Why TGI Fridays Is All In on AI
Since its inception more than 50 years ago, TGI Fridays (https://www.tgifridays.com), as a brand, has prided itself on its authenticity — specifically “authentic American food served with genuine personal service.” Much has changed in service and guest expectations since that first — what many claim to be the first singles bar — location opened in New York City in 1965. Today the global franchise boasts more than 870 restaurants in more than 55 countries, has weathered the challenges inherent in the casual dining space, and is reaping the benefits of being — as its chief experience officer describes — a technology company that happens to serve beer and wings.
When Sherif Mityas joined TGI Fridays in April of 2016, it was as the CIO and chief strategy officer. By March of 2018 he transitioned to the role of chief experience officer, a progression that for Mityas seemed only natural.
“The conversation I had up front with my CEO was that you can’t think about strategy and growth for a company without thinking about technology,” Mityas says. “They have to go hand-in-hand. Extend that concept and you can’t think about the guest experience without thinking about technology.”
Mityas’ philosophy puts the guest experience first and foremost and goes so far as to say that every chief information officer and chief digital officer should become a CXO — putting experience in the job title.
“Organizations should not view technology as just an enabler, but rather as a driver of business growth,” Mityas says. “It’s not supporting marketing; it’s in the driver seat next to marketing. That’s what I brought to the table at Fridays — to think differently about who we are.”
In Here, It’s Always About the Guest
According to Mityas, everything at Fridays comes back to the guest. Despite the fact that diners are increasingly tethered to and dependent on digital devices, Mityas is cautious to not put in technology for the sake of having the latest technology. Rather he focuses on how technology will augment and assist in the company’s core business processes.
This is exactly how the brand considers its own digital transformation, which Mityas describes as ongoing.
“If you think you’re done growing, you’re in trouble,” he says. “Your competitors and the market are constantly evolving. There is no such thing as being done with the journey or digital transformation, you always have to ask what’s next.”
Mityas acknowledges he is passionate about guest-facing industries and is always looking for the best way to connect the dots between technology and marketing to make sure guests are getting the journey and experience they want. At TGI Fridays this required shocking the system a bit and convincing the rest of the leadership team to start thinking not as a casual dining restaurant, but rather as a technology company that happens to sell beer and wings.
“Technology is not the group that sits in the corner,” Mityas says. “IT is going to drive millions of dollars of revenue and drive how we engage people and how we market differently in the future.”
Measuring the direct impact of technology on the bottom line, Mityas can specifically call out that TGI Fridays has doubled its off-premise dining business since he joined the company. He stresses the importance for tech leaders to be able to measure the efficacy of technology rollouts.
“You have to bring facts to the table,” he says. “This will shine the light on not only the potential, but what you can actually achieve when you marry technology, marketing, strategy and operations to provide guests what they want and need.”
TGI Fridays’ Chief Experience Officer Sherif Mityas shares the three questions he and his tech team put to any component of the company’s digital transformation.
1. Is IT right for the guest?
If the answer is no, do not pass “go.” Mityas explains that for Fridays the first question he asks of any technology is whether or not it will make the guest experience better. For Mityas, any technology must offer convenience or make an experience more social in order for it to align with the Fridays brand.
2. Can we execute IT?
Mityas cautions operators to consider the operational viability of innovation. It is important to understand organizationally if you are ready and if you are able to do what the tech is enabling you to do.
“Some technology is amazing, but if you cannot execute it, it is meaningless — it becomes a paper weight,” he says. “Beyond corporate-level and guest-facing technology, any tools should make the lives of the managers and servers that are interacting with the technology better.”
3. Will IT create value?
Before embarking on a technology rollout, identify a path for measurable ROI. Return on investment and being able to measure the ROI of innovation is a top-of-mind consideration for Fridays. “If you can’t measure ROI, it doesn’t exist,” Mityas says. “We have to get past thinking something did well or that it’s the right thing to do to having real KPIs to measure.”
Artificial Intelligence, Real Insights
Artificial intelligence (AI) is everywhere, and businesses that ignore or underestimate the benefits do so at their peril. TGI Fridays has hinged its digital and technology transformation on the extended utilization of AI applications to increase guest engagement, improve internal operations and enhance the capabilities of restaurant team members.
Mityas acknowledges the brand started with “easy putts,” which included AI-supported bots that allowed online conversations with guests to be richer, leading to better engagement with potential diners.
“Guests would be talking to a machine, but it felt less like a machine,” Mityas notes.
