Dive Brief:

• Wendy's has partnered with Google Cloud to leverage the tech company's data analytics, artificial intelligence, machine learning and hybrid cloud tools to improve the guest experience, the company announced Tuesday.
• These tools will create new ways for customers to order food at the drive-thru, on their mobile devices and through other touchpoints. Wendy's plans to use speech-to-text and Google Search and Maps.
• The QSR chain has been bulking up its technology infrastructure over the past few years, appointing a new chief information officer in October 2020, as its digital sales continue to grow in the double digits. 

Dive Insight:

This Google Cloud partnership is a big step forward in meeting Wendy's digital transformation goals. In addition to improving business analytics and reporting, the new partnership enables the chain to run real time AI and machine leaning anywhere within the in-store infrastructure or in the cloud, according to the press release.  

Google's speech-to-text technology will transcribe orders taken at the drive-thru or by phone into text for restaurant staff, which will help boost accuracy, Wendy's CIO Kevin Vasconi told The Wall Street Journal. Voice recognition could later be used to identify customers from previous orders and offer more personalization, such as anticipating favorite food or beverages or offering suggestions.  

Vasconi said the partnership could also allow it to build a computer-vision system. This technology uses video cameras with software designed to recognize objects and convert that into data that can issue commands. It could be used to create a system that can detect when drive-thru lines are too long, for example.

These Google Cloud technologies could help improve Wendy's drive-thru business. Speed of service across the QSR segment declined by 26 seconds and order accuracy also declined, with inaccuracies for 15% of all orders in 2021, according to SeeLevel HX. In QSR Magazine's 2021 Drive-Thru Study, Wendy's drive-thru times came in at about 341 seconds, placing it close to the middle of the ranking of top chains However, Wendy's has the worst order accuracy among the top chains at 85.3%, per the study. 

Wendy's has invested in making its restaurants "frictionless transaction centers," Wendy's CEO Todd Penegor said during the company's Q4 2020 earnings call. Last year, that meant adding curbside and mobile grab-and-go service. The company also launched its loyalty program in July 2020, which has helped boost customer engagement and orders. 

So far, the work has been paying off. Digital sales grew 10% in Q2 2021, outpacing the company's expectation for the quarter, Penegor said on an investor call. This growth was driven by a boost in delivery sales and mobile ordering gains. Wendy's loyalty membership increased 25% to 17 million in Q2 2021 compared to the first quarter, Penegor said.

"As consumer behaviors continue to change, along with the investments we are making as a brand, we expect to see this [digital] business grow meaningfully for years to come," Penegor said during the company's Q4 2020 earnings call. 

Boosting its technology infrastructure will also improve Wendy's competitive edge, especially as other chains like McDonald's, Burger King and Dunkin' modernize their in-store and/or drive-thru infrastructure. McDonald's, for example, has been investing more in technology since 2019 when it bought AI company Dynamic Yield and later created a tech innovation lab. The Golden Arches also began testing an automated drive-thru in Chicago earlier this year.  

While more QSRs have been investing in technology, many customers actually prefer working with staff members throughout the dining experience instead of solely using technology, according to a JLL Big Red Rooster study. Fifty-four percent said they wanted human help with the menu, while 59% wanted staff to help customize orders and another 63% wanted help receiving their orders.