The Globe and Mail - 02.11.2019

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SUSAN JANE WOOLNER

1951 - 2019

On October 29, 2019, Susan Jane

Woolner passed away peacefully

atBridgepoint Hospital in Toronto.

Predeceased by her parents James

Marshal Woolner andBettyAnn

Woolner. Survived by daughter

Marta, and siblingsBeth (Wim),

John, and Ward (Katharine).

As a lawyer Susan will be

remembered for her selflessness

and dedication to her clients. One

of her favourite pastimes was

camping inAlgonquin Park and

on the shores of Lake Superior,

often with her daughter Marta and

brother John.

As per Susan’s wishes there will

be no funeral.ACelebration of

Life will be held on Wednesday,

November 13, from 5 to 8 p.m., at

theArtfulDodger Pub, 10 Isabella

Street, Toronto. For those who

wish to make a donation in her

name, Susan has requested that

they be directed to theCanadian

Centre for Victims of Torture.

Online condolences may be left at

http://www.rosar-morrison.com

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TheGlobeandMail.

M

cDonald’s has a new plan to sell

more Big Macs: Act like Big

Te c h.

Over the past seven months,

McDonald’s has spent hundreds of mil-

lions of dollars to acquire technology com-

panies that specialize in artificial intelli-

gence and machine learning. And the fast-

food chain has even established a new tech

hub in the heart of Silicon Valley – the McD

Tech Labs – where a team of engineers and

data scientists is working on voice-recog-

nition software.

The goal? To turn McDonald’s, a chain

better known for supersized portions than

for supercomputers, into a saltier, greasier

version of Amazon.

As fast-food sales decline across the in-

creasingly competitive restaurant indus-

try, McDonald’s is looking for new ways to

lure customers. On Tuesday, the chain said

same-store sales in the United States were

weaker than expected for the third quarter,

sending shares lower. But in the coming

years, the company’s machine-learning

technology could change how consumers

decide what to eat – and, in a potentially

ominous development for their waistlines,

make them eat more.

So far, the technological advances can

be experienced mostly at the chain’s thou-

sands of drive-throughs, where for years

menu boards have displayed a familiar ar-

ray of McDonald’s favourites: Big Macs,

Quarter Pounders, Chicken McNuggets.

Now, the chain has digital boards pro-

grammed to market that food more strate-

gically, taking into account such factors as

the time of day, the weather, the popularity

of certain menu items and the length of the

wait. On a hot afternoon, for example, the

board might promote soda rather than cof-

fee. At the conclusion of every transaction,

screens now display a list of recommenda-

tions, nudging customers to order more.

At some drive-throughs, McDonald’s

has tested technology that can recognize li-

cence-plate numbers, allowing the compa-

ny to tailor a list of suggested purchases to

a customer’s previous orders, as long as the

person agrees to sign away the data.

“You just grow to expect that in other

parts of your life. Why should it be different

when you’re ordering at McDonald’s?” said

Daniel Henry, the chain’s chief informa-

tion officer. “We don’t think food should be

any different than what you buy on Ama-

zon.”

As the evolution of the McDonald’s

drive-through shows, the internet shop-

ping experience, with its recommendation

algorithms and personalization, is increas-

ingly shaping the world of brick-and-mor-

tar retail, as restaurants, clothing stores,

supermarkets and other businesses use

new technology to collect consumer data

and then deploy that information to en-

courage more spending.

At some stores, Bluetooth devices now

track shoppers’ movements, allowing

companies to send texts and e-mails rec-

ommending products that customers lin-

gered over but did not buy. And a number

of retailers are experimenting with facial-

recognition tools and other technologies –

sometimes known as “offline cookies” –

that allow businesses to gather informa-

tion about customers even when they are

away from their computers.

In the restaurant world, the increasingly

popular food-delivery apps have produced

a slew of customer data. But much of that

information is controlled by third-party

technology companies rather than by the

restaurants themselves, underlining the

importance of tech expertise as the indus-

try grows more competitive.

“A lot of the restaurant chains, the larger

ones that have the cash and the clout and

the depth, are really turning into quasi-

technology companies,” said Michael At-

kinson, who runs Orderscape, a company

that provides voice-ordering technology.

“All of them have that ambition.”

In recent years, Domino’s Pizza has dis-

tinguished itself as a technology leader in

the slow-moving world of pizza (it’s hard

to disrupt a crust recipe), aiming to capture

the growing food-delivery market with

streamlined phone and online ordering

systems, data-collection techniques and

even self-driving cars.

Like the new McD Tech Labs in Califor-

nia, Domino’s also has a tech headquar-

ters: the “innovation garage” in Ann Arbor,

Mich., where teams of employees drawn

from departments across the company

work on specific projects under one roof –

an approach borrowed from Silicon Valley.

“That’s 60 years’ worth of legacy corpo-

rate structure that we have blown up by

moving into this building,” said Dennis

Maloney, the company’s chief digital offi-

cer. “Domino’s started off as a pizza com-

pany that sells online, and we’ve managed

to transform ourselves into an e-com-

merce company that sells pizza.”

So far, however, Domino’s has stopped

short of the latest McDonald’s

play: acquiring entire tech

startups. (Pizza Hut, however,

recently acquired a company

that produces online order-

ing software.)

