McDonald’s, in its largest acquisition in 20 years, is buying a decision-logic technology company to better personalize menus in its digital push.
With the new technology, McDonald’s restaurants can vary their electronic menu boards’ display of items, depending on factors such as the weather – more coffee on cold days and McFlurries on hot days, for example – and the time of day or regional preferences.
Since taking the helm in 2015, Chief Executive Officer Steve Easterbrook has pushed technology – including self-order kiosks, digital menus boards, and delivery – to boost sales and help McDonald’s stand out among rivals.
Since McDonald’s seldom carries out acquisitions, the purchase of Dynamic Yield shows the company’s desire to leverage technology to speed growth in the fiercely competitive restaurant industry.
He said McDonald’s is expanding the role that technology will play in the company’s future “And the speed with which we’ll be able to implement our vision of creating more personalized experiences for our customers.” Baird analyst David Tarantino said he sees “Strategic value” in the deal, especially as McDonald’s tries to accelerate its growth and “Elevate the customer experience.” He said the deal could be “Slightly dilutive in the early stages.” McDonald’s tested Dynamic Yield’s technology in the U.S. in 2018, and will more widely introduce it this year for drive-through menus once the deal closes.
With the agreement, McDonald’s becomes the sole owner of Dynamic Yield, which is based in New York and Tel Aviv.