Unlike McDonald’s, most quick service restaurants (QSRs) may not have $300 million to place a big bet on AI-driven personalization. But, regardless of size, all QSRs should be thinking about their data strategy and setting up their business to take advantage of the power of AI and Machine Learning to better serve their customers and compete in the digital era.
While still in its infancy, make no doubt about it: personalization, enabled by AI and Machine Learning, will soon start to take hold in the QSR industry just as it has in retail and other consumer-facing industries. Just by the sheer nature of its business, QSRs have access to a treasure trove of data about its customers and their preferences. With the right strategy, QSRs can harness this data and use it to engage consumers with customized experiences, as well as use it to optimize their operations. Here are some critical considerations for getting started.
Understand Your Customer and Follow Their Lead
Historically, most QSRs have focused on menu simplification, standardization and service efficiency to scale their business. But understanding the customer has not been a priority. In the new era where everything and everyone is connected, increasingly consumers expect personalized offerings, even with their fast food purchase.
Personalization, enabled by AI and Machine Learning, will soon start to take hold in the QSR industry just as it has in retail and other consumer-facing industries.
To deliver such experiences, it’s important to not just know who your best customers are, but to truly understand them. What are their likes and dislikes, and when and how do they engage with your brand? What are their patterns? Do they usually stop by at breakfast or in the middle of the afternoon? Do they prefer dine-in or drive-through? Understanding the moments that matter to your customer will enable you to offer them the most relevant choices or services. Mapping the customer journey will allow you to identify opportunities for personalizing interaction points between the customer and your brand.
Invest in Systems that Enable Personalization
Most QSRs have been so busy making incremental improvements in store technology or implementing ecommerce order-taking infrastructure that they have neglected to invest in systems that make one-to-one personalization possible. Data analytics, CRM and marketing automation tools are critical for enabling personalization. When mined correctly, data from web and mobile channels as well as CRM provide the insights that drive the right messages at the right time and right place to influence customer thinking and behavior.
These are the systems that will enable you to automatically send your regular breakfast customer a message that encourages them to try a smoothie or snack at 11 a.m. on days they miss breakfast. If you don’t already have them in place, invest in them now.
Modernize and Automate Restaurant Operations and Use Insights to Drive Continuous Improvement
Many QSRs still rely on legacy systems and processes from 20 years ago. AI-driven automation can significantly improve the ordering and drive-through experience.
For example, AI-based voice user interfaces are able to discern accents and speak multiple languages to serve up a better customer experience. (When was the last time you could say that about the person who took your drive-through order?) Automation can also be used to redirect employees to the make line, enabling them to increase volumes. In addition, insights from personalized customer interaction can be used to improve ingredient ordering processes and menu item decisions.
Make Innovation a Priority
Successful disruptors share a common strategy: they use technology to apply the timeless principle of recognizing and serving customers at a very personal level. We see this in the food service industry as well – Grubhub, Uber Eats and DoorDash are at the forefront of food delivery, where they personalize restaurant (food) recommendations based on a customer’s history. Businesses such as Rebel Foods in India have built mobile storefronts to launch brands that appeal to micro-segments (think delivery of a mid-day snack or afternoon tea.)
With their broad physical presence and brand recognition, QSRs have the potential to continually innovate and be at the forefront of the personalization movement.
With their broad physical presence and brand recognition, QSRs have the potential to continually innovate and be at the forefront of the personalization movement. Prioritize proofs of concepts for AI-driven personalization in ordering, customer service, and in-store engagement. Create an incentive structure that supports risk-taking. Invest in a flexible and scalable technology infrastructure that will provide the backbone to launch new capabilities quickly. Consider public cloud, open architectures and development platforms that will enable lean product development. Adopting a culture of continuous innovation will allow QSRs to truly realize the value of AI and personalization.
AI-driven personalization will soon become mainstream in the food service industry. The new QSR leaders will be those that apply this powerful technology to turn insight into action and continuously introduce new ideas and innovation to market.