McDonald's to acquire decision-logic firm Dynamic Yield to personalise in-store ordering

McDonald's makes its largest acquisition of the past 20 years - with a decision-support technology company

McDonald's is to acquire Israeli start-up Dynamic Yield in a bid to better personalise in-store ordering.

According to Bloomberg, McDonalds will spend more than $300 million scooping up the technology company in McDonald's largest acquisition of the past 20 years. Certainly, McDonald's can afford the deal - last year, the burger giant reported net income of $6 billion and ended the year with a free cash flow of approximately $4.2 billion.

In recent years, the company has rolled out self-service machines in stores to overcome staff shortages and increased costs related to rising minimum wages. Having shifted to self-service, it is now looking to inject its machines with extra intelligence.

Dynamic Yield describes itself as a decision-logic start-up. Based in Tel Aviv, Israel the company works with popular brands across travel, finance, e-commerce, and media and provides them algorithmically driven personalised online experience.

McDonald's serves approximately 68 million customers each day, both in-store and via drive-throughs.

It is at the drive-throughs in the US that McDonald's plans to start its deployment of Dynamic Yield's technology.

The acquisition will enable McDonald's to use the new technology to create menu boards personalised to things like weather, current restaurant traffic, regional preferences, time of day and trending menu items. When a customer places their order, the display will also recommend additional items based on their selection.

According to McDonald's, it tested Dynamic Yield's technology at several US locations last year, and now plans to introduce it more widely once the deal is closed.

The company also plans to roll out the technology to international markets later and to integrate it into other products, such as McDonald's Global mobile app or self-serve kiosks.

Since 2015, McDonald's CEO Steve Easterbrook has made several major, data-focused investments in a bid to help the company stand out among its rivals. The changes include self-order kiosks, digital menu boards and delivery, and the launch of a mobile app enabling customers to order on the move and collect it without waiting.

Last year, the company shifted its headquarters to Chicago's West Town neighbourhood in a bid to attract young talent.

McDonald's decision to buy Dynamic Yield also shows its desire to use technology to boost growth in the highly competitive restaurant industry.

Once the deal is closed, McDonald's will become sole owner of Dynamic Yield. The Israeli firm will remain a stand-alone entity, able to serve its current customers and attract future clients - McDonald's rivals, though, may choose to shop for such technology elsewhere.