Yum Brands, owner of KFC, Taco Bell and Pizza Hut, is seeing an increase in its marketing performance thanks to new bets on artificial intelligence (AI), executives said during the discussion on the company’s third quarter results with analysts.
“This quarter, we successfully launched personalized AI-powered marketing campaigns that, compared to traditional digital marketing campaigns, generated a significant increase in consumer engagement, leading to increased purchases and reduced consumer churn,” said Chris Turner, Yum’s chief financial officer. during a call with investors earlier this week.
Turner declined to disclose specific metrics stemming from Yum’s AI-driven marketing initiatives, but offered additional insight into how the fast-food giant’s “AI factory” works. For example, Taco Bell can collect data from point-of-sale and store digital menus, as well as leverage the chain’s popular loyalty program and app. Linking these sources of information together and enhancing them with AI enables more personalized promotions and a refined image of the customer for other marketing purposes.
Yum has conducted AI pilots across its three largest brands in the U.S. and believes these capabilities will be “widely and easily scalable” while delivering an overall stronger return on marketing investment, according to Turner.
“We will continue to bring it to life across brands and across markets as we move forward,” Turner said of AI.
In addition, Taco Bell is growing its AI voice technology while driving in the United States, the goal is to implement the solution in hundreds of stores by the end of 2024. Consumer response has been “very positive” so far, Turner said. Other restaurant brands have faced backlash for relying on automated technology that can offer shaky and imprecise responses. Yum, in total, has more than 40 AI-based projects underway.
Yum’s AI optimism comes as Taco Bell continues to outperform the rest of the company’s portfolio. The Mexican chain’s same-store sales rose 4% year over year in the third quarter and digital transactions soared 30%.
During the quarter, Taco Bell also made breakfast optional for franchisees, giving it greater flexibility in spending its marketing budget. growth drivers like its Cantina Chicken and value menus, CEO David Gibbs said on the earnings call.
