60-Second Read: Why Yum! Brands Bought an AI Analytics Company
Yum! Brands, based in Louisville, Kentucky, is one of the biggest fast food companies in the world. Currently, they run KFC, Pizza Hut, Taco Bell, WingStreet, and a few others for a total of more than 43,000 owned and franchised restaurants worldwide. With 34,000 employees (not including hundreds of thousands who work for franchisees) and revenues around $6 billion, it’s hardly surprising that a company like Yum! Brands would make significant purchases, but the company’s recent acquisition of Kvantum raised a few eyebrows.
What is Kvantum?
Kvantum was founded in 2012 to develop and deploy algorithms and AI (artificial intelligence) models to help brands better understand consumer behavior. By analyzing purchasing patterns and running them through proprietary algorithms, Kvantum’s tech can advise marketing strategy, product launches, seasonal promotions, and budget allocation for all of Yum! Brands’ properties.
Why Does Yum! Brands Want AI?
By acquiring Kvantum, Yum! Brands can incorporate their technology directly into their own tech stack while at the same time keeping it away from their competitors. Yum! Brands isn’t the only one with this idea — in 2019, McDonald’s acquired speech AI company Apprente to help automate their drive-thrus and a separate AI company to help tailor their touchscreen menus to specific customers.
Massive fast-food companies like these service tens of millions of customers a day worldwide, providing unprecedented amounts of data on purchasing patterns based on location, time of day, and previous purchases.
Yum! Brands is hoping that this new technology will allow them to make stronger predictions about what their customers want in addition to where and when they want it. Equipped with better prediction software, the entire company’s marketing could become far more efficient.
Most companies don’t have the resources to acquire or develop their own AI software, but there’s no doubt that technology is becoming more and more involved in marketing decisions. Pattern recognition techniques like this will continue to inform companies in every sector. If marketers are going to keep pace with the changing world, they’ll have to keep an eye on new technology and how best to put it to use.