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[BUSINESS] · United States, Australia · 42 sources

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McDonald's implements AI dynamic pricing and digital advertising pilots

McDonald's is implementing several artificial intelligence initiatives to modernize operations and diversify revenue. The company is using an AI pricing engine, operated by Tiger Analytics, to analyze millions of daily transactions and recommend 'optimal prices' for menu items based on local market data and customer willingness to pay. This dynamic pricing strategy has resulted in significant price variations; for example, a Big Mac was found to cost 21% more at one Fresno, California location compared to another just two miles away.

While McDonald's maintains that franchisees are free to set their own prices, several operators have reported feeling pressured to follow AI recommendations, noting that non-compliance could impact business reviews and franchise eligibility. This approach has drawn attention to potential antitrust and consumer transparency concerns.

Simultaneously, McDonald's is expanding its digital revenue streams through the McDonald's Media Network. The company is piloting a program at 450 company-owned U.S. locations that displays third-party advertisements on digital drive-thru menu boards after customers complete their orders. The company aims to grow this media business into a $1 billion enterprise.

In operational technology, the company is deploying its ArchIQ AI platform. This system is designed to manage inventory, assist kitchen staff, and handle drive-thru orders. McDonald's has begun trialing AI-powered voice ordering technology, known as Archy, in Sydney, Australia, following initial tests in the United States.

Entities

Amazon · ArchIQ · Chris Kempczinski · Geico · Ian Borden · McDonald's · McDonald's Media Network · McDonald’s · Morgan Flatley · Reuters · Tiger Analytics

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