April 11, 2019

While mergers and acquisitions haven’t exactly been the calling card of fast food giant McDonalds in recent years, it appears they’ve jumped head-first back into the game with an interesting future-facing move a couple of weeks ago.

On March 25th, McDonalds announced the acquisition of Dynamic Yield for more than $300 million USD, their most significant acquisition in 20 years. The tech company, dually headquartered in New York and Israel, specializes in A.I.-driven personalization and decision logic technology. It’s a move that could dramatically impact the future of the drive thru ordering experience.

Anyone who has ever shopped online has encountered decision logic of this kind before. For example, when you view a product on Amazon, you will be prompted with other items on the product page listed under “Frequently bought together” and “Customers who bought this item also bought”. However, it’s rarely seen in a brick and mortar setting. McDonalds intends to use this technology to build a smarter, more personalized onsite ordering experience.

Per McDonald’s official press release, “McDonald’s will utilize this decision technology to provide an even more personalized customer experience by varying outdoor digital Drive Thru menu displays to show food based on time of day, weather, current restaurant traffic and trending menu items. The decision technology can also instantly suggest and display additional items to a customer’s order based on their current selections.”

Some possible extensions of the technology floated by McDonalds officials include using license plate recognition to pull up a customized menu display for customers (potentially shortening order times and boosting the per-transaction spend), using predictive analytics to make better supply chain decisions, and using the intelligence to create customized offers for customers via the mobile app. The release goes on to state McDonalds plans to integrate the Dynamic Yield technology into all of its digital customer touchpoints including their mobile app and ordering kiosks.

According to McDonalds CEO Steve Easterbrook, “We’ve never had an issue in this business with a lack of data. It’s drawing the insight and the intelligence out of it.” This, of course, is a topic we’re very familiar with at EBM Software and MGMT3D, as extracting insights from big data is what we help our customers do every day. It’s pretty astonishing to think how much data McDonalds could be extracting from its customers, serving approximately 68 million people on a daily basis.

McDonalds isn’t alone in shifting their approach toward how they’re utilizing big data. According to a New Vantage survey of C-Suite level Fortune 1000 executives, 91.6% of respondents said their companies are increasing Big Data and A.I.-related investments in 2019. 55% of those respondents said their companies were planning on making investments of over $50 million in Big Data and A.I., and 21.1% of those companies planned to spend over $500 million in 2019. Unsurprisingly, 75% of respondents cited fear of disruption as a major driving factor in their company’s decision to invest heavily in Big Data and Artificial Intelligence.

According to a recent Forbes article referencing a survey of over 300 IT executives and decision makers, BI tools to analyze this Big Data are becoming a top priority for their organizations. Per Forbes, “Companies have consistently told us their success increasingly depends on analytics and more than 90 percent said they plan to increase spending on BI tools.”

McDonald’s recent jump back into M&A has certainly made waves in the news, but their strategy of aggressively tackling big data is very much in line with the new norm for top companies.

How is your company tackling its Big Data challenges? Do you think McDonald’s new acquisition will be a game changer in the food service industry? Sound off on social media and join the conversation.