McDonald’s Corp. wants to supersize its drive-thru sales and thinks personalized offerings can help.
The massive fast-food retailer announced Monday it is buying Dynamic Yield Ltd., a personalization vendor based in New York and Tel Aviv. The purchase price was not disclosed. However, according to Wired, people familiar with the deal say the price tag is more than $300 million.
Similar to the way an e-retailer presents personalized product recommendations based on a shopper’s location, trending items, what she has in her cart and the products she has previously viewed or purchased, McDonald’s will use Dynamic Yield to provide a personalized customer experience by varying outdoor digital drive-thru menu displays. The restaurant chain says it plans to use the technology to show food on drive-thru displays based on the time of day, weather, current restaurant traffic and trending menu items. The technology also can instantly suggest and display additional items to a customer’s order based on their current selections, McDonald’s says.
“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,” says Steve Easterbrook, president and CEO at McDonald’s.
Retailers use Dynamic Yield to create machine learning-based personalized experiences that are synchronized across all digital channels, including web, mobile web, apps and email. The vendor, which launched in 2011, has raised $83.3 million, according to Crunchbase.com.
Dynamic Yield works with many online retailers, including cosmetics retailer Sephora—which is owned by LVMH, No. 131 in the Internet Retailer Top 1000—Urban Outfitters Inc. (No. 39) and Ikea (No. 75).
For example, cosmetics retailer Kopari began using Dynamic Yield in January 2017, to help it determine the best homepage and product page designs and to personalize those pages based on how the shopper came to the website, where she is in the purchasing funnel and what device the shopper is on. Kopari also uses Dynamic Yield to personalize the site based on the ads with which a shopper interacts. For example, one Kopari social media ad highlights the ingredients in a product, whereas a different ad focuses on the results a shopper receives from using a certain cosmetic product. Depending on which ad the shopper clicks on, Kopari will change the product’s description on the product detail page to be more relevant to the ad.
These personalized tweaks paid off: Kopari’s revenue per visitor increased 60% in the 15 months after implementing Dynamic Yield. Revenue per visitor is a measure of sales on the site divided by unique visitors.
Dynamic Yield also works with non-retailers, such as travel and hospitality company Iberostar Hotels and Resorts and automobile listing and classified site AutoNation.com. The vendor says it has more than 300 global clients.
McDonald’s tested Dynamic Yield’s technology in several U.S. restaurants in 2018, but a spokeswoman for the restaurant would not say the number of locations it was tested at or the results. McDonald’s says it will begin to roll the technology out in drive thrus at restaurants in the United States in 2019 and then expand the personalization features to other top international markets. McDonald’s also will integrate the technology into all of its digital touchpoints, such as self-order kiosks and its app.
McDonald’s will become sole owner and will continue to invest in Dynamic Yield’s personalization product and teams, the restaurant says. Dynamic Yield will remain a stand-alone company and employees will continue to operate out of offices around the world. Dynamic Yield will continue to serve its current clients, as well as attract future ones.
The purchase of Dynamic Yield follows other recent technology advancements by McDonald’s, including its global mobile app, mobile order and pay, indoor and outdoor digital menu boards and self-order kiosks in restaurants.
92.4% of marketers believe in the value of personalization, according to a February 2018 global survey of 700 marketers and other executives conducted by Dynamic Yield. However, few retailers—or other businesses—have personalization figured out: 35.4% of companies deploy only basic on-site personalization with limited segmentation, the survey found. And only 23.6% are using personalization technology at what they consider the “highest-possible level.”
April Berthene contributed to this articleFavorite