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:

Voice Recognition or Speech Recognition technology, which also uses Speech-to-Text, captures what the customer is saying.
Natural Language Processing (NLP) interprets and processes the customer’s request.
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.