Why McDonald’s Just Struck Its Third Tech Deal Of The Year

Food & Drink

Your drive-through experience at McDonald’s may be about to get more pleasant.

The fast food giant said Tuesday it agreed to buy two-year-old Silicon Valley conversational voice-based startup Apprente, whose platform for “complex, multilingual, multi-accent and multi-item conversational ordering” could make your drive-through ordering at McDonald’s “faster, simpler and more accurate.”

McDonald’s said it made the deal for Apprente, founded in 2017 in Mountain View, California, after “extensive exploration with several parties,” including trying Apprente’s technology in its test restaurants.  The Chicago-based restaurant giant said Apprente’s technology may eventually also be integrated with its mobile ordering and kiosks. 

McDonald’s this year also bought startup Dynamic Yield, whose technology allows it to recommend personalized offerings to its drive-through customers by time of day, weather and items already in their orders. McDonald’s said in July it was increasing the number of U.S. drive-through restaurants using Dynamic Yield’s technology to over 8,000 from about 700. By the end of the year, almost 100% of its drive-through locations in the U.S. and Australia will feature that technology.

(McDonald’s third tech investment involves a mobile app vendor to help with its app development.) 

Read: McDonald’s first major acquisition in years could be a game changer

Why the big focus on drive-through? Even though McDonald’s in July reported its four full-years of quarterly comparable sales growth and its U.S. sales performance has outpaced that of domestic industry average, the company admitted it still has work to do to speed up its drive-through service times, key to helping to boost customer visits, which have declined in the U.S. 

According to a drive-through study by QSR magazine, McDonald’s drive-through times have increased the past five years to a “bottom-rung” result of 273.29 seconds in 2018 from 189.49 seconds in 2013. In comparison, the industry average slowed to 234.08 seconds in 2018 from 224.77 seconds in 2017, according to QSR. 

“Across our markets, we’re working to make meaningful improvements in Drive Thru service times,” McDonald’s president and chief executive Steve Easterbrook said on a July earnings call. 

In a meeting of its global leaders earlier this year, he said they “collectively” agreed that McDonald’s is “going to renew some emphasis on the drive-through service times.” “They’ve been going the wrong way with most of our markets for three or four years for reasons we can understand, as we’ve added more to our business, but we knew that wasn’t a sustaining trend,” he said. 

McDonald’s has simplified late night menu and has hosted drive-thru competitions among U.S. restaurants and given them incentives among various moves to come up with best practices to improve its drive-through performance, especially in “critical breakfast” time, Easterbrook said. 

Getting drive through right is critical for McDonald’s. While it’s only about 40% of the business of a drive-through restaurant in some European markets, in its top market in the U.S., it represents as much as three quarters of those restaurants’ business, Easterbrook said. Drive through also remains a popular way for many of its customers to order items including Big Macs, Chicken McNuggets and fries, he said in a separate call this year. 

“That’s why we’ve never been more focused on improving the experience of the” drive-through, he said. “It’s a global focus.” 

Related on Forbes: Two years after Amazon deal, Whole Foods is working to shed its ‘Whole Paycheck’ image.

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