Fast food has become a staple of the American diet.
Or, at least, this is the case according to a new report from the U.S. Centers for Disease Control and Prevention, which revealed that between 2013 and 2016, about 37 percent of American adults consumed fast food on any given day. This means that everyday in our country, about 84.8 million, or roughly one in four, adults consume fast food.
In spite of the recent health food craze witnessed over the last few years, the fast food industry remains alive and well. Some would even argue the industry is thriving, with annual fast food revenue in the U.S. nearly reaching $200 billion. And just by next year, that figure is forecast to exceed $223 billion.
In spite of different food trends, evolving consumer tastes and preferences for discovering unique dining experiences through social platforms, for example, the American fast food industry has added nearly 28,000 quick-serve restaurants over the last decade or so. And in order to succeed in this increasingly competitive environment, quick-serves need to be prepared to capitalize on emerging technologies that could boost sales and better engage customers.
AI in Enterprise Applications
Across industries, digital tools allow organizations to streamline efforts and make getting the job done easier for everyone across the enterprise. One such technology, artifical intelligence, has the potential to revolutionize the way business is done. AI promises to free employees up from mundane, repetitive and time-consuming tasks, allowing them to focus on more impactful work that requires more thoughtful consideration than a computer is capable of.
Some organizations (just 15 percent) are already employing AI through machine learning and predictive analytics, and even more enterprises (31 percent) say deploying some type of AI is on their agenda for the next year. Furthermore, a Harvard Business Review survey of 250 executives familiar with their companies’ use of cognitive technology revealed that three-quarters of them believe that AI will substantially transform their companies within three years. Clearly, business leaders are aware of the numerous advantages AI can offer—and restaurant owners are no different. In fact, some of the industry's biggest players are already dipping their toes into the AI pool.
Sonic Drive-In will be testing a bespoke AI voice assistant at select U.S. locations later this year. Additionally, McDonald's recently purchased machine learning startup Dynamic Yield for a reported $300 million, and the company's AI technology is targeting the fast food giant’s drive-thru window first. One Good Times Burgers & Frozen Custard location in Denver has already deployed a conversational AI platform from Valyant AI to take customer orders. As the evidence illustrates, fast food is unquestionably becoming a significant vertical for AI applications, but why is AI beginning to flourish in the quick-serve restaurant industry?
Why AI is Taking Off in Fast Food
When many people think of AI, they imagine burger-flipping robots or machines zooming around a restaurant to deliver food to various tables, but the majority of AI applications don’t yet allow for that level of sophistication. Still, AI has the potential to revolutionize the fast food industry. Beyond the opportunity to leverage big data insights and remove the tedious, mindless and mundane tasks from human employees, AI applications have the potential to make customers happier while improving the bottom line for business owners.
Affecting everyone in the restaurant industry, from fast food to fine dining, record-high restaurant industry growth has resulted in a record-low number of laborers across the industry. Between the explosion in restaurant openings, an increasing minimum wage, fewer teenagers entering the workforce, challenges surrounding the hiring of undocumented employees and a national unemployment rate of just 3.6 percent, a restaurant industry workforce shortage has materialized.
According to the New York Times, jobs in fast food have grown nearly twice as fast as employment overall since 2010, but there are still not enough workers to fill every available position. In fact, Dunkin' CEO Nigel Travis last year told Business Insider the labor shortage is the biggest problem facing the fast-food industry.
By employing labor-saving AI technologies like self-service kiosks and conversational customer service platforms, restaurants are able to minimize the number of employees required to staff a shift. Further, AI software that automates time-consuming processes allows employees to better support each other and helps alleviate stress. Finally, AI has the potential to ensure customer satisfaction, even in the face of being shorthanded. By freeing human employees from the time-consuming monotony of some tasks in the restaurant, AI allows employees to pay more attention to the customers in the store or at the window, enhancing each customer’s overall experience through increased attentiveness and attention to detail.
Additionally, AI is independent from time constraints and holidays off. They always show up for their shift, even in inclement weather, and they never call in sick or quit in the middle of their shift. Best of all, AI employees are programmed to help out in a quick and enjoyable manner and never get frustrated with customers.
The biggest risk restaurants have when faced with a labor shortage or a significant amount of employee turnover is the potentially negative impact it can have on the customer experience. To that end, a recent customer experience survey revealed that 35 percent of disgruntled customers will stop doing business with a company altogether in light of a lousy experience.
The 2018 QSR Drive-Thru Study revealed that drive-thru chains are inaccurate more than 10% of the time, and in the face of such high employee turnover, average speed-of-service times have significantly slowed. Human employees often struggle with order memory, they make errors when taking those orders down and extend wait times when dealing with mistakes. Conversational AI platforms, on the other hand, can help eliminate human error while improving order accuracy and decreasing wait times.
Due to the fact that AI-powered customer service assistants, ordering kiosks and chatbots only need to know certain words to take meal orders, the quality of accuracy of these AI applications exceeds that of other popular voice assistants that have to listen to and know everything someone trying to say. In the drive-thru, seconds count, and with AI applications increasing order speed and accuracy, the customer service experience is improved and restaurants can serve more customers more quickly.
Unlike their human counterparts, AI employees know every menu item, can instantly access to inventory and online reviews and some even have the ability to show customers how-to videos, photos, ingredients or nutritional information. Even better, AI platforms are constantly collecting data insights that provide actionable recommendations. AI algorithms analyze customer activity to better understand customers, the weather, local events and foot traffic to recommend specific items or offer discounts that actually matter. This level of sophistication allows AI applications to improve employee efficiency while simultaneously enhancing the customer experience with upgraded engagement.
What AI Means for Future of Fast Food
Beyond increasing automation and reducing labor costs, automating repetitive tasks to address labor shortages and improving the customer experience, advances in AI have the potential to transform the entire fast food industry. Despite the widely held belief that AI and machine learning tools are intimidating and difficult to learn, fast food owners are learning that operating enterprise AI applications is easier than ever—and they’re excited for the future.
For employees in fast food, it remains to be seen what the application of AI in the industry holds down the road, but one thing is for certain: AI technology is here to stay. Whether reducing operational costs or enhancing efficiency, increasing revenue and improving customer service, the right AI solution will ensure fast food remains an American staple, even in the face of an increasingly digital future.
Rob Carpenter is the founder and CEO of Valyant AI, the company who recently deployed America's first digital employee.