How conversational AI is becoming a QSR gamechangerHow conversational AI is becoming a QSR gamechanger

At Good Times Burgers & Frozen Custard in Denver, customers entering the drive thru are greeted by Holly. As she takes their order, Holly can figure out their age, sex — even the mood they’re in.

Holly works breakfast, lunch and dinner shifts all day. She processes orders without a break, never forgets to upsell and is the key reason why Good Times has seen check averages rise since hiring her earlier this year.

Holly is not superhuman. In fact, she’s not a human at all.

She’s a voice assistant powered by artificial intelligence, or AI. She represents the onset of disruptive digital labor restaurants are embracing for order and payment processing. Sonic Drive-in plans to test voice activated assistants this year. Chipotle Mexican Grill is using conversational AI for phone orders at 1,800 restaurants.  

But, to date, the biggest buy in of cutting-edge digital labor comes from the nation’s largest burger company. McDonald’s Corp. is expanding its drive-thru test of AI-powered digital menu boards from 700 to 8,000 restaurants by early August. The brand said the automated upselling and order processing system, in test for a few months, is improving throughput and increasing average checks.

“We know the technology works,” CEO Steve Easterbrook said during the chain’s July 26 earnings call.

Related:Chipotle Mexican Grill quietly rolls out voice AI to 1,800 units

Automating soft skills

Industrialization, where machines replace humans, is not revolutionary economics.

But, in the labor-centric restaurant industry, automation has become the next frontier as the industry seeks solutions to labor turnover, speed of service and low guest counts. The latest revolution is not about robots replacing hard skill tasks like flipping burgers.

Instead, the industry is turning to automation to replace order taking — conversational soft skills considered essential in hospitality.

“By starting to digitize this stuff, you start giving restaurants more power than they've ever had,” said Rob Carpenter, chief executive at Valyant AI, the Colorado-startup that created Holly for the quick-service industry.

Valyant began testing its AI-powered voice assistant with Lakewood, Co.-based Good Times Burgers in January.

Perfecting Holly’s speech detection software has been the trickiest part, Carpenter said. In the beginning, for example, she confused “pesto” for “peso.”

But Holly learns quickly. Her “guessing algorithm” is now nearly flawless. She can also figure out if someone is female or male and can determine if someone is “indecisive or decisive” based on tone of voice, Carpenter said.

Related:McDonald’s same-store sales hit 4-year high, but guest counts remain a ‘street fight’

Holly is programmed to digest all this information in milliseconds. It helps her quicken the pace of service, which she peppers with personalized upsells.

Six months into the Good Times trial, wait times have been reduced by seven seconds and check averages are up due to Holly’s intuitive upselling.

‘AI doesn’t get tired’

Improving speed at the drive-thru is crucial, said Sue Pittacora, former senior director of global business insights and analytics at McDonald’s.

“Every 10 second delay in the drive thru equates to a 1% loss in comp sales,” said Pittacora, citing data specific to her time at McDonald’s.

Pittacora, who sits on Valyant’s advisory board, gave Carpenter the idea to develop conversational AI at the drive-thru. He initially was developing it for kiosks.

But drive-thru lanes, she argued, can generate up to 75% of sales at a quick-service restaurant. Yet restaurants have largely ignored upgrading the bread-and-butter operation.

Customer satisfaction scores at the drive-thru are driven by speed, accuracy of order and friendliness, said Pittacora, vice president of finance and analytics at Heartland Consultants Inc. in Downers Grove, Ill.

A drive thru employee might process 75 transactions an hour during peak times. Mistakes are bound to happen as humans get fatigued from the constant multitasking.

“It’s really difficult to deliver consistent good service,” said Pittacora, who left McDonald’s in 2018.

Reliable digital labor can be a game changer for the industry, she said.

“Conversational AI idea can significantly increase the restaurant’s ability to deliver on speed, accuracy and friendliness. AI doesn’t get tired. It’s consistent,” she said.

Good Times

At Good Times, Holly worked only the breakfast shift when she started in January.

Six months later, the chain promoted her to lunch and dinner shifts. Over the next six to 18 months, Good Times plans to roll out the AI system to the rest of the chain’s 35 locations.

Scott Lefever, chief operating officer at Good Times, said the technology is not about replacing labor.

“By freeing employees to spend more time focused on the customer at the window, we’re providing better and faster service to our customers and a more enjoyable experience for our employees,” Lefever said in a statement.

Still, it does help that Holly will never call in sick.

“Good Times Restaurants are usually staffed with three employees at breakfast. If there is inclement weather, or if an employee doesn’t show up, Valyant’s platform can truly save the morning,” Lefever said.

McDonald’s expands AI to 8,000 restaurants

Good Times’ recent use of AI-powered drive-thru menu boards comes months ahead of some of the biggest burger chains in the U.S., including McDonald’s and Sonic.

In late June, McDonald’s Corp. said it was testing an Alexa-style voice ordering system at a handful of drive-through locations across the U.S.  

In May, Sonic announced plans to experiment this year with AI-powered automated voice assistants. The Oklahoma City, Okla.-based drive-in chain told NRN in July that the company “is still working to determine locations and timing.”

McDonald’s, on the other hand, is not hesitating when it comes to a different test of AI.

Over the last three-months, the chain has been testing AI-powered menu boards at 700 U.S. restaurants. They are not voice activated.

Digitized responses displayed on the menu boards upsell everything from French fries to drinks to Chicken McNuggets. McDonald’s purchased the AI-powered technology by Dynamic Yield Ltd. earlier this year.

Suggestions are made based on time of day, trending items and the weather. The system is reducing wait times and boosting check averages, prompting the chain to accelerate the rollout to 8,000 restaurants over a two-week period this summer.

Industry analyst Tim Powell said the “rapid pace” deployment of the AI-powered menu boards must signal that the technology is likely resolving age-old struggles for the chain.

“Order accuracy and drive-thru traffic jams have been a thorn on McDonald’s side,” said Powell, managing principal at Foodservice IP, formerly Q1 Consulting in Chicago.

With a giant player like McDonald’s validating AI-powered digital labor, Carpenter, of Valyant, said he expects this technology to disrupt the industry over the next five to 10 years.

But will consumers embrace it?

At Good Times in Denver, Carpenter said a customer can shout “human” or “employee” into the drive-thru speaker if they prefer to talk to a “real” person.

To date, only 1% of customers make that choice.

“That really proves that customers are accepting the system. At the end of the day, they just care about getting their food quickly and accurately.”

Contact Nancy Luna at [email protected]  

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