Do you want AI with that? Fast food chains go digital with dynamic pricing, bots - CTV News

Fast food restaurants are diving deeper into the digital realm, adopting strategies that range from dynamic pricing to drive-thru voice bots and weather-based menu boards.

Experts say the cutting-edge sales tactics have the potential to streamline service, lure new customers and fill in labour gaps amid high staff turnover, but they also warn the public may be put off by poor communication and privacy concerns.

News of a plan at Wendy's to implement "dynamic pricing" drew backlash after CEO Kirk Tanner told financial analysts on a Feb. 15 conference call that the 7,000-outlet burger chain would introduce it as early as next year

Wendy's clarified in an email Wednesday that the fluctuating price tags will mean lower prices during slower times of day, rather than surge pricing during peaks.

The initial confusion over whether the 55-year-old establishment would embrace up-and-down pricing tactics similar to tech-savvy ticket sellers and ride-hailing companies marked the latest shift for a quick-service sector that's increasingly shaped by digital technology and artificial intelligence.

Chains including Canadian-owned Popeyes, as well as Taco Bell, Panera Bread and Chipotle, have tested AI-driven virtual assistants at drive-thrus.

Next year, Wendy's plans to try out menu boards at all U.S. locations that can offer AI-prompted changes and "suggestive selling" based on the weather — “a cool Frosty on a warm summer day,” said spokeswoman Marcy McMillan. McDonald’s has done likewise for about eight years, and in 2019 acquired Israeli AI firm Dynamic Yield in a reported US$300-million deal before selling it two years later.

As far back as 2017, KFC offered customers in Beijing recommendations based on their apparent gender, age and mood via facial recognition technology embedded in a menu screen.

“In the last five, seven years in the restaurant segment, there's been so much adoption of technology through your third-party aggregators, your loyalty apps, your people ordering online through your website — you can collect all that data, you can collect your competitors’ pricing strategies. And all of that comes together and starts to be analyzed in real time,” said Robert Carter, managing partner at the StratonHunter Group.

“The output is a much more competitive pricing strategy.”

However, food costs are a sensitive topic after nearly two years of high inflation, and companies need to be cautious in how they roll out and promote dynamic pricing and other tech, said retail analyst Bruce Winder.

“What Wendy's is trying to do is smooth out demand so that their patrons don't come exclusively at noon and exclusively at five or six,” he said. Lower prices at off-peak times could also attract more guests overall.

“But you’re kind of asking the customer to break a tradition that’s been around for a couple of hundred, if not thousands, of years."

Maintaining consumers' sense of privacy is also key — at least for now.

"If I pull up to a drive-thru and they say, 'Hey, Bruce, how you doing?' I might feel a little taken aback by that," Winder said. But experts also say younger buyers tend to be more blasé about personalized data collection.

Dynamic pricing already plays a role in a range of industries, and not just those led by digital disrupters. Airlines, hotels, big-box stores and sports venues all rely on sophisticated algorithms for continual price fluctuation based on demand, supply and consumer behaviour, as do companies such as Uber and Amazon.

The changes can be attention-grabbing — "send out a social media blast and you have a flash sale to drive traffic at those slower periods," said Carter.

They can also be subtle, involving multiple price tweaks per day to hundreds of flights or millions of products — or dozens of fast-food items across thousands of locations. "That's going to translate into millions of dollars in increased revenue from just very slight changes," he said.

Speedy drive-thrus and a smooth digital experience are more essential than ever to fast-food chains, where dine-in customers make up a shrinking share of revenue compared to pre-pandemic levels.

Delivery apps, pickups and drive-thrus accounted for 70 per cent of fast-food orders in Canada last year, with the remaining 30 per cent consumed on site, according to market research firm Circana

The transition hasn't been flawless. In the U.S., some customers have taken to social media to complain about their experience with drive-thru voice bots, which critics said pushed hard upsells and mistook orders from patrons in the next lane for their own. Drive-thrus can be noisy environments, while virtual assistants may struggle with accents, experts note.

None of that is stopping Wendy's.

"We are making a significant investment in technology to accelerate our digital business" — US$30 million on digital menu boards over the next two years alone — said McMillan.

There is no timeline for a rollout of the AI-enriched menus or dynamic pricing in Canada, she said.

This report by The Canadian Press was first published Feb. 28, 2024.

