Restaurant of the Future

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Restaurant of the Future

By Dorothy Creamer, Editor - 08/09/2016
The future is a moving target when it comes to technology and its applications, with plateaus punctuated with bursts of upward trajectory. For the restaurant industry, predicting the trends of tomorrow involves having the vision to foretell how technology that may already exist can be further leveraged to positively impact operations and the service experience. HT is doing just that and making bold predictions about what disruptive technologies will truly come to bear in foodservice in the near future — specifically 10 years out.

In many ways the future is here: we have self-driving cars, 3-D printed food made its debut at London-based Food Ink, and mobile payments continue to gain traction. These technologies are already making an impact and stand to alter the dining experience. “It’s important for restaurant operators to realize that the new consumer behavior and technology can fundamentally change their business models in ways they wouldn’t have imagined,” Guarav Pant, SVP Research & Principal Analyst, EKN Research, notes in HT’s 2016 Restaurant Technology Study. Pant advises operators to not fall for hype and instead focus on real value and pragmatic innovation.

From mobile going beyond being a game changer to being the game itself, to real-world applications for robotics, autonomous cars and social media as the point of sale, pragmatic innovation blended with tomorrow’s possibility is how next-gen restaurants will take shape. By examining emerging technology and analyzing how existing solutions are already having impact, HT has divined eight distinct predictions for the future of foodservice, offering a clearer picture of the restaurant industry as it will look in 2026.

Internet of Things: Today’s Trend, Tomorrow’s Table Stakes
As the cost of connectivity has declined and wireless technology has improved, businesses are looking to leverage networks for improving all phases of operations from customer-facing experience to back-of-house operations. Darren Tristano, president of Technomic (www.technomic.com), a consulting and research firm for the foodservice industry, sees IoT as becoming a must-have for restaurants.
The potential for Internet of Things (IoT) in the restaurant is far-reaching, with the ability to offer consumers a direct connection to the kitchen and Tristano projects the possibility of even permitting diners to be involved in food preparation itself. “Imagine allowing customers more say in the process — enabling them to send a message saying, ‘hey, my burger is already medium, take it off the grill!’” Tristano muses. An early indicator of diners wanting to be more involved with the entire food prep cycle can already be seen with Domino’s (www.dominos.com) Pizza Tracker which allows customers to monitor the progress of orders. The potential is there to give guests even more visibility into the preparation and delivery process.

A fully networked restaurant/consumer relationship can be leveraged to make service completely seamless. Cognizant (www.cognizant.com) envisions that geo-fences will identify when a customer is in the parking lot. It is a very real eventuality that customers will be able to enter orders into a car’s search appliance (such as Apple CarPlay), that would be transmitted into the kitchen just as the customer arrives at the restaurant.

Joe Tenczar, VP of IT/CIO, Sonny’s BBQ (www.sonnysbbq.com) sees autonomous cars as a true disruptor for the restaurant industry, with the potential to sync various technologies into the dashboard. “Linking autonomous cars to Yelp or some sort of CRM associated with that would drastically influence someone’s success in the restaurant industry,” Tenczar states. “For example, if my car knew I loved tacos and I was going to pass a high-rated Mexican restaurant around dinner time on my commute home — it might automatically ask me if I want to go there and maybe even make a reservation at restaurant. Personalization with the car is going to be explosive.”

The implications for IoT on the back-end are also heady, ranging from inventory management to improving production quality and speed. With constant connectivity to guests and data that can be gleaned from those connections, restaurants can and should use IoT as an opportunity to get smart about producing customized orders predictively. “Restaurant companies have generally been used to building something when it’s ordered,” Jayson Tipp, chief development officer and SVP, Papa Murphy’s (www.papamurphys.com) says. “IoT could allow us to be more analytical in terms of demand.”

IoT will further come into play with inventory management and smart kitchen equipment that provides proactive maintenance, helping to not only reduce breakdowns, but streamline labor necessary to maintain them as well. Cognizant imagines a fully networked world where equipment itself will be able to send out messages based on operational performance guidelines, enabling automatic work orders to be generated for support staff. On the inventory management side, Cognizant predicts connected restaurants using centralized inventory systems for all restaurants under one brand, enabling materials to move between stores based on demand, improving inventory management overall.
 
To truly harness the potential of a futuristic IoT strategy, operators must be prepared to invest in a high-bandwidth, always-on Internet connection. In order for that investment to realize return, restaurants should not ignore culling actionable insights from data available on connected devices. NCR (www.ncr.com) recommends restaurants consider hiring the services of a data scientist to perform analysis and make recommendations on a course of action based on accumulated data.

