UPDATE: Feb. 28, 2024, 11:39 a.m. GMT. Wendy’s clarified to Mashable that it will not introduce surge pricing. Instead, it may test variable pricing to reduce prices during quiet times.
“We have no plans to increase prices during peak demand and would not do so when our customers are most frequent,” Wendy’s stated in a recent blog post. “Digital menu boards could enable us to modify menu offerings at different times of the day and provide discounts and value deals to our customers more effectively, especially during slower periods.”
Original article continues below.
Wendy’s will start a trial of dynamic pricing soon. This move reflects the current state of capitalism.
During Wendy’s Q4 2023 earnings call, the fast-food chain announced that it would test “dynamic pricing” starting next year. Similar to Uber’s surge pricing, this would lead to fluctuations in the prices of Wendy’s menu items based on demand, with prices rising when more customers are ordering.
For example, if you planned to get a Baconator for a midday snack, you might end up paying more if you bought it during the busy lunch rush.
Wendy’s will start using an AI chatbot to take drive-through orders
CEO Kirk Tanner mentioned that Wendy’s will invest $20 million to deploy digital menu boards in all company-owned restaurants by the end of 2025, making it easier to implement their dynamic pricing strategy.
“We are always dedicated to enhancing the customer and employee experience, and in this spirit, we are incorporating more technology in our restaurants,” Tanner explained. “We anticipate that our digital menu boards will immediately enhance order accuracy, improve employee experience, and drive sales growth through upselling and consistent merchandising execution.”
In addition to dynamic pricing, Tanner also revealed that Wendy’s will introduce different promotions based on the time of day, with a specific focus on boosting breakfast sales. The company will also experiment with “AI-enabled menu changes and suggestive selling,” with these changes expected to launch next year.
This is akin to a waiter suggesting the perfect wine to accompany your steak, but in this case, it’s recommending a Loaded Nacho Chicken and Classic Chocolate Frosty, all powered by a machine learning algorithm instead of human staff.
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Some may argue that part of the appeal of fast-food chains is the consistency they offer. A Dave’s Double at one Wendy’s location should be identical to another, including its price. Introducing fluctuating surge pricing challenges this fast food norm and removes the assurance of getting an affordable meal at any visit to such an establishment.
However, instead of only increasing prices during peak hours, Wendy’s might opt to lower prices during slower periods to attract more customers, a change that likely few would oppose.
In a statement to Mashable, Wendy’s mentioned that their AI-based menu changes and suggestive selling experiments would rely on factors like weather.
“As previously shared, we are investing significantly in technology to boost our digital operations,” Wendy’s stated. “Wendy’s has always focused on delivering high-quality food at a great value to our customers, and this recent investment will continue to attract customers and offer value during slower times of the day.”
Tanner also provided an update on the rollout of Wendy’s AI chatbot. Launched in partnership with Google Cloud as Wendy’s FreshAI, the technology aims to automate drive-through orders through voice recognition. As of December, the technology had been deployed in four Wendy’s locations in Columbus, Ohio, with more to come.
According to the CEO, Wendy’s restaurants using FreshAI have seen ongoing enhancements in speed and accuracy.
“This technology also plays a vital role for our restaurant team, allowing employees to focus on core tasks such as preparing fresh, high-quality Wendy’s favorites and building lasting customer relationships,” Tanner explained. It remains to be seen how these relationships will be fostered if customers no longer engage directly with human staff.
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Amanda Yeo is Mashable’s Australian reporter, covering entertainment, culture, tech, science, and social good. This includes everything from video games and K-pop to movies and gadgets.
