McDonald’s push into AI and voice recognition falls flat among customers as third-quarter earnings dip by 2%
- McDonald’s third-quarter earnings dipped by 2% and net income fell to $1.6B
- Firm hoped addition of new technologies would be enough to lure in customers
- Spent hundreds of millions of dollars on AI and voice reconciliation acquisitions
McDonald’s has failed to lure customers in with new technology, bringing the firm’s third-quarter earnings down by two percent and dropping net income to $1.6 billion.
Although the firm’s net income experienced dipped, it was able to show a 5.9 percent increase in global comparable sales, including a decent rise in the US.
However, Investors have put pressure on profits following the fast-food giant’s increased spending on a variety of technologies including artificial intelligence and voice recognition.
McDonald’s has failed to lure customers in with new technology, bringing the firm’s third-quarter earnings down by 2% and dropping net income to $1.6 billion. Although the firm’s net income dipped, it was able to show a 5.9% increase in global comparable sales, including a decent rise in the US
Quarterly earnings for McDonalds were flat at $2.11 per share, while Wall Street was looking for at least $2.21 of earnings per-share, according to analysts polled by FactSet.
The Chicago company said its third-quarter revenue was $5.4 billion, again missing Wall Street’s mark, which was forecasted to be $5.49 billion.
And by mid-afternoon on Tuesday, McDonald’s shares fell four percent to $201.46.
Last month, the fast food chain acquired conversational technology startup Apprente with a plan to integrate its systems with services such as drive-thru menus, self-order kiosks, and the mobile app.
McDonald’s President and CEO Steve Easterbrook said the latest acquisition will make it ‘simpler and even more enjoyable for crew members to serve guests.’
Investors have put pressure on profits following the fast-food giant’s increased spending on a variety of technologies including artificial intelligence and voice recognition
It came just months after the fast food giant began rolling out AI-powered menus at hundreds of its locations across the United States, using the technology to make more precise menu suggestions.
Back in March the company acquired Israeli digital startup Dynamic Yield with similar plans to improve the customer experience using AI.
Its AI menus can suggest items based on the time of day, weather or recent trends, like showing a hashbrown alongside a cheeseburger – a combination that recently went viral on Reddit.
The menus will also be able to suggest add-on items, such as a Minute Maid orange juice to go along with your McMuffin.
‘We’re leveraging technology to improve and modernize the way we connect with customers,’ CEO Steve Easterbrook told investors during an earnings call in May, according to Nation’s Restaurant News. ‘We’re confident about the road ahead.’
In the future, McDonald’s hopes to add the AI software to its apps and kiosks, Easterbrook added.
The AI-powered menus are also expected to launch in international markets at some point.