Brave Mobile World
If mobile is ubiquitous now, in ten years it will be even more omnipresent. Papa Murphy’s Tipp sees mobile opening up the consumer experience even more with greater focus on mobile notifications and connecting people via devices. He foresees the next step as connecting consumer-facing mobile strategies into the kitchen to drive even more productivity.

Goodcents Deli Fresh Subs (www.goodcentssubs.com), which recently launched its futuristic concept focusing on digital ordering, also turns to mobile for operational best practices. Scott Ford, president, sees this as the best way to communicate and resonate with the Millennial and Z generations, including employees. The company has developed an e-learning platform through Schoox (www.schoox.com) with an in-house developed app that works with all back-office systems. Furthermore, recognizing that workers are never without smartphones, the company has taken what could be a point of consternation and turned it into a business benefit. “We are incorporating the smartphone into our training,” Ford explains. “We have created short Buzzfeed-like videos that detail operational components. If an employee has forgotten a standard procedure, they can text a code and a link to a 30-second instructional video will be sent back to them.”

No discussion of mobile would be complete without mobile payments. Queried for the 2016 Restaurant Technology Study, 53% of operators reveal that mobile payments will be a top R&D project in 2016. Technomic ascertains that as mobile devices become even more affordable, it will be common for consumers to utilize them for all aspects of daily life, including reserving tables and paying for meals. The benefits of restaurants enabling mobile payments include the ability to track customer behavior and mine for data and trends. In addition, Tristano notes, “the convenience of mobile pay provides speed of service for the customer and order accuracy and less theft for the operator.” He foresees mobile devices becoming the preferred method for restaurant payment, reducing reliance on cash and credit cards. He goes as far to predict that brands that don’t enable new payment methods will struggle with younger consumers while operators who provide flexible and frictionless transactions will prosper.

Tenczar concurs, saying that mobile payments, mobile wallets and things that relieve consumers of the burden of credit cards will become a reality in the near future, perhaps even in as little as three, but more likely five to seven, years. “We will see things like tokenized clothing or jewelry — things that have a single-use token for payment. This would eliminate a lot of risk that merchants carry, but still allow card companies to get their fees,” he says.

The ability to eliminate the need for a server to initiate payment transactions will become more prevalent as the industry moves into the next decade. “There’s this strange point-in-time thinking because we made an assumption about the point of sale based on what it is today, that this device is going to be there,” Tipp notes. “The next logical step is independent payment services like Google Wallet, where I don’t have to enter any information, it’s all stored centrally and customers will have a pass key. At that point, think about, do I really need to go up to the counter or interact with someone? Those are things we need to flesh out.”

Automation Gains Steam
Streamlining service to create a frictionless experience will determine tech investments in the ensuing years. According to the 2016 Restaurant Technology Study, 87% of restaurants said that business efficiency will drive technology projects, and a 2016 Restaurant Trade Survey from American Express (www.americanexpress.com) found that 63% of restaurant owners would invest in technology if it made day-to-day operations more efficient. The study also reveals that cutting costs was a motivator, with 58% citing reducing overhead as a reason to make tech investments. Those aforementioned overhead costs could include labor wages, which Technomic prognosticates could be one reason for tremendous investment in automation in a very human-focused industry. “Automation will likely take on the role of streamlining ordering (iPads, kiosks, mobile devices), payment (Apple Pay), and maintenance, with smart devices that self-diagnose, maintain and report issues and cooking management that has started with robotic burger flippers,” Tristano notes.

In terms of technologies standing to alter the landscape most, Cognizant sees robotics significantly impacting both the kitchen and customer service in years ahead, but with human cooperation, likening the potential to the robotics currently being utilized in car manufacturing assembly lines. Cognizant expects that physical robots will come to augment or replace the human intervention once needed in certain  procedures. Software robotics will also come to be deployed to manage order processes and menu updates, maintaining that humans do the exception handling.

Tenczar believes robotics are at a point to take on construction of food for QSRs, but doesn’t see broad applications yet in restaurants. “I think there are use cases that work — such as robot bartenders who can make thousands of drinks and portion them perfectly — we’re capable of those things today,” he says, “but in most cases, in foodservice, customers want to see food being made fresh/before your eyes, unless resigned to getting something manufactured.”

Super-Personalization and Self-Ordering Shake up the POS
Fast casual restaurants will become increasingly self-service as many concepts offer options such as online ordering and kiosks. As diners crave greater ease of ordering with fewer touchpoints, advancements are already being seen through voice command services with the growth of applications like Amazon Echo and Siri.

