McDonald's buys a startup whose AI tech aims to make you spend more

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The fast food giant announced Monday the acquisition of Dynamic Yield, an Israeli company that uses artificial intelligence to offer consumers a personalized experience.

McDonald's stated that it would use start-up technology to personalize the items displayed on the menu boards of the outlets at the end of the streets, depending on the weather, the attendance of the restaurant and of the hour. It will also instantly recommend additional items based on the customer's initial order. This approach could help McDonalds (MCD) increase sales of breakfast or McCafe items, for example.
The strategy behind McDonald's latest creation

Food companies are increasingly turning to digital technology, especially mobile apps, to learn about their customers' preferences and sell them more of what they like.

Dynamic performance will increase "McDonald's ability to increase the role that technology and data will play in our future," said Steve Easterbrook, McDonald's CEO, in a statement. It will also increase "the speed with which we can implement our vision of creating more personalized experiences for our customers," he added.

McDonald's did not disclose the scale of the transaction nor responded to a request for additional information. The Wall Street Journal reported that the acquisition was worth more than $ 300 million.

McDonald's started testing Dynamic Yield technology in American restaurants last year. She plans to incorporate the platform into her driving-point tables at retail outlets in the United States this year before expanding to major international markets. The company also plans to begin integrating technology into its self-order kiosks and mobile applications.

McDonald's plans to use Dynamic Yield's artificial intelligence technology to customize its digital menus.

Dynamic Yield, headquartered in Tel Aviv and New York, will remain an independent business under the ownership of McDonald's.

This agreement marks the final stage of McDonald's aggressive growth strategy, announced two years ago.

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Technology is a key part of the plan to retain existing customers, create new ones and convince customers to buy more. Last year, McDonald's attempted to persuade consumers to download its app with promotions such as free chips at $ 1 purchase per app.
Other fast food companies also use technology to try to attract customers. Burger King launched an application-only promotion that allowed customers to buy a Whopper penny within 600 feet of a McDonald's.
More recently, Chipotle (GMA) Venmo has offered free money to customers who have registered for the rewards program

Rob McLean contributed to this report.

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