McDonald's just made its largest acquisition in decades with an aim on improving its technological prowess.
McDonald's Corp. will acquire technology startup Dynamic Yield Ltd., a leader in the personalization and decision logic technology sector. The company, which is based in New York, NY, and Tel Aviv, Israel, is expected to help McDonald's build on its technology suite, which it has already heavily invested in to support its restaurants, as we discussed last week in The Food Institute Blog.
McDonald's says it will use the technology to further personalize the customer experience, which lines up with what Corporate EVP & CFO Kevin Ozan said during a question and answer session with JP Morgan. The company plans to vary the offerings displayed on outdoor digital drive thru menus based on the time of day, weather, current restaurant traffic and trending menu items. Additionally, the decision technology will be able to provide suggestions for additional items a customer can add to an order based on current selections.
When looked at in the light of the changes the company has made with its Experience of the Future initiative, the Dynamic Yield acquisition makes a lot of sense. It joins the McDonald's Global Mobile App, Mobile Order and Pay, indoor and outdoor digital menu boards and self-order kiosks, all initiatives the company invested in to improve the physical infrastructure at its restaurants by promoting remodeling efforts and improving digital signage, both inside and outside the store. This technology will allow the company to leverage these investments while providing a more personalized experience for guests.
The company will be among the first to deploy decision technology at the customer point of sale at a brick and mortar location. McDonald's plans to deploy the technology at U.S. locations in 2019 following the closure of the deal, with top international markets following. The company previously tested the technology at several U.S. restaurants in 2018.
"Technology is a critical element of our Velocity Growth Plan, enhancing the experience for our customers by providing greater convenience on their terms," McDonald's President and CEO Steve Easterbrook. "With this acquisition, we're expanding both our ability to increase the role technology and data will play in our future and the speed with which we'll be able to implement our vision of creating more personalized experiences for our customers."
Liad Agmon, co-founder and CEO of Dynamic Yield, added: "We started Dynamic Yield seven years ago with the premise that customer-centric brands must make personalization a core activity. We're thrilled to be joining an iconic global brand such as McDonald's and are excited to innovate in ways that have a real impact on people's daily lives."
While the companies did not confirm a price tag, a report from The Wall Street Journal indicates the deal is valued at $300 million, according to sources familiar with the matter. When the deal is finalized, McDonald's will become the sole owner of Dynamic Yield. According the press release, Dynamic Yield will continue to receive investments from McDonald's, and it will be free to serve current and future clients.
[Editor's note: OFW Law Principal Attorney Michael J. O'Flaherty provided this blog piece regarding the need for federal oversight regarding the ongoing trend of class action lawsuits filed against food companies regarding product labeling.]read more
Chris focuses on fresh, canned and frozen fruit and fresh and dried vegetables for the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He is a proud Rutgers University alumnus with a degree in English, and has a background in web writing for a variety of industries, including legal, foodservice and small-to-medium sized businesses. In his downtime you can find him watching New York Yankees baseball, hiking, enjoying live music and spending time with his dog Kaiden. He invites you to contact him via email at firstname.lastname@example.org to talk about anything food-related.
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