2021 Restaurant Industry Outlook: More Innovation Ahead

Silver Linings

Looking back at the past year, there have been some silver linings. “The pandemic forced our industry to innovate much more than before,” notes Dr. Cihan Cobanoglu, CHTP, McKibbon Endowed Chair & Director of M3 Center, University of South Florida. Plus it “accelerated tech adoption at a record pace,” noted Fred LeFranc CEO and Chaos Strategist,  Results Thru Strategy. “Restaurants moved the equivalent of 3-5 years forward.”

Some tech innovators were a bit better prepared to weather the pandemic.

“We were prepared. This was partly luck and timing,” explained Susan Carrol-Boser, VP of IT and Chris Shaffery, VP of Ops, at White Castle. “It’s one thing to talk about how the world is changing and we need to keep pace. It’s quite another to see a super collider of rapid change happening all around us. Being family-owned means we take a long view – COVID forced us to rely on that equity and knowledge we have as a team to put real change into practice.” 

Noodles and Company was able to reap the rewards of its investments in its digital ordering ecosystem. “The ways in which the relationship between our team members and guests have necessarily changed has also supported some really positive, technology-enabled improvements,” said Corey Kline, VP of IT. “The closing of dining rooms and desire for contactless service supported the drive within our restaurant teams to activate a number of long-discussed features related to curbside service. And the new types of service being provided by our team members caused our guests to not just support but ask for the ability to tip … which has had a dramatic, positive financial impact on our team members.”

Restaurants were forced to innovate at a rapid pace. Casual restaurant chain Uncle Julio’s Restaurant Group took advantage of its existing resources – IT, operations, staff, kitchens and more to launch the virtual Savage Burrito brand in 3.5 months. “We used our existing ecosystem to stand up a separate brand,” explained Sreedhar Vemireddy, Vice President of Information Technology, Uncle Julio’s Restaurant Group.

Looking to the 2021 and beyond, restaurants are looking to increase operational efficiencies and future digital innovations including those that complement or enhance off-premises dining. As COVID-19 vaccinations are rolling out, there’s an air of optimism on better days ahead.  

Top Priorities

With 2020 in the rear view mirror, restaurant execs shared their top priorities for 2021.

Bachmann: We’re continuing to launch new initiatives to make Smashburger more accessible to our guests digitally. We have a blend of in-house developed and licensed technology being implemented now, and in the future, we hope to focus on automated voice ordering, social media ordering, automation in store and AI-based ordering.

Carrol-Boser and Shaffery: We are focusing on delivery in 2021 – making that an even better experience and exchange with our delivery partners and for our craving customers who are enjoying the food.  While it sounds simple, 2020 taught us our dining rooms were not always going to be an option and our drive-thru can be a bottleneck.

To support this our technologies are focusing on improving our ability to deliver on operational excellence no matter the circumstance, by providing more options for our customer and more tools for our team.  We are integrating all of our delivery partners, improving our delivery menu experience, innovating in our drive-thrus …  it’s a back to basics with a twist on doing it better. We are focused on making it even easier for our customers to let us know what works best for them, and then removing any barriers so we can meet their needs, faster and better with the hot and tasty food they crave – basically, making integration of the overall experience a top priority.

Cyril: Reevaluating our point-of-sale system. Although our system is functional, COVID-19 uncovered opportunities for growth. Most integrations like contactless payments, online ordering, off-premise options are centered around the POS system, and we need to have a more robust, dynamic and scalable solution for sustainability. Evolving our POS system will help make operations at each location more efficient, which in turn, will add value to our brand and showcase to current and prospective franchisees another reason they should consider investing in our brand and our future.

Holman: Personalizing the customer experience, restarting tech initiatives that were halted due to COVID, contactless payment.  Upgrading CRM/loyalty programs, optimizing digital customer journeys for fulfillment (BOPIS, curbside, delivery, etc.)

Kline: We continue to be focused on increasing the quality of our digital ordering experiences for all guests… but really for each individual. This focus requires us to manage a number of overlapping workstreams and areas of product improvements. We realize that we need to elevate the experience for frequent, logged-in guests, those who always place the same order, guests who value the ability to highly customize their orders, those who value our loyalty offering and those who aren’t interested… The imperative has become digital experiences that honor and flex based on the characteristics of the order and the guest, in real-time.

LeFranc: Rationalizing the company’s tech stack. Many rushed into apps for online ordering and other touchless transactions without regard for integration and information exchange.

Shufeld: Virtual ordering, robot high-tech foodservice delivery.

Vemireddy: We are taking all measures to improve direct ordering from our website and partnering with third-party delivery. Our big issue is to provide digital experience where customers can order contactless and make payments contactless. COVID has brought so many changes in the hospitality world. We are trying to enable and enrich the IT ecosystem so customers can have as little as contact as possible.

What is the greatest disruptive force on your business?

Bachmann: The biggest challenge we faced during the pandemic was pivoting from a primarily dine-in model to adapting to an unprecedented increase in takeout orders. With safety becoming a major concern when it comes to dining out, it became essential for Smashburger to be transparent with how we clean our restaurants and how we are keeping people safe. … We adopted this “clean must be seen” mentality where we sanitize our restaurants every 15 minutes, so our guests can feel confident when dining with Smashburger that their safety is the utmost priority.  

Carrol-Boser and Shaffery: With our top priority being safety, the pandemic has put stress on making sure we keep Castles staffed and open. We’ve needed to change how we schedule team members and needed to elevate all of our communications outreach, especially with our hourly team members. Thankfully, we have deployed tools, like a team member app, in recent years that continues to help us power through these challenging times.

Cyril: Time. Taking a 5-year plan, moving revenue objectives to the forefront and getting those implemented within 9 months.

Holman: The interference of non-hospitality forces (state, local and federal government, card issuers, etc.) negatively impacting the conduct and profitability of the business.

Kline: The role of delivery in our business continues to be an area that requires constant attention from almost every discipline.

LeFranc: COVID regulations and consumer behavior.

Vemireddy: The $15 minimum wage. We are looking at different technologies to see how we can work the requirements yet provide the same service to our brand. It is going to hurt small businesses and impact their ability to survive.

In the wake of heightened sanitation protocols, restaurants are looking to technology  to help manage infrastructure and workforce.  

Bachmann: Smashburger uses several different technology platforms to manage the restaurant infrastructure and employees. We have focused even more on eLearning to keep our restaurant teams current on safety procedures during the pandemic.  We also utilize the scheduling platform to aid in both communication of new procedures and changes due to local conditions related to the pandemic.

Cyril: Besides implementing handheld devices and contactless payments, embracing technologies such as PathSpot, CleanMotion on our cafe infrastructure is something we are looking into … as well as upgrading our filtration system and hand sanitizing stations around our cafe.

Kline: We’ve been working to integrate several technologies that enable the shockingly complex process of collecting team member health information. This initiative started with identifying the mobile-friendly platform that enables team members to regularly report the appropriate details – in a world where what those details can and should be is changing often. From there we have been layering in the solutions to streamline the follow-up processes for restaurant leadership and support our team members in returning to work as quickly and safely as possible in the event of an issue. And there’s a really complicated payroll component.    

LeFranc: Enhanced ventilation that kills the virus.

Carrol-Boser and Shaffery:  We don’t know for certain what the future holds, but we know keeping our team safe will be something we are focused on for as far as the eye can see.  With that in mind, new tracking systems for positive COVID cases and other advancements will be valuable tools.