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Fast food is getting faster
Conversational AI for QSR
Private Equity
Industry Analysis

What is conversational AI? How is it being deployed at quick-service restaurants?

Voice-based conversational systems for delivering human-level customer experience are gaining traction in the QSR (quick-serve restaurants, also known as “fast food”) industry.

The latest voice-based QSR technology involves three components:

  1. Voice Recognition or Speech Recognition technology, which also uses Speech-to-Text, captures what the customer is saying.

  2. Natural Language Processing (NLP) interprets and processes the customer’s request.

  3. Natural Language Generation (NLG) crafts natural, human-sounding responses to the customer.

These technologies are integrated with ordering kiosks and point-of-sale systems (POS) to streamline the fulfillment process.

Outside the live ordering process, voice-based systems in QSR are powering mobile apps that enable users to locate restaurants, interact with menus, and find suggestions on what to choose.

Major chains, including Domino’s, Denny’s, and Starbucks, have already carved their place in the voice ordering revolution. From in-app voice-activated ordering to complete integration with Alexa, Google Assistant, Cortana, and other voice assistants, these restaurants are making it easier than ever for customers to order their favorite meals.

How do QSRs benefit from Voice-based conversational systems?

Higher Throughput: AI allows fast-food employees reduce the time spent taking orders, allowing for faster drive throughs and more revenue potential per unit.

Error Reduction: Restaurants model human error loss at every unit, usually from attendants incorrectly keying order into point-of-sale (POS) terminals. Automated order processing eliminates manual tasks and reduces human error.

Reduced Operational Cost: Restaurants will be able to operate with a smaller staff, focused more on execution than order processing.

Consistency in Service Quality: In a fast-moving environment of a QSR, it is not an easy task to ensure customers will have a consistent experience across locations. Technological standardization provides customers with the comfort and service quality they expect in every interaction with a brand.

Market Sizing and Industry Forecasts

Grand View Research, Inc. forecasts that the global speech and voice recognition market size is estimated to reach $31.82 billion by 2025. The market is going to exhibit a CAGR of 17.2% during the forecast period.

Marketwatch.com predicts that the global market for Conversational Artificial Intelligence (AI) is estimated to reach a market value of $15.82 billion by 2024 growing at a CAGR of 30.32% during the forecast period 2019-2024.

According to Capgemini, overall voice adoption in key global markets (the US, UK, France, and Germany) has risen from 51% to 55%. In Germany, for example, it has jumped from 36% in 2017 to 51% today (May 2019).

Further prediction according to Capgemini shows that, over the next three years, 70% of consumers, on average, will replace their visits to the dealer, store, or bank with their voice assistants.

M&A Activity

In September 2019, McDonald’s agreed to acquire Apprente, which uses artificial intelligence to understand speech. The technology will be used in its drive-thrus and could be used in its self-order kiosks and the mobile app.

In October 2018, NEXTEP was acquired by Xenial. The new bigger and better Xenial now has an unparalleled range of products and services, including customer engagement for many vertical markets including parking; front, middle, and back of house restaurants; and self-serve technologies for managed foodservice, convenience stores, and grocery.


Conversational AI Industry Leaders

Dialogflow
Dialogflow
Dialogflow (formerly Api.ai, Speaktoit) is a Google-owned company. Dialogflow is a conversational UX platform that offers the solution for customization of brand unique, natural language interactions for devices, applications, and services. With their innovation, users can develop conversational agents, virtual assistants, artificial intelligence, conversational UX with the help of natural language processing, speech recognition, and machine learning.
Valyant AI Inc.
Valyant AI Inc.
Valyant is a Colorado-based artificial intelligence (AI) company focused on customer service in the quick-serve restaurant industry. They have spent years developing a proprietary conversational AI platform that focuses on making the drive-thru faster at quick-service restaurants (QSRs). They claim that they have built the world’s first customer service AI designed for existing retail hardware, in order to break down barriers between humans and computers through natural communication.
Clinc, Inc.
Clinc, Inc.
Headquartered in ANN Arbor, Michigan, an AI-based platform that allows businesses and individuals to design and deploy business applications. Clinc offers a global conversational AI training platform providing services related to deploying the next generation of natural language processing and deep learning technology for enterprises. Clinc has deployments in 6 countries and 80 languages, and partnerships with some of the largest institutions in the world.
MindMeld, Inc.
MindMeld, Inc.
Based in San Francisco, California, MindMeld is an advanced AI platform powering a new generation of intelligent conversational interfaces. Acquired by Cisco back in May 2017, they are capable of powering intelligent conversational experiences for any app, device, or website. MindMeld has been widely recognized as a leader in Conversational AI, and enterprises use this platform to create conversational assistants that understand what users say and find the information they need.
Voysis Limited
Voysis Limited
Voysis's headquarters is located in Sir John Rogerson's Quay, County Dublin. Voysis develops a voice AI platform that enables natural language instruction, search and discovery across consumer and enterprise applications. They believe that voice technology and voice interactions can be as natural as human ones and working for their clients to enable their customers to enjoy natural voice interactions via their AI platform.
Conversable Inc
Conversable Inc
Headquarters is in Austin, Texas. Conversable has been a Subsidiary of Liveperson Inc since Sep 2018. Conversable develops an enterprise conversation platform for creating on-demand automated response flows through one-to-one conversations in any messaging channel. They provide on-demand content, customer self-service, and conversational user experience via voice applications across multiple platforms, including Facebook Messenger, Twitter, Web chat, SMS, Amazon Alexa, Google Assistant, and many others.

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