According to the National Restaurant Association, the restaurant industry’s sales for 2018 exceeded $800 billion, with Americans spending 48% of their food budget on restaurants. This is in stark contrast to the 25% that they spent at restaurants in 1955.
The fight for stomach share is no longer as straightforward as it was even a mere five years ago. Consumers’ options stretch across segments, service models and business sectors as third-party delivery, off-premise dining and even prepared food options from C-stores blur the lines between concepts and service expectations. To address the shifting dynamics that are driving restaurant sales to skyrocket despite reports of dwindling foot traffic, restaurants need to consider infrastructure and innovation changes that will position them for the next-generation of digital dining.
Start with the Cloud
Before making a roadmap for a restaurant of the future, enterprises must have a foundation to support future innovation. Operating in the cloud with a robust high-capacity network ensures a brand is flexible and able to stay connected to the infrastructure across the enterprise.
Legacy systems remain a top technology challenge, holding back 41% of restaurants surveyed in Hospitality Technology’s (HT) 2019 Restaurant Technology Study. The restaurant industry remains in the early stages of embracing the cloud, which opens a new world of possibilities to restaurants of all sizes, says Hughes (https://business.hughes.com). Moving to the cloud can be a great equalizer, enabling the smallest of brands to embrace technology. Once operations are in the cloud, an IT department can work in an agile environment that will enable a variety of future-ready technology initiatives.
Restaurant customers around the world have similar demands. Quick and efficient service is the top factor for today’s restaurant customers, according to an Oracle Food and Beverage (www.oracle.com) research report titled “What Matters Most to Restaurant Guests;” 84% of 15,000 consumers in 14 countries surveyed identified quick and efficient service as a top factor, followed by order accuracy at 83%, and enough staff to provide good service at 82%.
Self-Service Ordering Solutions
Sources interviewed by HT agree that future-ready self-service solutions, including tableside ordering, pay at the table (PATT) and self-ordering kiosks, are another technology that can make a large impact.
“On the customer-facing side, the order process is a prime candidate for tech infusion,” says Chris Randall, managing director of L.E.K. Consulting (www.lek.om), a management consulting firm.
“Instead of a customer waiting for a server, give the customer control of the ordering process through technology. This will drive a better experience and meet the customer’s need for convenience,” Randall says.
Applebee’s (www.applebees.com) was an early adopter of self-ordering solutions, adding Presto (www.presto.com) tablets in 2014. The fast-casual chain is now using the PrestoPrime EMV tablet, which lets customers self-order and pay at the table with the EMV and mobile payment technologies, including Apple Pay, Android Pay, Samsung Pay, Chip-and-PIN, Chip-and-Signature, PIN-Debit and mobile payments.
Jay Runnfeldt, a restaurant consultant with JCB Projects (www.jcbprojects.com), expects to see more fast-casual restaurants adding PATT in the near future. In addition to higher customer satisfaction, “it saves everyone time and leads to faster table turns,” he says.
One of his fast-casual clients with a large outdoor space recently added PATT. “If the server grabs a credit card and has to walk back inside to the terminal to swipe the card, it could be 2-15 minutes until the customer gets the card and receipt,” he says.
When it comes to technology and the customer experience, “it is still early days in a lot of places … It is always a challenge when a franchise is asked to put in money to execute these things,” says Randall.
Delivery By Drone
Alphabet’s Wing Aviation (https://x.company/projects/wing), which began as a Google X project, received Federal Aviation Administration approval as an airline, an important step that gives it the legal okay to begin delivery drops via drone. Wing plans to continue testing drones in Southwest Virginia, with the goal of launching a delivery trial later this year.
Connected Commercial Kitchen
Connected commercial kitchens — where grills, fryers and other equipment get data that will drive speed of service and order accuracy — are in beta testing now, says Panasonic (www.panasonic.com). Expect more processes to be automated with robotics.
This summer Apple (www.apple.com) is launching the Apple Card, a credit card. This could be a game changer for the payment industry, Panasonic pointed out, as Apple already has Apple Pay, and when it becomes its own bank, it will add customer purchase data to its data arsenal. The payments landscape will continue to be disrupted and forced to evolve by other big tech companies. Facebook (www.facebook.com) is planning to launch its own cryptocurrency this summer that will allow WhatsApp users in India to send money instantly, reported Bloomberg.
