamic Yields technology in combination with its own data.

  • Acquiring Dynamic Yield will enable McDonalds to take advantage of customer data and other information.Dynamic Yield can allow McDonalds to take action based on information like popular items, weather, time of day, and other demand trends by using algorithms and other AI capabilities to figure out what products to push to consumers to increase sales. The restaurant could even eventually recognize consumers license plates and consider their purchase histories for a more personalized experience.
  • These insights will be deployed through the restaurants drive-thru menus and self-service kiosks.The digital interfaces will now change what offerings they present and how they present them based on what the data-driven insights and algorithms determine may be more popular. In a pilot program McDonalds ran in Miami, this included making recommendations for additional products consumers might want to add to their orders and displaying what other items are popular at that individual McDonalds.
  • A dynamic menu can also help McDonalds optimize its operations.In the event that a drive-thru is moving slowly, the menu can highlight simple items to help get its processes back on track, and it can promote complex and expensive products when the drive-thru is running smoothly. This shows how this implementation of AI can go beyond driving sales and help improve the customer experience at McDonalds overall.

The bigger picture: All kinds of brick-and-mortar retailers should be investing in AI and personalization to improve their shopping experience and compete with e-commerce.

Physical retailers in all segments need to find ways to incorporate similar AI and personalization.This process won't be as easy for other retailers since most don't already have screens like McDonalds that can directly employ data insights on demand, but they would be wise to find their own ways to do so. E-commerce continues to grow faster than in-store shopping, and the gap in personalization between online and in-store shopping is a major reason why. Retailers that can find ways to incorporate a wide variety of data and deploy it so it impacts a consumer's in-store shopping experience, either through their mobile device, a store associate, or otherwise, have the chance to bolster their performance despite e-commerces success.

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