Being able to leverage specific information about guest preferences has amazing potential for brands. Mityas notes that the power of AI lies in its ability to arm a brand with individuals’ preferences, but on a large scale. This hyper-relevance is what will drive loyalty and sales.
TGI Fridays started putting data into its AI tools — with partners like Amperity (https://amperity.com) and Conversable (http://conversable.com) — and found that when they were able to send a message to a person at a specific time of day with a very specific call to action — more than 70% of people would follow the request. For Mityas and his team, this was eye-opening and what caused him to profess, “We’re all in on AI.”
“Being able to be so personalized and knowing people so well allows us to be targeted in our messaging and it opened up a completely new way of marketing to guests,” Mityas states. “AI is the engine behind that. It allows us to take all that data and create the next best action. If you have four options, AI creates a fifth. By learning who your guests are, AI creates what it believes what is going to incite them to take action.”
1. Diverse backgrounds. “Different perspectives and experience makes
the team stronger.”
2. Allowing creativity. “We’ll set a direction for the team, but encourage debate and different points of view to see where they will go.”
3. Inspiring ingenuity. “We run quarterly ‘Shark Tanks’ that give five to six startups the chance to pitch to our team. It reminds the team to always ask, ‘What are you doing differently?’ and to constantly think, ‘What’s next?’”
Augmenting Experience and Having Real Operational Impact
The combination of technology and AI has empowered TGI Fridays to deliver extremely personalized activity at scale, and it has had operational impact as well. The use of AI as a guide for table configuration, staff scheduling and inventory management has allowed managers to make better decisions that has had a direct impact on KPIs. Mityas reveals that utilizing AI for restaurant managers and above-store leaders has increased store-level profitability by 5% and resulted in a 20% reduction in wait times while improving throughput by 10%. Other improvements achieved include: reducing overtime percentage by 20% and waste by more than 10%. A combination of these improvements led to an overall store profitability increase of 5% year-to-date, something Mityas contends will continue to improve as the AI increases its knowledge and impact on operations.
Mityas likens AI to a digital “angel on the shoulder” for team members that helps to alleviate pain points and “learns” how to operate stores in the most efficient manner. This is all while simultaneously delivering on bottom-line objectives. For TGI Fridays, given the investments made across these efforts, the financial results alone have returned a 7X ROI in the first year of utilizing AI, not to mention, all the additional benefits related to guest and team member loyalty and engagement.
“Enabling team members to better serve our guests through AI-suggested actions has increased guest satisfaction scores by 15% and reduced team member turnover by more than 20%,” Mityas reveals. “Our focus on this effort from the start was based upon achieving specific and measurable goals to ensure the investment was delivering an ROI across every key strategic metric for the brand.”
Historically, restaurants have not always been on the cutting edge of technology, Mityas says noting that it is easy to become stuck in a way of always doing things. That has changed in recent years as the competitive landscape has shifted and is driving technology investments. Seeing other brands invest and rollout innovative solutions at a rapid pace challenges him to keep moving.
“Companies understand the value now,” he says. “Investment will only happen when there is a business case that drives a return. Now that other brands are accomplishing this, it’s driving more investment and a greater focus across the industry.”
Adding to the competition in foodservice is the fact that competitors are no longer limited to restaurants — as Mityas says, “Anywhere someone can get a food or drink is competition.” This includes grocery stores that are offering more packaged food options and delivery. Mityas focuses on where he believes the TGI Fridays brand will always win and that is at the nexus of experience and technology — a fun, social environment. With the smart application of technology, Mityas sees potential to compete in areas that might not have been possible previously — such as solving for the “speed problem” during lunch with order-ahead and pay-ahead options.
The pace of change in both business offerings and consumer demands continues to inspire and push Mityas and his team to discover what is next. “If we’re not meeting and anticipating what customers want they’ll go somewhere else,” Mityas says. “That is not acceptable, but that is what is at stake for us. It’s not just about being competitive, but being in business.”
Mityas jokingly refers to TGI Fridays as a 50-year-old startup. The brand has 50 years of history and is not about to replace bartenders with kiosks, but Mityas firmly believes in adopting a startup mentality when it comes to technology.
“Technology doesn’t replace our people, but it makes everyone better,” he says. “Artificial intelligence and technology makes the connection better for both guests and team members.”
He sees this as the key to success — not being afraid to experiment and find use cases for new technologies. He believes that by finding ways for technology — and in many cases AI — to help those bartenders become superstars is the direction all companies across industries must go in the name of better guest experiences.