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Chatbots and a tortilla-making robot: Chipotle's AI

The restaurant chain uses the technology to provide recommendations to customers, help with complaints and improve its inventory system. It is also testing out AI in the kitchen.

Chipotle Mexican Grill is known for its burrito bowls and tacos, but less known about the self-proclaimed "as real as it gets" restaurant chain is its use of artificial intelligence technology.

However, the tech-savvy chain uses AI in nearly every area of its business.

The fast food company is part of a fast-growing wave of retailers using AI.

Indeed, AI in the retail market will register an compound annual growth rate of 30% by 2026, according to market research firm Mordor Intelligence.

And experts say the restaurant industry will similarly ramp up its use of AI.

During a streamed presentation at the AI4 Retail conference on April 20, Timothy Park, director of customer relationship management analytics at Chipotle, talked about how the company is using AI technology and automation.

Chipotle's use of AI

"With AI, we can really target and segment who gets what message and based on previous purchases and viewing habits. We can see how we can customize our messaging," Park said.

An example of this AI-driven marketing approach is the way the chain -- which has some 2,000 locations in the U.S., Canada and Europe --  targets the 27 million loyalty rewards members who have downloaded its mobile app. 

With AI, we can really target and segment who gets what message and based on previous purchases and viewing habits. We can see how we can customize our messaging.
Timothy ParkDirector of customer relationship management analytics, Chipotle Mexican Grill

Chipotle uses recommendation algorithms to send notifications to users of the app about deals tailored to the different foods they've ordered before, therefore improving their customer experience, according to the company.

Chipotle also uses AI to improve customer service.

The company uses natural language processing in its automated chatbot assistant called Pepper. Customers can file complaints with Pepper.

"What this does is free up our human agents to concentrate on those more complex cases that will require input and some of the more repetitive mundane requests can be automated using our chatbot," Park said.

Chipotle is also trying to reduce the amount of manual labor performed by humans by applying AI technology in its inventory system.

Without AI technology, humans must trace and track what the restaurant has in inventory and record the expiration dates of the supplies in a spreadsheet, Park said.

Now, Chipotle is testing radio frequency identification (RFID) -- a technology that uses radio waves to identify people or objects.

Screenshot of Chipotle's AI conference presentation
The restaurant company incorporates AI in every facet of its business.

Chipotle revealed in March that it was testing RFID at its Chicago distribution center and about 200 restaurants in Chicago.

Combining RFID with automation can help reduce waste, Park said.

Suppliers sign into the RFID program, scan the food items as they leave their premises and scan them again when they get to the distribution center and restaurants.

Essentially, the system automates more of the inventory process and reduces human labor by eliminating the manual recording of the distribution center's inventory.

"Imagine ... the time savings and efficiency for our employees," Park said.

Chipotle is also trying to reduce the amount of human labor needed for food prep. It is now testing an AI-based robotic kitchen assistant named Chippy.

Chipotle is looking at whether Chippy can replicate the flavor, texture and crunch of the chain's chips, Park said.

"We're testing to see if there's a difference between tortilla chips made by humans versus a robotic arm," he said.

AI cuts but also possibly creates jobs

With these restaurant applications of AI technology, some observers think AI tools are replacing people's jobs.

However, that's not the right mindset, Park argued.

"There will be jobs that robots will take over and they already have," he said, noting that people are not rushing to spend eight hours performing mundane tasks like flipping burgers.

While AI can take over many mundane tasks, including sitting in a parking booth accepting parking tickets or going through inventory, AI technology will add many more jobs "that haven't even been invented yet," he said.

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