Dive Brief:

• Yum Brands acquired Tictuk Technologies, a marketing technology and omnichannel solutions company that specializes in conversational commerce, according to a news release. Financial terms of the all-cash transaction, which has already been completed, were not disclosed.
• Founded in 2016, Tel Aviv-based Tictuk develops integrations for social media and messaging channels, including WhatsApp, Facebook Messenger, SMS and email, that allow consumers to interact with brands and take actions like placing an order. Yum already uses Tictuk in roughly 900 KFC, Taco Bell and Pizza Hut locations outside of the U.S., but the restaurant group now plans to scale the offering globally.
• The acquisition is Yum's second this month in the technology space. The marketer is trying to accelerate a digital transformation strategy that has grown more urgent as consumer habits driven by the pandemic are expected to become permanent.

Dive Insight:

Yum is ramping up its technology investments to keep pace with the demands of a rapidly changing restaurant industry. The pandemic has pushed more consumers to adopt digital and mobile ordering while dine-locations remain closed or operating in a limited capacity. Yum has felt a windfall from these trends and clearly expects some of them to stick. Digital sales across its portfolio reached a record $17 billion in 2020, a roughly 45% year-on-year increase.

But the broader shift to digital brings operational and customer experience considerations that may be costly and time-intensive to realize internally. Acquisitions are one way for Yum to access the expertise needed to tap into burgeoning spaces like conversational commerce, which it has already dipped its toes into through an existing partnership with Tictuk. Social media engagement at the same time has spiked among homebound consumers who could be more receptive to placing an order through platforms like Facebook, WhatsApp or even text message.

Tictuk's solution deploys a mix of chat, web features, advertisements and marketing technology to connect with consumers, per the press release. It can integrate with point-of-sale systems and is available across delivery, curbside pick-up and in-store channels. With the deal, Yum looks to offer "more frictionless ordering experiences," Chief Digital and Technology Officer Clay Johnson said in a press statement.

"Tictuk has a proven track record of driving increased conversion, loyalty and sales by making it even easier for customers to order our brands through their preferred social media or conversational channel," Johnson said.

Yum is enacting broader changes to spotlight mobile and digital ordering capabilities at its franchises. Taco Bell, for instance, is testing new restaurant concepts that prioritize drive-thru and limit dine-in seating. Taco Bell recently introduced a loyalty program as part of its mobile app to seize on consumer interest in ordering through the channel.

Earlier this month, Yum bought the artificial intelligence unit of performance marketing firm Kvantum. Kvantum's machine learning and econometric modeling are used to gauge the effectiveness of campaigns across owned, paid and earned media channels in specific geographies, while increasing media efficiency. The deal, expected to close by the end of the first-quarter, intends to help Yum "apply a disciplined marketing sciences program at scale and fast-track our data and analytics strategy," Johnson previously stated.

Yum expects that the Kvantum and Tictuk acquisitions will have an "immaterial impact" on its financial results.