• by Teresa Buyikian , August 29, 2023

It was only a matter of time until restaurants began adopting AI on a large scale to target online customers. Late last week IHOP announced it was the first restaurant chain to partner with Google to power its online ordering system with Google Cloud's Recommendations AI technology. Across IHOP restaurants nationwide, customer will now begin receiving more personalized recommendations when ordering online.

IHOP is utilizing AI to create personalized online ordering experiences for customers based on their preferences and changes to IHOP's menu offerings, pricing and promotions. For example, if a customer frequently orders spicy items online, and IHOP adds a new spicy dish to their menu, the item will be promoted to the customer.

IHOP, which operates more than 1700 locations worldwide, touted the AI integration as part of the brand’s investment in its rapidly growing online ordering and to-go business. The company has recently launched a new website, app and guest loyalty program.

What does the IHOP-AI partnership actually mean in terms of data, loyalty and overall execution?  QSR Insider spoke with online marketing experts who agree that AI integration comes down to scale, data and how it is utilized.

“There's a big opportunity to surface personalized recommendations in the restaurant digital experience to increase conversion and upsell — it's an excellent use case for AI. That said, there's a big difference between 'using AI' and ‘using AI to produce business outcomes,'” said Zach Goldstein, chief executive officer and founder of Thanx, a loyalty, CRM and engagement platform.

As for the effect on loyalty and rewards programs, Goldstein commented, “World-class loyalty programs are more than rote rewards — they are about delivering personalized experiences based on the purchasing data of every customer. The best programs out there are running tens of unique customer segments. The opportunity with AI is to run hundreds or thousands with the same amount of effort.”

And at the end of the day, it’s still all about the data. “The promise of the internet has always been data collection,” commented Stephen Fahlsing, founder and managing director of digital agency BonfireLA. “The ability to understand and analyze customer behavior and preferences in order to provide a better customer experience online isn’t new. AI tools are just making it faster, better, and smarter. Any restaurant chain that isn’t embracing AI is falling behind.”