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McDonald's spends millions on tech to juice up drive-thrus

Brian Sozzi

McDonald’s tech makeover just got a bit more supersized.

The Golden Arches revealed Monday its biggest acquisition in more than 20 years, acquiring privately held tech platform Dynamic Yield. McDonald’s didn’t disclose a purchase price but a source close to the matter said McDonald’s plunked down in excess of $300 million for Dynamic Yield.

Dynamic Yield will allow McDonald’s to personalize its popular drive-thrus in a bid to sell additional items and by extension, make more money per visitor. Think of it this way: You pull up to a McDonald’s drive-thru and the digital menu board will offer suggested items (using Dynamic Yield’s technology) based on time of day, weather, current restaurant traffic and trending menu items.

With the restaurant industry trying to unearth every penny it could to pay for digital investments and higher hourly wages, McDonald’s buying a tech platform such as Dynamic Yield makes sense. And for an alleged $300 million, it seems like a steal ahead of an Uber IPO where Uber Eats could fetch an outsized valuation.

The company plans to roll out the technology to its U.S. drive-thrus first and then take it internationally.

McDonald's cuts a big check to buy tech platform Dynamic Yield. The tech provider will allow McDonald's to offer personalized items on its digital drive-thru menu boards.
McDonald's cuts a big check to buy tech platform Dynamic Yield. The tech provider will allow McDonald's to offer personalized items on its digital drive-thru menu boards.

McDonald’s CEO Steve Easterbrook sold the acquisition as a means to be similar to the web experiences offered by Amazon, Best Buy or Walmart.

“When we reflect on the last four years, our owner/operators, our developmental licensees, and the corporation, we've all invested into the necessary technology to make the overall customer experience more relevant, easier, more enjoyable, with the ultimate aim for a much more personalized experience,” Easterbrook said in an internal video to employees and franchisees obtained by Yahoo Finance.

“When we get onto websites like Amazon, or Best Buy, or Walmart.com, as you place your cursor over an item and click, and it enters your shopping basket, it automatically suggests other items that are associated with that. This technology can work with the intelligent menu boards we have,” Easterbrook added.

He also thinks the technology will help ease congestion of the drive-thru at peak times, which is always a problem for McDonald’s.

The acquisition marks only the latest tech initiative put forth by Easterbrook. McDonald’s now has self-order kiosks in 17,000 of its 36,000-plus restaurants globally. It has digital menu boards in 22,000 restaurants. The company’s revised mobile app has mobile order and pay capabilities (a la Starbucks).

Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi

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