For restaurants, one of the downsides of online ordering is that there isn’t a waiter pitching appetizers or a side of bacon. IHOP is betting that using Google’s AI-powered recommendations will help that.
(Bloomberg) — For restaurants, one of the downsides of online ordering is that there isn’t a waiter pitching appetizers or a side of bacon. IHOP is betting that using Google’s AI-powered recommendations will help that.
Customers logged onto the company’s website will now see suggestions to compliment their order, according to Krish Lakshminarayanan, vice president of data and analytics at Dine Brands Global Inc., IHOP’s parent company. That might look like pointing guests who like flavored pancakes to a pumpkin spice version or adding coffee to an order.
IHOP is joining peers who have pushed into AI to cope with a surge of online and to-go ordering during the pandemic that upended the industry. Roughly 20% of sales at the pancake house now come from guests who don’t eat in person, up from about 9% in 2019.
Getting suggestions is an “experience that guests have become accustomed to when they dine in with us,” IHOP Chief Marketing Officer Kieran Donahue said in an interview. “Now they can become accustomed to it when they’re using IHOP.com.”
The AI recommendations are part of the company’s plan to boost its to-go business, which has also included a website revamp and the launch of a loyalty program. IHOP has been performing better than sister brand Applebee’s, with franchise sales rising 11% in the first half of this year from the same period in 2022 and helping offset weakness in other parts of the Dine portfolio.
Online recommendations have been employed for years on sites such as Amazon and Netflix, but they’re less common among restaurants, which have been slow to adopt some technologies.
Google said IHOP is the first brand in the restaurant industry to tap its Google Cloud recommendations AI, which retailers such as Macy’s are already using. The technology draws on the tech giant’s experience suggesting content across its online empire, including YouTube.
IHOP says suggestions come from browsing and transaction history on its website, as well as promotions and new menu items. In one test by Bloomberg News, an order for buttermilk pancakes was given recommendations for six items, including blueberry pancakes, French toast and a steak omelette.
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