Dive Brief:

• KFC's digital strategy for 2020 will focus on exploring new drive-thru technologies including things like AI-powered menu boards, Chief Technology Officer Christopher Caldwell said in an interview with Nation’s Restaurant News. 
• Sixty-five percent of KFC's sales are made at the drive-thru, which makes technologies that can upsell menu items and improve order accuracy especially appealing. The chain also believes the tech could alleviate some of the labor shortage pressures currently facing the restaurant industry.
• Last month, the brand introduced a new online ordering platform that has "exceeded expectations" according to Caldwell.

Dive Insight:

Digital optimization has been a key asset for a number of QSR players as they compete with growing demand for delivery. Consumers spent 20 seconds longer on average waiting at the drive-thru between order and pick-up window between June and August of this year, according to QSR's Drive-Thru Study. Average wait time at the drive-thru has been steadily climbing over the last few years.

As diners' appetite for convenience grows, longer wait times could mean lost business. A 10-second delay at the drive-thru translates to 1% loss in comp sales, Sue Pittacora, former senior director of global business insights and analytics for McDonald’s, told NRN.

Many QSRs have already turned to technology to not only speed up the drive-thru process but to make the experience more enjoyable for guests. Chick-fil-A posts an employee outside with an iPad to accept orders and payment, for example. McDonald's has been a forerunner in the digital drive-thru category, testing an automated voice drive-thru system and chopping time-consuming premium items and trimming its late-night menu.

McDonald's also recently purchased Dynamic Yield, a startup that specializes in drive-thru personalization. It has already launched the company's technology to 9,500 drive-thrus in the U.S. and expects it to reach all relevant restaurants by the end of the year. Optimized menus may boost average check sizes as the technology learns more about what each guest likes and displays different menu items as they scan the menu to encourage add-ons.

Other players dabbling in the high-tech drive-thru space include Good Times Burgers & Frozen Custard in Denver, which is using an AI platform named Holly from Valyant AI to take and process orders, and Sonic's trial run of AI-powered menu boards from self-service kiosk provider ZIVELO earlier this year.

Although some consumers will embrace drive-thru personalization with open arms, others may be leery of the privacy concerns that it brings, since the the tech helps brands collect information about customers. T3, for example, is a startup working on facial recognition technology for drive-thrus that will recognize the driver and apply an order the customer's loyalty membership before they get to the window. 

KFC isn't just adding tech to its drive thru, either. It opened a new flagship store in its hometown of Louisville, Kentucky, this summer to serve as an upscale version of the restaurant. The store features self-serve digital kiosks, an area for mobile order and delivery pickup, and digital menu boards both inside and in the drive thru. Dubbed the American Showman design, KFC plans to update 50% of its U.S. stores with the new footprint and digital features by the end of 2019. The self-order kiosks help eliminate what it describes as order anxiety, which refers to the pressure some guests feel to make a quick decision while the cashier waits. It plans to have the kiosks installed at 5,000 restaurants globally by 2020.