3 Ways The Restaurant Business Is Becoming a Tech Business
Digital transformations continue to convert businesses of all types into tech businesses. This evolution includes restaurants, of course, one of the oldest entrepreneurial industries in history.
Whether a restaurant operator immigrated from afar or is an American-born foodie with ownership aspirations, restaurants have always been a vital business vehicle for entrepreneurs. Restaurants share a common thread: create a valuable business by delighting customers with service and food. It’s no surprise that restaurants have long been considered a “people business.”
While people still matter, technology is gradually transforming restaurant enterprises into something more like tech companies that also serve food. Here are three critical technological and digital transformations that will continue to transform your restaurant into a restaurant tech business in 2020 and beyond:
Off-Premise Digital Ordering Technologies
Diners increasingly prefer to eat food off-premise, or outside the four walls of the restaurant. To provide that convenience, restaurants need to offer those ordering options.
Early on, restaurants rushed to participate in 3rd-party delivery (3PD) marketplaces. In doing so, these restaurants lost customers by not offering a direct digital ordering solution from their site. Meanwhile, customers turned to 3PD markets, which then captured their order data from digital delivery, takeout, and catering transactions, and remarketed back to them. It’s an eerily similar situation to the travel industry years prior.
The restaurant industry is arriving at the same strategic realization: to employ direct ordering capabilities from restaurant sites that serve their customers and capture customer data for the restaurant’s remarketing purposes — and not 3PD.
The explosive consumer appetite for digital ordering convenience continues to grow and doesn’t look to diminish any time soon. According to the 2019 State of the Industry Report, by the National Restaurant Association (NRA), restaurant industry sales will reach $863 billion in 2019, with off-premise orders to account for 60% of foodservice occasions. Only a fraction of those occasions is digital. Many industry insiders suggest that the consumer appetite for convenience via digital delivery, takeout, or catering is still in its early stages.
What to Expect
The digital ordering evolution will continue through years of mass adoption. This includes highly-evolving ordering innovations and integrations as well as tech provider consolidation. 3PD players like DoorDash and UberEats have already made significant acquisitions. Direct digital ordering providers like Restaurant Revolution Technologies expand digital ordering features. These technologies enable customers to order when, how, and where they want direct from restaurant sites.
With labor and minimum wage issues challenging the industry, restaurant enterprises continue to invest in operational technologies that automate internal tasks, reduce working hours for live labor, and enhance service. Self-serve kiosk ordering and table-top payment technologies support a more enabled “hands-on” process for the customer to manage; tasks generally handled by live team members. KDS (kitchen display systems) support a digitally streamlined order fulfillment process in the kitchen, reducing ticket times and errors for better food preparation and quality.
What to Expect
Front-of-house and back-of-house operational automation continue to evolve in countless ways. This evolution will continue to push POS systems, which might be most analogous to the “central nervous system” of the restaurant operation, to offer more integration options as newer operating systems and functions develop. According to the 2019 State of the Industry Report, by the NRA, some of “the highest-rated emerging technologies for consumers include service enhancing items like tablets at the table, self-service electronic kiosks, and wearable technology for restaurant servers.”
Marketing and Data Technologies
The discussion of data capture and ownership lies at the heart of working relationships between restaurant enterprises and 3PD. In this scenario, restaurant enterprises try to “win back” the customers they initially gave away to participate in 3PD marketplaces. Restaurant operators aiming to better serve customers by deploying off-premise ordering platforms to provide delivery, takeout, and catering options direct from the restaurant’s website and other channels can capture customer and order data. With this data, they can engage a variety of methods in remarketing to their customers.
The captured data isn’t solely the contact information of customers. Restaurant data like menu favorites, peak ordering times, best-performing upsell items are like gold nuggets for your operation. By feeding the data back to marketing campaigns and loyalty programs, restaurant enterprises will enhance marketing and ad campaign effectiveness to boost revenue through the acceleration of repeat visits and orders from loyal brand champions.
What to Expect
The adoption and usage of restaurant marketing analytic tools and digital marketing campaigns will continue to rise, especially considering the restaurant industry has mostly leveraged traditional media for ad campaigns that are extremely difficult to track. Data leveraged across digital campaigns are easier to follow, and results dictate where to spend the next ad dollar.
Restaurants continue to test technologies that remove more “people and labor” from tasks. These include drone and robot delivery, automated food preparation, and artificial intelligence. The digital transformation in the “people business” of restaurants is a restaurant tech business that also sells food.
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About the Author
Rich Earle is the Director of Marketing for Restaurant Revolution Technologies (Revolution), a SaaS digital ordering provider and off-premise partner for restaurants. Revolution partners with chain restaurant clients to grow their off-premise business by making their food more convenient for customers. Aside from working at Revolution, Rich enjoys traveling, live music, baseball, college basketball, and quality time with his son. Contact Rich and the Revolution team via the Revolution corporate website at www.rrtusa.com.
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