Dynamic Pricing Isn’t the only Bet Wendy’s on Technology, Is It Really Necessary? A Quora on Artificial Intelligence Drive-Thru Assistant and its Implications for Franchisee

News stories this week claimed Wendy’s was planning to implement surge pricing which is when companies increase the price of products and services in real time as demand increases.

Dynamic pricing and daypart offerings, along with other enhanced features, will begin to be tested in the near future. As we keep showing the benefit of this technology in our company-operated restaurants, franchisee interest should increase further supporting sales and profit growth across the system.

And as noted in that quote above, dynamic pricing isn’t the only bet Wendy’s is making on technology. The Wendy’s in Columbus, Ohio boasted that they didn’t need human intervention 86 percent of the time after testing an Artificial Intelligence robot at a drive-thru. Now, Tanner says Wendy’s has already rolled out its AI drive-thru assistant in several other restaurants and has seen “ongoing improvement in speed and accuracy.”

The menu changes and suggestive selling are included. It isn’t clear what that means. It could be as simple as “It’s 11pm I know you are just here for a fast food joint but did you notice that a lot of people used lettuce on the spicy chicken sandwich? Either way, it will likely appear alongside surge pricing and an AI chatbot that gets it right 86 percent of the time.

I don’t like the idea of my breakfast and cold beer getting a price hike during the morning rush. I might just have to start driving down the road for a McCafe and an Egg McMuffin instead.

These kind of unpredictable price changes can cause customers to be confused and annoyed, Shumsky says. It can erode the trust customers have with a company and drive them to competitors.

Surge pricing has benefits for consumers, he said. It can result in lower prices during non-peak periods, and industries that rely on the relationship between a company and its customers — such as health care — likely won’t embrace surge pricing.

More recently, though, technological advancements have made it easier for companies to make minute-to-minute price changes in real-time based on fluctuating demand.

“They talked about, for example, getting more breakfast customers in,” Shumsky said. They might reduce breakfast prices in order to encourage people to come during low demand periods.

Wendy’s didn’t provide many additional details, but it said in a separate statement that the digital menus could allow the company to offer discounts to customers during slower times of day.

But after news outlets ran stories warning that Wendy’s was planning to hike prices during the busier times of day, company executives tried to better explain what Tanner meant.