Technology impacts nearly every aspect of our lives. For restaurants in particular, the impact of how technology is changing the restaurant industry is only growing bigger. It is not only changing foodservice, it’s becoming integral to maintaining successful, profitable operations.
From the front counter to the kitchen, technology is everywhere in restaurants. Technology is not only changing foodservice, it’s becoming integral to maintaining successful, profitable operations.
From changing the way restaurants order inventory all the way to determining how customers first place their order, technology in restaurants is continuously evolving.
Today’s technology used in the restaurant business is growing at a breakneck pace. Restaurant owners are keeping their eyes on key trends from 2019 while preparing for emerging technology in 2020.
How do restaurants currently leverage technology?
All restaurants feel the pressure to meet the growing expectations from digital-savvy customers. An increasing number of today’s guests are fluent in online shopping, customized apps, and the convenience of fast delivery. This means restaurants are being held to the standards of quick, easy, and personalized service.
To meet these expectations, technology is used to create new digital solutions that make running a restaurant easier, more efficient, and more profitable. Restaurants have a number of different moving parts, from back of house to front of house, and marketing to accounting. All these areas can be streamlined with technology solutions.
For example, many restaurants are now leveraging a suite of integrated technological tools to optimize operations. Flexible restaurant management software, point of sale (POS) systems, and accounting systems that share a single database allow for continuous sync between operations, sales and labor, and bookkeeping. Restaurant owners and operators can use this full integration to access technology features from anywhere, even on mobile devices and apps.
Accounting, employee scheduling, inventory data, and AP transactions can now be leveraged from anywhere, allowing today’s tech-savvy restaurant owner to keep up with the modern customer.
How has technology historically impacted a restaurant’s bottom line?
Technology has changed the speed of the world. How has technology changed restaurants? For restaurants, simply having good food is no longer enough to keep a business afloat. As customers became more used to digital experiences, restaurants have tried to keep up with elevated expectations. Taking advantage of new innovations has been a key ingredient for success in the restaurant industry.
Restaurant technology has historically been used to benefit a restaurant’s bottom line in three main ways:
- To bring more business in the door or boost sales
- To indicate where waste (food or labor) can be avoided and costs can be optimized
- To streamline operations to save the business time and resources
An example of the third type is a technological innovation like Accounts Payable (AP) automation. AP automation includes streamlining the capturing and inputting of invoices, routing invoices through custom approval workflows, and allowing for automated payment methods. By streamlining the entire accounts payable process into a single platform, operators ensure accurate numbers and efficient, timely payments.
New technology used in the restaurant business usually requires some upfront investment. However, used wisely, technology in restaurants can drive growth and profitability.
How was technology used in 2019?
In 2019, technology in restaurants grew the fastest in two main areas: addressing the delivery trend and responding to increasing labor costs.
For instance, to address the continued growth in delivery, some restaurant owners are operating what are called “ghost restaurants.” These operations don’t have a public-facing storefront, but instead only have a kitchen that prepares orders placed online. With no front-of-house costs and a lower overhead, these establishments work off of delivery-based kitchen management systems.
To respond to rising labor costs, operators are using labor tracking technology and restaurant scheduling software to cut down on costs, while leveraging sales forecasts to optimize labor hours. Operators also looked to technological solutions like kitchen robotics for automation and efficiency. Whether smart, pre-programmed ovens or smart burger-making kiosks, industry leaders are exploring how they can automate kitchen tasks and reduce labor costs.
Some major brands unveiled other interesting restaurant and technology experiments in 2019.
What was introduced in 2019?
With the online delivery market growing, some brands are trying new avenues to get customers to order online. Voice ordering has become a growing area in retail, and the National Restaurant Association found that 31% of consumers are receptive to ordering from a restaurant via virtual assistant if it was available.
Chipotle rolled out a new voice ordering feature in 2019, allowing customers to use Amazon Alexa to reorder meals for delivery or pickup. This technology does have limitations, because of the difficulty of providing a full menu to customers. So while this technology may not fit restaurants looking for new business, for operations built on repeat customers, voice ordering allows existing customers to reorder quickly and easily.
What took off in 2019?
Artificial Intelligence (AI) technology has grown all over the business world, and it has started to revolutionize the restaurant industry as well. AI can help restaurants deliver on today’s customer expectations.
In 2019, McDonald’s acquired a machine-learning startup, and the company now uses AI in more than 1,000 drive-thru windows. The AI technology considers factors that can affect customer behavior, like time of day, the weather, and local events, and combines it with historical sales data and popular menu items. With this knowledge, the AI creates an optimized drive-thru menu item mix for display. This customized, data-driven menu experience is fueled by AI insight and data about that particular location.
Other brands are applying AI to customer relationships. Outback Steakhouse piloted a new “comprehensive computer vision solution,” using discreet cameras in the restaurant lobby and other areas. Analyzing the motions of guest and employee interactions with AI, the solution measured individual wait times, host availability, and customer bounce rates, comparing it with a forecasted guest experience score. This technology tool is using AI to analyze large amounts of data, in order to analyze guest interactions and increase service and operations standards.
What do the trends look like for 2020?
With the National Restaurant Association reporting that off-premise sales now make up 60% of all foodservice occasions, technology like self-service that can answer the demands of mobile customers is going to be an important trend in 2020. Restaurants are responding to this trend by investing in delivery operations, mobile and voice ordering, and self-service kiosks.
In 2019, Moe’s Southwest Grill announced plans to open all-digital, kiosk-only trial locations near college campuses in the first quarter of 2020. This move is responding to the increasing millennial dining preference for using technology to make ordering and payment easier. Research has shown that nearly 25% of customers have used a self-ordering kiosk at a restaurant within the past three months.
How can a restaurant leverage technological trends to impact growth?
Today’s customer is probably a digital native, already comfortable with a kiosk or chatbot. Restaurant owners now need to focus more on the customer experience, ensuring the restaurant experience is matching what customers are expecting.
In order to meet these standards, the best technology tool a restaurant owner can have at their fingertips is the right data. Big data can help restaurants decipher trends and leverage technology to grow their business. A lot of today’s technology provides numbers and figures, but what restaurateurs need most is actionable operational information.
To best leverage technology in restaurants, restaurant operators are also asking how to track the impact of all these different technologies. Before investing in restaurant technology, operators should ensure they can track and calculate the ROI of their investment. By tracking immediate and long-term growth, restaurant owners can make smart decisions about what technology is best for them in 2020 and beyond.
With today’s rapid pace of change of technology in restaurants, restaurant operators need to be on top of the latest developments and ready to face whatever comes next. No one knows for certain how technology is changing the restaurant industry, but those restaurants who aren’t continuously investigating will certainly be left in the dust.
Restaurant365 incorporates restaurant accounting software and restaurant operations software into an all-in-one, cloud-based platform. For a more in-depth review of restaurant technology to help you grow your restaurant business, read our e-book, Guide to Restaurant Technology to Scale for Growth.