Yum! Brands Is on a Journey to Digital Supremacy With Latest Acquisition of Dragontail Systems Limited

Yum! Brands, parent company to KFC, Pizza Hut, Taco Bell and Habit Burger Grill, recently announced its plans to acquire technology solutions company Dragontail Systems Limited for $72.5 million. This deal is the latest in a series of moves Yum! Brands is taking to establish digital supremacy in the quick service restaurant space.

Dragontail Systems Limited manages and optimizes the entire QSR process from food preparation all the way to delivery to a customer. Its AI component automates kitchen flow, dispatches delivery drivers, works with third-party delivery partners and allows customers to track their orders.

“With Dragontail, we expect to tap into the power of AI to accelerate and further enhance our delivery technology capabilities, especially at Pizza Hut, and optimize the end-to-end food preparation process,” said Yum! CFO Chris Turner in the company’s press release.

Dragontail’s technology is already operating in 1,500 Pizza Hut locations in 10 countries, and Yum! Brands eventually plans to have it in all brand stores worldwide. This is the third acquisition in three months for the restaurant operator. In March, Yum! Brands announced it would be acquiring Kvantum, an AI-based consumer insights and marketing performance analytics company. Just a few weeks later, Yum! Brands announced it had also acquired omnichannel ordering and marketing platform Tictuk Technologies.

Many other QSR brands are following suit in the quest for digital innovation, especially when it comes to machine learning and AI. Although consumer demand for convenience and speed was already increasing, the pandemic accelerated the need ten-fold.

Chick-fil-A and McDonald’s are currently using Fingermark’s Eyecue technology to analyze and improve their drive thru experience. The platform uses machine learning to analyze trends, gather and display data, identify slowdowns and even suggest when it’s time to open a second window or send in extra personnel.

McDonald’s also acquired Dynamic Yield back in 2019, which uses insights such as the time of day, weather and busyness of the store to display or not display certain menu items. The result was higher average checks per customer. 

Since some customers still prefer to order over the phone no matter how sophisticated the app is, brands like Domino’s and Wingstop are investing in voice-activated ordering to use voice-activated assistants like Amazon’s Alexa and Google’s Home to digitize that order taking process.

These moves to make the ordering and delivery experience as fast and seamless as possible are not unfounded. Profits from digital orders have been steadily increasing over the past few years worldwide. Although there was an uptick in 2020 due to the pandemic, those numbers aren’t expected to slow down any time soon.

Looking at Yum! Brands specifically, the company recorded an all-time high of $17 billion in digital sales for 2020. In Q1 of this year, digital sales hit another all-time high of $5 billion, with a 16% increase year over year in deliveries.

As brands heavily invest in digital solutions, whether it's through a mobile app that tracks a customer’s location to get them to order ahead of time or a digital menu board that suggests higher-priced items, one thing is clear — the path to optimizing the customer journey and giving companies unparalleled insight into consumer behavior are deeply intertwined.