Source: FoodBev Media. https://www.foodbev.com/
Life is good for Yum Brands.
Second-quarter revenues are up and, in the past 90 days, nine Wall Street analysts have set an average one-year price target on the stock of $155.22, well ahead of today’s current share price of $128.00.
The Louisville, Kentucky-based company, which owns familiar food brands like Kentucky Fried Chicken, Pizza Hut, and Taco Bell, is also expanding its store checkout process in 2023. More specifically, the company is turning to artificial intelligence in a new campaign to ensure 100% of its global customer payments are made digitally.
The payment campaign, which focuses on having consumers pay for their food and drink either on the company’s mobile app, on a YUM web page, or via a third-party company, is already paying dividends.
“In the U.S., digital sales increased almost 35% year over year with kiosks now deployed in 100% of Taco Bell stores,” YUM CEO David Gibbs said on the company’s Q2 earnings call.
A key pillar of that growth is YUM’s nascent AI implementation, particularly in its rising recommended ordering and the company’s digitally-based point-of-sale system.
“As you may recall, recommended ordering is an AI machine learning module that predicts and recommends the quantity of each product a restaurant general manager should order,” said YUM CFO Chris Turner on the same conference call. ‘Recommended ordering was deployed in another 800 stores this quarter and is now live in over 4,400 KFC and Taco Bell U.S. stores.”
YUM is also leveraging artificial intelligence to enhance its next-generation, cloud-first, point-of-sale system “Which improves operational efficiencies and enhances team member effectiveness,” Turner notes.
The company is also leveraging AI to track orders, and boost product quality, and is looking for ways to install Voice AI into its store and app ordering process, Gibb says.
Driving Into Digital
The company says it’s committing to advancing its digital strategy going forward with technology driving the process.
“We’re using a new customer data platform solution to provide a unified view of customers across our U.S. brands and third-party aggregators,” Turner said. “This will enable us to improve digital experiences for our customers and ultimately increase customer frequency.”
“Eventually, this and other internal programs will provide the infrastructure to unlock personalized marketing, joint branding, and future automation. This is the latest step in our vision to achieve one day 100% of sales powered by digital,” he added.
CEO Gibbs underscored YUM’s reliance on AI to drive the company’s digital expansion.
In an early June speech at Bernstein’s 39th annual Strategic Decisions Conference, Gibbs cited AI as a “big positive for the industry and for YUM.”
“It’s not a secret, we already process a lot of orders using human beings and their voice,” he said. “Voice AI in places like the drive-thru and phone orders could have a massive impact on franchisees’ unit economics and the efficiency of our restaurants.”
“AI is going to change how we run our business and all of the changes will be positive for the consumer and very positive for our franchisees and unit economics,” he added.
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