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McDonald’s Acquires Personalization Provider Dynamic Yield For $300 Million

McDonald’s Acquires Personalization Provider Dynamic Yield For $300 Million

McDonald’s is getting into the personalization game through the acquisition of Dynamic Yield, an AI-powered omnichannel personalization solution provider. The restaurant chain will harness Dynamic Yield solutions to provide personalized drive-thru menus that show food items based on time of day, weather, current restaurant traffic and trending menu items. McDonald’s paid $300 million for the company, people familiar with the matter told Wired.

McDonald’s began testing this technology at certain U.S. restaurants in 2018 and will begin rolling it out to other domestic locations in 2019 after the transaction closes. The company also will begin integrating personalization technology into other digital touch points, including self-order kiosks and the McDonald’s Global Mobile App.

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The deal will help McDonald’s deliver better-targeted menus at the drive-thru window, where major chain restaurants make an average of 70% of their sales, according to a study by QSR. The AI-powered personalization initiative could help McDonald’s upsell products to customers based on their orders, such as by detecting an order made for children and suggesting a snack for the parent picking it up.

“When you look at the answers that this decision engine provides, it may not seem so obvious to begin with, but for customers it makes sense,” said Daniel Henry, McDonald’s EVP and global CIO in an interview with Wired. "It’s not just about the individual, it’s also taking training information from other customers. It’s only going to get smarter and smarter, the more customers interact with it.”

The use cases for personalization could expand in a number of directions going forward, according to McDonald’s CEO Steve Easterbrook. The company already uses geofencing to detect when a mobile app customer is approaching a restaurant so their order can be prepared. This capability could be stretched to detecting the smartphone itself on an opt-in basis. Additionally, license plate recognition could help the system identify shoppers and further adjust the menu based on their purchase history.

Dynamic Yield will remain a standalone company following the transaction, and McDonald’s will continue investing in the company’s core personalization products. Dynamic Yield will continue working alongside its current partners and seeking to attract future clients as a solution provider.

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