Wendy's move to deploy Google Cloud's generative AI technology for drive-thru ordering starting in June is worth watching as large language modeling (and the fine tuning for industry use cases) go mainstream.
Speaking on Wendy's first quarter earnings conference call, Wendy's CEO Todd Penegor said Wendy's Fresh AI pilot is part of a larger digitalization push.
"We have partnered with Google to pilot Wendy's Fresh AI, a voice AI solution for drive-through ordering that utilizes Google Cloud's generative AI and large language models technology. We believe this solution creates a huge opportunity for us to deliver a truly differentiated, faster and frictionless experience for our customers and allows our crew members to continue focusing on making great food and providing exceptional service.
We plan to launch this pilot in June and are incredibly excited about the potential unlocks to speed of service, customer satisfaction and profitability that this technology could drive over time."
Wendy's has been a Google Cloud partner and news of the Wendy's Fresh AI pilot was announced a day before Google I/O 2023.
According to Wendy's, 75% to 80% of customers choose drive-thru as the preferred ordering channel. Wendy's is hoping that automation can make ordering more seamless. The catch is that the fast-food restaurant chain has to customize Google Cloud's models for menu options, terms unique to Wendy's and special requests.
The Wendy's FreshAI pilot launches in a Columbus, OH area restaurant and then will expand from there. Wendy's will use Google's Vertex AI and other models that were outlined yesterday.
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This project is worth watching for a bevy of reasons. Here are a few takeaways and open questions to ponder:
Will this AI drive thru concept work this time? Constellation Research Analyst Liz Miller noted that the Wendy's pilot sounded a bit familar. That's because the AI in the drive thru experiment was tried a year ago. Here's Miller's history lesson:
In 2022, McDonalds launched an AI assistant in 24 locations after an initial 10 store rollout in 2021. By summer 2022, the company had only reached 80% drive thru voice ordering accuracy. The roll out stopped because McDonalds wanted 95% accuracy. McDonalds' AI assistant also was torched on TikTok.
Panera, Sonic, White Castle, Checkers and Rally's also tried the AI drive thru technology. In 2022, the storyline was AI was being used to address talent gaps and labor shortages. Vendors include Open City, which has a Tori bot used at Popeyes, Presto, which counts Applebees and KFC as customers, and Valyant.
Wendy's and Google Cloud's models will have to hit their accuracy rates to expand from the pilot phase.
What's the integration process with enterprise data? Wendy's is integrating Google foundational LLMs with data on the menu, business rules and logic, conversational guardrails and integration with restaurant systems including point of sale.
How are returns measured? Penegor said on Wendy's earnings call that efficiency and throughput will be primary metrics. Customer and employee satisfaction will also be core metrics. If FreshAI can speed up ordering, Wendy's can drive more sales velocity. Employees can focus less on the order station and more on food prep and expediting it.
What do companies need to do ahead of time to get to the generative AI phase? Hint: Get your data act together. Yes folks, master data management matters. Penegor said:
"I think now is the right time. We've done a lot of work on our tech stack and our restaurants. And we've had Kevin Vasconi, who joined us several years ago now from Domino's, and his team have done a nice job really setting ourselves up to lean in even more on technology. Clearly, it starts with the global next-gen design. That's all digital forward. We've got work that we can continue to do even on the digital menu board. So that's still growth in front of us."
Now Wendy's has been a Google Cloud partner since 2021, but its digital transformation efforts started with kiosks, mobile ordering and agile software development back in 2017. Through the first quarter, 12% of Wendy's sales were digital.
Wither the human drive-thru order taker? Should Wendy's FreshAI effort succeed, rest assured other restaurants will follow. Companies like Starbucks and McDonald's also have significant digital efforts as well as loyalty programs. Both companies have drive-thru operations as do a bevy of others in the category including Taco Bell, Chik-Fil-A and others. Also see: Starbucks’ new CEO: ‘We can enhance our tech stack to lower costs and reinvest’
