IHOP Is Using Google Cloud AI To Personalize The Ordering Process

IHOP, the casual dining chain known for its pancakes and all-day breakfast, has partnered strategically with Google Cloud to be the first restaurant chain to implement an artificial intelligence-powered recommendation engine in its online ordering system. The technology, dubbed Recommendations AI, aims to personalize the customer experience by suggesting items based on past food preferences and ordering habits. A press release about the partnership provides the example of AI suggesting that someone order Poblano Eggs Benedicts if they like spicy food. So we imagine that if you've eaten a whole lot of chicken and crepes at IHOP, perhaps you'll see the new Chicken Pesto Crepes as a recommendation.

IHOP's investment in AI aligns with its broader focus on customer personalization. This also complements its recently launched Choice Menu, a permanent addition available on-premise and across all dayparts, accessible via the mobile app and website. It includes made-to-order chicken sandwiches, steak burgers, and fun seasonal items like Halloween-themed Scary Face Pancakes. IHOP expects the Choice Menu to drive and strengthen consumer engagement and spending. The initiative to integrate AI into its ordering process also fits thematically with IHOP's other efforts to personalize customers' experiences, such as a revamped website, a new app, and a loyalty program that already boasts around 6.5 million members.

According to Food Dive, research indicates that four out of five IHOP orders are customized, underscoring the importance of personalized dining experiences. A customer shift to online ordering has grown to account for over 20% of total sales in recent years. 

Meanwhile, the AI-embracing moves is arguably indicative of a broader industry trend. With digital participation in the restaurant sector up year-over-year, restaurant brands increasingly focus on personalized experiences. For example, quick-service restaurant Wendy's is leveraging its rewards program to drive more targeted messaging, while Starbucks now focuses on personalizing the in-restaurant experience. McDonald's has self-service kiosks that help drive sales and address labor shortage issues.

According to a PYMNTS report, 76% of restaurants are already automating operations, and 70% of consumers wish to leverage technological aids like apps and AI voice assistants for personalization and customizing their orders. Therefore, IHOP's adoption of AI technology is a strategic initiative reflecting evolving consumer preferences and industry norms. This all signals that AI is increasingly becoming integrated into human experiences, a transformation that is here to stay and evolving at a maddeningly quick pace, whether consumers actively embrace it or not.