By Daniela Sirtori-Cortina
Wendy’s Co. will begin testing an AI-powered chatbot next month that will talk to customers and take orders from the drive-thru, becoming the latest fast-food chain to use the technology.
The system, powered by Google Cloud’s artificial intelligence software, will be as natural as speaking to an employee and has the ability to understand speech and answer frequently asked questions, the company said.
Wendy’s is one of several restaurants incorporating artificial intelligence and automation to improve customer service while dealing with labor shortages. Additionally, drive-thrus have grown in popularity during the pandemic, with the chain saying 80% of its customers prefer to order that way.
This “creates a tremendous opportunity for us to deliver a truly differentiated, faster and more frictionless experience for our customers,” CEO Todd Penegor said in a statement.
Wendy’s shares were up less than 1% at 11:24 a.m. in New York, taking the company’s advance to 1.7% this year. The S&P 500 Restaurant Index rose 13.5% in the same period.
Interest in AI chatbots from investors and the public increased after the launch of OpenAI’s ChatGPT last year. That set off a race among tech giants, including Google parent Alphabet, to push new chatbot technology into the business world.
Opinions on what AI will mean for workers and businesses vary widely, from massive disruption to marginal change. In the opinion of Presto Automation, which offers an AI ordering platform for restaurants, the technology will shake up the industry.
“I don’t think there will be a drive-thru in three years where a human being takes your orders,” Krishna Gupta, president and interim CEO of Presto, told Bloomberg Television last week.
Wendy’s, which is debuting its chatbot at a company-owned store near Columbus, Ohio, is trying to reduce miscommunication and errors by automating the process, he said. The company declined to comment on how the technology might reduce the need for employees, though it said the system should help streamline the ordering process so staff can focus on serving food quickly.
Using AI to take orders could be profitable for Wendy’s because it lags behind its peers in wait times and accuracy, according to data provider Intouch Insight. The company is also looking to accelerate growth this year as it embarks on a restructuring plan to cut costs. The chain reports first-quarter earnings on Wednesday. Recent results from competitors like McDonald’s and Chipotle have exceeded Wall Street expectations, suggesting that consumers continue to dine out.
At the test site, a restaurant employee will monitor the drive-thru to make sure the AI can handle all requests and be there if a customer requests to speak to a human, according to Kevin Vasconi, Wendy’s chief information officer. .
The chatbot will have a female voice and will be able to understand requested items that are not worded exactly as they appear on the menu. You’ll know that a “big milkshake” corresponds to the chain’s “Big Frosty,” Vasconi said.
After the AI confirms the order on a screen customers can see, a ticket will arrive in the kitchen, just like when an employee talks to diners.
Wendy’s doesn’t expect the chatbot to be perfect. Their order accuracy in 2022 was 79%, according to Intouch Insight. The chain’s initial goal for the AI is to increase that 85%, which would put it on par with the competition.
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