In the Philippines, McDonalds rolled out crypto-rewards for customers through it partnership with LoyalCoin, a blockchain-based customer loyalty rewards program, reported Cryptoslate. (And after acquiring personalization platform Dynamic Yield (www.dynamicyield.com) in March, McDonald’s deployed menu boards with AI at 700 U.S. restaurants.)
Voice ordering is on the horizon, sources interviewed by HT agree, and will see more adoption in restaurants within the next 2 to 4 years. ValyantAI (www.valyant.ai) is beta testing conversational AI with a Denver location of Good Times Burgers & Frozen Custard (www.goodtimesburgers.com).
According to HT’s 2019 Restaurant Technology Study, 37% of restaurants plan to add tableside ordering with the guest’s device this year. Through a tablet, placard or even their own device, customers could view the menu, customize orders, close out bills and self-pay, completing a loop of self service.
Chick-fil-A (www.chick-fil-a.com) has been testing tableside ordering at a handful of locations. A Kallpod (www.kallpod.com) device sits atop a dining table and provides the customer an opportunity to summon service staff directly through the push of one of three buttons – Order, Service or Manager. Service staff is immediately notified on a smart watch when a specific customer pushes a button.
Devin Deshotel, COO of two Chick-fil-A locations in Houston, started using Kallpod’s solution last year. “Implementing Kallpod’s technology into our locations has allowed us to add incremental revenue and to raise the bar even higher when it comes to our already outstanding customer service,” he said in a statement.
Before implementing Kallpod, Deshotel’s locations were averaging $30 to $45 per day from guests’ ordering a second time at the table. After three months, the locations were averaging between $200 to $350 dollars per day on these second orders.
At these Chick-fil-A locations, technology is empowering staff to deliver improved customer service. “We are never going to reduce the level of service our guests receive with technology,” said Deshotel. “In fact, that’s the opposite of what we are trying to do. We are making sure the customer has the best experience possible, and the server has a clear path to make this happen.”
SingleThread (www.singlethreadfarms.com/restaurant)) is among the fine-dining restaurants embracing technology to empower their staff to provide the best customer service. The Healdsburg, Calif., destination uses Slack (www.slack.com) as its communication platform.
“It’s been an indispensable tool since the beginning for us,” says chef and owner Kyle Connaughton. “Effective communication during service is critical to creating a really high-touch guest experience; Slack allows us to do that.”
Every employee has Slack set up on their mobile phone, with the service team accessing Slack through their Apple watches. The service team is messaging between themselves and the culinary team and relaying important information such as wine orders, last-minute notifications of dietary restrictions, and more.
Connaughton is aware how distracting technology can be, “so while we use tech to power what we do, it’s always out of guests’ view,” he adds.
Replacing manual processes, such as writing out order tickets, with technology can help improve the dining experience and save time for customers and staff, says Felix Torres, CTO at LMS, (www.lmsonline.com) a data consulting firm. “It doesn’t necessarily mean machine learning or artificial intelligence (AI). There’s a lot of small tech changes we can embrace to improve.”
Torres points to Princess Cruises (www.princess.com). The cruiseline was using a manual ticket system in its specialty dining restaurants before it launched Ocean Medallion, a quarter-sized IoT device that can be worn on a wristband, clip or stored in a pocket. Guests use their Medallions for cashless payment, a mobile key and more.
Delivering guest convenience is driving investments in interactive kiosks, making it the top investment among 67% of restaurants that identify as “digital customer innovators,” reports HT’s 2019 Restaurant Technology Study.
Restaurants globally are looking to automate experiences, and millennials are embracing kiosks, points out Zebra Technologies (www.zebra.com).
Eatsa (www.eatsa.com) reinvented the FOH experience when it debuted in San Francisco in 2015. Customers order solely via self-ordering kiosks or the mobile app and pick up their orders from personalized cubbies.
The QSR turned tech company started out “building a different kind of restaurant operations model that is very much tech forward, tech first so we could drive different angles in terms of experience, operations and take the next step,” explains Tim Young, co-founder and CTO.
McDonald’s (www.mcdonalds.com) has been adding self-ordering kiosks at a rapid-fire pace, implementing more than 17,000 worldwide. So far half of the 14,000 U.S. locations have been transformed into the quick-service restaurant’s “Experience of the Future” concept that includes self-ordering kiosks and digital menu boards. “…This is an aggressive pace with an ambitious agenda at a time when the U.S. market is experiencing intense competitive pressures,” President and CEO Steve Easterbrook said during a recent earnings call with analysts. Here in the U.S., franchisees plan to complete transformations by 2022.