Revolutionizing the Quick Service Restaurant Industry with Generative AI: Wendy's Journey
Title: Wendy's Embraces Generative AI for Enhanced Customer Experience
The quick service restaurant (QSR) sector is eager to adopt artificial intelligence (AI), particularly generative AI, as part of its transformation initiatives. Wendy's, a pioneer in this realm, embarked on its AI journey years ago, utilizing cloud computing services alongside generative AI to enhance both employee and customer experiences. Drive-thrus, a popular ordering channel for 75 to 80% of Wendy's customers, present numerous challenges due to menu complexities, time-limited offers, special requests, and ambient noise.
Acknowledging the massive potential of improving customer experiences, Wendy's chose to implement AI automation in their drive-thru to provide a seamless, quick ordering system. In an interview with Lopez Research, Wendy's CIO Matt Spessard discussed the company's AI progress and offered valuable insights for those wishing to incorporate AI within their businesses.
In 2024, Wendy's announced an expansion of its partnership with Google Cloud, leveraging Google's AI technology and resources to bolster its generative AI platform, called Wendy's FreshAI. The innovative platform addresses challenges traditional AI couldn't, including understanding casual conversations and accommodating the extensive customizations of Wendy's extensive menu. FreshAI was also launched with Spanish as an additional language option in 2024.
Rule-based AI chatbots were deemed insufficient because they struggle to support natural conversations' diverse and dynamic nature. Traditional AI follows a strict set of rules, which makes addressing the back-and-forth conversational complexities present in the QSR environment particularly challenging. Wendy's decided to utilize generative AI instead to interpret conversations, generate responses, and adjust in real-time.
While employee job loss concerns are prevalent in AI discussions, Wendy's shared that their AI efforts have also benefited their employees. Wendy's FreshAI acts as a supportive team member, eliminating ordering issues and empowering crew members to focus on order completion efficiency.
Measuring AI Success and Return on Investment at Wendy's
Wendy's defines AI success in a pragmatic fashion. Measured by speed, accuracy, and consistency, its AI-driven efforts aim to provide an exceptional ordering experience to customers. The company monitoring metrics such as the average percentage of orders successfully handled by the AI assistant without human intervention and service time. These metrics reveal that Wendy's FreshAI successfully handles an average of 86% of orders without human involvement, expecting further improvement in the future.
At one test site, service times were 22 seconds faster than the average in Columbus, Ohio. Wendy's adopted a broader definition of accuracy that includes orders started by the AI assistant and submitted to the point-of-sale system, even in the event that a crew member intervenes to correct an inaccuracy. When employing this broader definition, Wendy's FreshAI success rate exceeded 99%.
The Future of AI at Wendy's
Wendy's FreshAI has transitioned from a pilot phase to production, now available in nearly 100 restaurants across 17 states with Spanish language capabilities. The company plans to expand the technology deployment as it operates over 7,000 restaurants globally. In the future, Wendy's envisions the Fresh AI assistant as a scalable platform that spans various ordering channels, including mobile apps, kiosks, and smart devices.
Insightful Advice for AI Innovation
Wendy's CIO Spessard shared invaluable advice for other organizations planning to implement AI:
- Identifying Ideal Use Cases and Technologies: Organizations should first focus on determining where AI can provide the most value and choose the appropriate AI technology to address that particular challenge.
- Gradual Implementation: Spessard suggests starting with small-scale experiments within the organization to familiarize employees with AI capabilities, allowing for organic expansion as more use cases emerge.
- Ongoing Improvement: Emphasize continuous improvement by implementing a feedback loop, ensuring iteration, and adopting a mindset of even 1% improvement every day. Regularly analyze customer and employee feedback to refine the AI assistant's performance.
- Engaging Stakeholders: Regularly demonstrate AI capabilities and progress to key stakeholders, such as franchisees, to build trust and support for the initiative.
In the context of Wendy's AI journey, chatbots that rely on rule-based systems were found to be insufficient for handling the complexities of quick service restaurant orders, as they struggle with natural conversational dynamics. Instead, Wendy's decided to utilize generative AI, which can interpret conversations, generate responses, and adapt in real-time.
To ensure the success of their AI investment, Wendy's measures it by focusing on speed, accuracy, and consistency. These metrics, such as the percentage of orders handled by the AI assistant without human intervention, reveal that Wendy's FreshAI successfully handles an average of 86% of orders, with expectations for further improvement.