In March, McDonald’s

spent more than US$300-mil-

lion to buy Dynamic Yield, the

Tel Aviv-based company that

developed the artificial intel-

ligence tools now used at

thousands of McDonald’s

drive-throughs. The deal “has

changed the way the high-

tech industry thinks about

potential M&A,” said Liad Ag-

mon, a former Israeli intelli-

gence official who co-founded Dynamic

Yield. “We’ll see more non-traditional tech

companies buying tech companies as an

accelerator for their digital efforts. It was

genius on McDonald’s side.”

Already, the recommendation algo-

rithms built into the drive-through menu

boards have generated larger orders,

McDonald’s CEO Steve Easterbrook said

during an earnings call in July. (Mr. Henry,

the chain’s information executive, de-

clined to reveal the size of the increase.) By

the end of the year, the new system is ex-

pected to be in place at nearly every McDo-

nald’s drive-through in the United States.

In September, McDonald’s purchased a

second tech company, Apprente, a startup

based in Mountain View, Calif., that devel-

ops voice-activated platforms that can

process orders in multiple languages and

accents. In recent months, McDonald’s has

tested voice recognition at some of its res-

taurants, seeking to replace the human

workers who take orders with a faster sys-

tem.

McDonald’s insists that the rollout of

the voice technology will not cost jobs. But

at a time when it faces renewed protests

from workers over low wages and sexual

harassment, the chain’s new focus on tech-

nology could intensify scrutiny of how it

treats its workers and how they might be

affected by automation. While McDonalds

has reported impressive growth over the

last couple of years, some employees at its

restaurants make less than US$10 an hour.

“Try raising a family on that,” said

Adriana Alvarez, an employee in Cicero,

Ill., who has helped lead the high-profile

campaign for a US$15 hourly wage at

McDonald’s. “The company should be able

to balance tech and other investments

and, in the process, ensure workers like me

are safe on the job and have a seat at the

table.”

With unemployment at just 3.5 per cent

in the United States, the fast-food industry

is facing one of its worst labour shortages

in decades. Rather than eliminate jobs,

McDonald’s claims that voice-recognition

technology would allow franchise owners

to reassign workers to understaffed areas

of their restaurants. But across the indus-

try, fast-food experts say, some chains may

attempt to use voice tools and other tech-

nologies to replace workers.

“The labour shortage, frankly, has done

more to push restaurants toward technol-

ogy than almost anything else,” said Jo-

nathan Maze, the executive editor of Res-

taurant Business Magazine, a trade publi-

cation. “It enables you theoretically to be

able to run your restaurant with fewer peo-

ple.”

At the McDonald’s drive-through on

Fort Hamilton Parkway in Brooklyn, every

order still must go through a human being:

Last week, the voice on the other end of the

speaker sounded perplexed when a report-

er turned down the free soda that usually

comes with a cheeseburger and fries.

But the rest of the drive-through experi-

ence – with its digital screens and recom-

mendation algorithms – does indeed feel a

bit like shopping online.

“It’s a great, efficient way to take peo-

ple’s money,” said Marayah

Jerry as she waited at the

drive-through to collect a

Ranch Snack Wrap. “I’ll

come with an idea of what I

want, and then I see the pic-

tures, and I’m like, ‘That

looks good.’ ”

Another drive-through

customer, Dalila Ruiz, said

she noticed the suggested

add-ons at the bottom of the

menu board but resisted the

temptation to splurge. “I

don’t want to be so fat,” Ms.

Ruiz said. Not all McDo-

nald’s customers are likely

to show such discipline. Crit-

ics of artificial intelligence have long

warned that the technology could lead to a

dystopian future in which humans are sub-

ordinate to machines.

Before the robot apocalypse, however,

AI might simply make us fatter.

“There are real, significant unintended

consequences of something like this fur-

ther driving unhealthy eating and more

fast-food eating and obesity rates and dia-

betes rates going up,” said Scott Kahan, a

doctor who directs the National Center for

Weight and Wellness, an obesity clinic in

Washington. “These sorts of technologies

are making it hard for people to just find

some reasonable moderation.”

There is plenty of precedent for compa-

nies like McDonald’s finding creative ways

to persuade Americans to consume more

calories. But the marriage of a fast-food gi-

ant and an artificial-intelligence startup

marks an unusual new chapter.

When Mr. Agmon, the co-founder of Dy-

namic Yield, announced McDonald’s ac-

quisition in a company WhatsApp chat in

March, his colleagues thought he was jok-

ing. “When you start working for a tech

company,” Mr. Agmon said, “you don’t ex-

pect this.”

Soon, however, the news began to sink

in: The next day, 250 McDonald’s ham-

burgers arrived at Dynamic Yield’s head-

quarters in Tel Aviv, along with fries for the

whole staff.

But this wasn’t really a McDonald’s

crowd. By the time the staff finished hug-

ging and congratulating each other, the

burgers were cold.

NEWYORKTIMESNEWS SERVICE

McDonald’shasdevelopeddigitalboardsprogrammedtomarkettheirfoodmorestrategically,takingintoaccountsuchfactorsasthetime

ofday,theweather,thepopularityofcertainmenuitemsandthelengthofthewait.ROBERTBEATTY/THENEWYORKTIMES

Wouldyoulikefrieswiththat?

McDonald’salreadyknowstheanswer

Thefast-foodgianthasspent

hundredsofmillionsofdollars

thisyearalonetobuytech

companiesthatspecialize

inAIandmachinelearning

DAVIDYAFFE-BELLANY

The labour shortage,

frankly, has done

more to push

restaurants toward

technology than

almost anything

else.

JONATHANMAZE

EXECUTIVEEDITOR,

RESTAURANTBUSINESS

MAGAZINE