McD’s Hits The Buy Button On Tech

McDonald’s has hit the fast-forward button on a digital future with announcements of two major tech deals: the acquisition of Dynamic Yield Ltd., a personalization and decision logic technology firm based in New York and Tel Aviv, and a 10% stake in Plexure, a New Zealand mobile app developer.

The burger giant spent $300 million on Dynamic Yield’s technology, which will sharpen the personalization angle in McDonald’s drive-thru menu displays, enabling them to show food based on time of day, weather, trending menu items, and current restaurant traffic. The technology can also suggest and display additional items to a customer's order based on their current selections.  Drive-thrus make up more than two-thirds of McDonald’s sales.

McDonald’s, which tested the technology in several domestic outlets last year, will be one of the first companies to integrate decision technology into the customer point of sale at a brick-and-mortar location. Once the deal closes, the chain will spend 2019 rolling out the technology in U.S. drive-thrus before expanding it to its largest international markets. The Chicago-based brand will also begin integrating the technology into all of its digital customer experience touchpoints, including self-order kiosks and its global mobile app.   

McDonald’s $3.7 million check for its stake in Plexure gives the chain enhanced and proprietary access to the technology in the QSR space, including front- and back-end features, customer functionality, and targeting

And then there is the competitive advantage to the investment. As part of the agreement, the chain will get new service levels and pricing and Plexure will not provide services to competitors in the QSR space.