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Saskatoon gets new federal funding to fast-track housing - CTV News Saskatoon

Federal funding announced Wednesday in Saskatoon aims to fast-track the construction of housing for the city's most in-need residents.

The money is contingent on zoning changes, which will alter things like density requirements in some neighbourhoods.

The federal Housing Accelerator Fund promises to get more people housed in Saskatoon, and it comes at a critical time – with numerous factors contributing to a housing shortage, according to the mayor.

“We’re a city that people want to live in and are coming to, but the dynamics of building and the cost of inflation is creating a real supply challenge,” Mayor Charlie Clark said.

With this comes an issue that’s hard to ignore no matter which part of the city you’re in.

“As part of this we’re seeing an unprecedented amount of homelessness which is a huge issue that we’re facing,” he says.

In the plan, just over $41 million will be used to fast-track the development of 940 housing units over the next three years in Saskatoon.

In addition to homelessness, the plan aims to address a shortage of student housing near post-secondary institutions, which could open much needed space in other areas of the city.

“We want to get more student housing built quickly and, in the downtown, we have a number of applications for housing,” the mayor said.

Broadway is also among one of the first areas to see increased housing, as well as along transit routes in various neighbourhoods.

The member of parliament for employment and workforce was on hand for the announcement.

“Make sure we have the right mix of affordable and social housing right here in Saskatoon because yours is one of the greatest growing cities in the country,” Randy Boissonnault told the news conference Wednesday.

The federal program stipulates that the city change rules to allow things like four-unit dwellings on one lot and four stories near bus stops.

“We’ll continue to do our part to ensure that we will get housing built as soon as we can,” the mayor said.

Parking requirements that limit the number of on-street stalls will also need to be ammended to account for the higher density developments.

The program relies on various homebuilders and community groups to collaborate and make it a success. In ten years, it’s expected to spur the construction of more than 25,000 homes across the city.

The federal Housing Accelerator Fund was created in March 2023. As of the end of September 2023, more than $38.89 billion has been used to create almost 152,000 housing units and repair over 241,000 units. 

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Panera Bread Exempt from California’s Minimum Wage Increase for Fast-Food Worker - Bloomberg

Billionaire Greg Flynn, who made his fortune running one of the world’s largest restaurant franchise operations, is getting a new boost from sourdough loaves and brioche buns.

That's because a California law that’s about to raise the state minimum wage at fast-food spots to $20 an hour from $16 offers an unusual exemption for chains that bake bread and sell it as a standalone item.

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Klarna says its AI assistant does the work of 700 people after it laid off 700 people - Fast Company

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Klarna says its AI assistant does the work of 700 people after it laid off 700 people  Fast Company
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How fast can a menopausal cop run? Now we’ll never know - The Guardian

The British Transport Police have axed their annual compulsory fitness test, on the basis that it is discriminatory. Women were more likely to fail the “bleep test” – a multi-stage, short-interval running test – and therefore more likely to get shunted to the back office, which a 2021 report showed was contributing to the gender pay gap.

It was a particular source of indirect discrimination against menopausal women, which makes instinctive sense to people who conceive menopause as one universal, unavoidable negative – but I think, as an assumption, this is a little too casual. Menopause, however intense a form it takes – and the variation is massive – is a physical stocktaking event, and a lot of women end up fitter during and after it than they were before. I remember a personal trainer describing it as forcing you to engage with your body, and ask what kind of old age you wanted to have, concluding that women live longer than men because of that midlife period of reflection and adjustment. I said that in a meeting, once, and a colleague, who is also my friend, replied: “That is complete bollocks.”

At a different meeting about managerial responses to menopause, after a long discussion, someone tried to sum up the conclusions: a decent manager should never skirt the issue, yet at the same time should never mention it uninvited; should make allowances but never assume that allowances are necessary; shouldn’t wait to be asked what support is available, but at the same time should always wait to be asked. Put like that, it sounded impossible, until another colleague contributed: “Or in other words, act like a human being who isn’t stupid.”

I wouldn’t want to adjudicate on the police fitness test; it seems likely to me that menopause-aged men might also be relieved to see the back of it, or that a lot of menopausal women would smash a bleep test faster than the patriarchy. What would really discriminate against menopausal women would be a “politeness in meetings” test.

Zoe Williams is a Guardian columnist

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