AI technology in McDonald's and KFC
The fast-food industry is one of the most beloving and worthy industries. According to experts, they foresee steady growth in fast-food marketing from this year to 2026. The critical value in the fast-food industry is the "speed of service". With the ever-changing environment in society, the definition of "fast" in customers' minds is getting straighter. The fast-food giants invest in advanced technologies to maintain efficiency in food production and cater to customers' preferences.
Challenges in the fast industry
1. Healthier lifestyle
As the name "junk food" suggests, fast food is indeed unhealthy. In recent years, there has been a noticeable change in people lifestyles- people have an increasing awareness of fitness and a healthy lifestyle. Some people are preventing fast food and switching to healthier food options, which is a challenge in the fast-food industry. The industry may suffer from a loss of customers' interests and, even worse, a loss of customers.
2. Keen competition
The fast-food industry is one of the most competitive industries globally, competing with thousands of fast-food chains. The players strengthen their position in the industry with strategy and the implementation of technologies because, undoubtedly, brands are benefited from technologies. This phenomenon intensifies the level of rivalry in this competition. Since the giants have more resources in investing and inventing tech solutions, they are likely to locate in the top tier of the fast-food industry.
The fast-food stores are suffering from understaffed stores and supply chain problems during the pandemic. Under the pandemic, many restaurant owners declare their concerns about insufficient staff to maintain the business, causing closings of seating areas or even restaurants. The fast-food industry faces a hiring crisis. At the same time, the prices of ingredients have increased, which may lead to shrinking profit margins.
How is AI used in McDonald's?
1. Automating drive-thru lanes
McDonald's tested automated drive-thru lanes with voice-ordering technology. As reported by McDonald's, the voice-ordering technology achieves 85% order accuracy. The brand aims to save on labour and improve customer experience regarding the labour crisis's challenges and loss of customer's interests. By far, the company focuses on replacing staff in taking order. However, it is also possible to automate kitchen routines in the future. The ultimate goal in investing in automated driving-thru lanes is to enhance efficiency, user experience and reduce labour—the above help save operational costs in McDonald's.
2. Personalisation and recommendation
McDonald's uses programs to market food more strategically. The company creates a recommendation system based on customer preference by collecting customer information such as previous order records and environmental factors such as the time of day and the weather. At some of the drive-thrus, McDonald's implemented and tested technology that can recognise license plate numbers. This information allows the company to record customers' previous orders based on the license plate numbers, which enables the execution of the food recommendation algorithm according to the customer's information. Not only McDonald's but businesses in the retail and catering sectors use new technology to collect data and deploy it to encourage spending, which is beneficial. Moreover, by showing personalised options to customers, it improves user experience and customer's loyalty.
How is AI used in KFC?
1. Guest centric menus
KFC implemented guest-centric menus for a goal- to build a holistic, predictive view for each item on the menu according to data sources from across the business. As reported, the majority of UK CEOs and C-suite executives have experienced "decision paralysis". They admit that decision making is more complicated than before. The decision-makers may take too long and causes delays in making big business decisions.
The KFC understand the concerns in optimising the process of decision making, and they believe in AI's efficiency in assisting decision-making. So, AI is utilised to make decisions smarter and faster based on existing data in this system. By improving analytics and decision making, KFC aims to help each of their restaurants to continue delivering the best services to our customers, satisfying customers' demands and encouraging more spending.
2. Planning digital strategy
KFC uses AI to analyse their online performance regarding the growing online sales and the importance of transactional speed. The company concerns about its ability to drive value and adapt to changes in micro-demand quickly. KFC utilise AI to centralise data across all functions and perform analytics and algorithmic decisioning. As a result, KFC gets insights across its business, including dynamic demand, inventory, operations, e-commerce, guest experience and productivity. The generated information is critical in planning strategy for the business's future development. Therefore, KFC can know and respond to the fresh opportunities in the market easier and quicker than its competitors.
Fast Food Industry Is at a Breaking Point With the Labor Shortage and Supply Chain Problems (businessinsider.com)
Major Fast Food Industry Challenges (Updated) (quantzig.com)
McDonald's tests automated drive-thru ordering at 10 Chicago restaurants (cnbc.com)
Would You Like Fries With That? McDonald's Already Knows the Answer - The New York Times (nytimes.com)
KFC UK & Ireland taps Peak AI tech for guest centric menus — Retail Technology Innovation Hub (retailtechinnovationhub.com)
KFC Canada ups its digital strategy with new AI, analytics backbone | QSR Web
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