Artificial Intelligence in Fast Food Restaurants: Starbucks and Dunkin Donuts

The fast food industry in the United States has seen high growth. Currently, the US fast food industry is worth approximately $198.9 Bn, and expected to grow beyond $223 Bn by 2020, driven primarily by consumers who go to fast food restaurants atleast once a week.


The fast food market comprises of on-premises restaurants, drive-thrus, off-premises dining and cafeterias and buffets. The fast food market in the US has produced a number of household brand names, both domestically and globally.

Artificial Intelligence is pervasive, and all encompassing, with use cases ranging across domains, and impacting human lives daily. Its no wonder then that AI use cases are increasing at fast food restaurants. The fast food industry generates a huge amount of consumer data. The all pervasive AI keeps getting better by gathering, crunching and analyzing large data sets, identifying and interpreting clear patterns in the data, resulting in reduced time and resources required for sustainable decisions, and reducing wastage of resources.


Fast food restaurants have been at the forefront of embracing technology, investing in automation and data analytics. Not far behind, restaurants have been turning to Artificial Intelligence and Machine Learning to leverage data. When it comes to AI at fast food restaurants, it goes beyond just automated ordering kiosks, and touching all aspects of industry, ranging from ordering, preparing, serving food to staffing.


This article examines how two of the largest fast food chains, Starbucks and Dunkin Donuts leverages Artificial Intelligence.


Starbucks


With >90 Mn transactions weekly across 25,000 restaurants globally, Starbucks has been at the forefront in leveraging technology, especially Artificial Intelligence in making informed business decisions across marketing and sales.




At Starbucks, the Starbucks point of sale system is able to identify customers and their preferences through their smartphone, helping the Barista to learn about the customer choices. Based on past ordering history, the Starbucks app is able to suggest new treats to customers.


The Starbuck’s Digital Flywheel Program, a cloud-based artificial intelligence engine, implements AI technology in its popular Starbucks Rewards members' accounts. The Digital Flywheel program considers factors like order history, current weather conditions, the day, time of day, and even whether its the customer's birthday in order to make drink and food suggestions.


When it comes to opening new Starbucks stores, Starbucks leverages data intelligence from the mapping and business tool, Atlas, that leverages vast data sets, and evaluates key data points, including proximity of proposed Starbucks store to other Starbucks locations, the type of demographics, the nature of traffic patterns among other parameters, before giving a go-ahead for new store location. In addition, Atlas also helps Starbucks in predicting the impact of proposed Starbucks stores on other existing Starbucks stores in the proximity.


Dunkin Donuts


Dunkin’ Donuts has >11,300 restaurants worldwide, including >8500 restaurants in US, serving >3Mn customers daily. The challenge for Dunkin’ Donuts is getting people to come in either more frequently or at times they might be going elsewhere.


The Dunkin’ Donuts app allows mobile ordering and incorporates various promotions, based on the retailer’s data as well as monitoring whether offers are used, the revenue generated by each offer, and if customers return if they don’t receive any offers.


In 2014, Dunkin Donuts created DD Perks, their loyalty program, which has seen regular app updates, resulting in a fully digital menu today.


The Dunkin Donuts app provides a wealth of information about customers. Dunkin Donuts leverages machine learning to analyze and leverage massive datasets to understand customers, and enable precise sales targeting to bring in customers, as well as optimal resource allocation, staff retention and so forth to deliver exceptional customer experience.

By using machine learning and AI, Dunkin Donuts is looking at people’s spend behavior to give them offers and communications that will resonate with them.


Among other things, Dunkin Donuts is expanding the ways by which its fans can find and order coffee through its On-the-Go Mobile Ordering available through the Google Assistant on iPhones and Android phones. Though this new integration, DD Perks Rewards members can use voice assistant to place a mobile order and then speed past the line at Dunkin Donuts for pick-up. The program is powered by artificial intelligence platform provider Conversable.


As per Dunkin Donuts, once people tried their on-the-go mobile ordering, they saw an 80% retrial rate.


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