Goodcents Subs has teamed with Nextep (www.nextepsystems.com) for a kiosk system that solves two problems: speeding up the ordering process while making the customer feel that they are recognized. The kiosks allow guests to pull up favorite orders and reorder in just a few clicks. Ford is already interested in getting to the next level with facial recognition. “Nextep is working on incorporating facial recognition into its platform, since all the kiosks already have a forward-facing camera,” Ford notes. “This would allow the kiosks to recognize who is standing there, present them with an order history, and allow them to reorder. To me, that’s something buzzworthy.” 
 
Facial recognition could also come to bear to help employees recognize customers, with the help of beacons and heads-up displays similar to those in cars. “It would be great if servers or hosts could recognize customers while looking them in the face, rather than at a POS screen,” Tipp says. “We probably won’t be there tomorrow, but it won’t take ten years to get there.”

NCR sees potential for biometrics to be tied to kiosks with the possibility of fingerprint readers to tie a customer profile to order history and loyalty programs. This could also have applications to make ordering and payment faster and more secure, however privacy concerns might require more time for this to truly come to pass.

Social Media as Point of Sale
Social media networks will expand their influence on where and how diners communicate with brands. Domino’s and Pizza Hut (www.pizzahut.com) both rolled out social ordering initiatives in 2016 — Domino’s by enabling users to tweet in orders and Pizza Hut with its Chatbot that allows conversational ordering through Twitter or Facebook. With diners spending a great deal of time on social channels, it’s anticipated that more restaurant companies will choose to engage customers through these platforms.

“While apps aren’t going away any time soon, the number of downloads for social and messaging apps is surpassing single-use apps,” Stacy Peterson, CIO, Wingstop (www.wingstop.com), notes. “At Wingstop, our strategy is to provide ordering capability in places where our customers are already spending their time.” To that end, Wingstop provides ordering capabilities both inside and outside its own branded channels, recently launching ordering on Facebook Messenger and Twitter. A guest can browse the menu and place an order at any restaurant nationwide, without ever leaving their social network, by simply messaging the word “order.” 

Location & Data to Make Restaurants Omniscient in Real-time
As restaurants compete in a crowded space, real-time data on customers’ whereabouts and preferences will become a major factor in winning market share. Goodcents’ Ford believes that with tech like geofencing and beacons, operators are on the edge of being able to do that. “We’ve partnered with Splickit (www.splickit.com) for our mobile app, online ordering and loyalty, and they are working on developing new and improved versions of location-based technology to allow us to find consumers that are in the area and provide offers that tip the scale in our favor when it’s time to make a dining decision.”

Papa Murphy’s uses Bridg (www.bridg.com), a software as a service platform, to compile a database that allows the company to ID unique customers and connect them back to an email or phone number. “This allows us to create segments to target specific customers, such as those who haven’t visited in 90 days, and send them an email to bring them back in,” Tipp says. “I see the potential to use this real-time customer data to recognize guests and their preferences and to push offers right at the time they might be choosing a place to eat.”

Sharing Economy Impacts Foodservice & Franchises
As standards and food consumption habits evolve, so too will the franchisor/franchisee relationship.  Cognizant theorizes that kitchens could become part of the sharing economy, pointing out that the substantial upfront investment needed to launch a franchise could be disrupted if an aggregator, along the lines of Uber, emerged for kitchens. Cognizant muses that an aggregator could focus on hyper-local preferences, offering select and specific menu items that are proven to sell well in a certain market and then bring in providers to prepare foods on these menus.

Changing Service Shifts Restaurant Floorplans
As restaurants shift service structures to comply with how customers are ordering, paying and dining, the physical layout of operations will change to accommodate. It is likely that the footprint of restaurants will become smaller as kitchen prep stations become more intelligent and interactive, and labor becomes more streamlined and efficient. Instead of focusing staff on ordering, as consumers use kiosks and mobile devices as the POS, staff will be able to be assigned to other duties with guest interaction — delivering food or providing more service-oriented experiences.

With the goal of order-ahead services to reduce wait times, it defeats the purpose by having customers arrive only to have to stand on line. “Customers elect ‘self-service’ speed and convenience in ordering, whether it be through online, apps or kiosk, and they expecting that same speed and convenience for the pick-up as well,” Peterson says. “In some cases, the industry has already seen concepts move to binning for self-service pick up. For Wingstop, we are redesigning our restaurants to have a queue dedicated to those that order ahead so they can skip the wait.”

As there is more dependence on technology, NCR suggests restaurants utilize an in-store “genius,” similar to the Apple store, to make recommendations based on customers’ preferences as well as ensure technology is running properly.

“Consumers want products the way they want them, so restaurants need to adjust to allow for quicker pickups, with things like express lines,” Tipp notes. “We’ve seen banks, airports and hotels all change layouts to accommodate self-service, so it’s definitely going to happen to restaurants.”