The Most Popular Item on the Menu: Personalization

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The Most Popular Item on the Menu: Personalization

At the end of the day, meeting sales objectives relies on meeting customer needs

In a world full of changes, the familiarity of fast casual restaurants comforts buyers because they know exactly what to expect. The golden arches, a fun paper crown, a girl with red pigtails—they’re popular because they’re consistent. Consistency in the fast-causal space is still relevant today, but it’s taken on a new form as technology becomes integrated into day-to-day operations. Now, customers want consistency through personalized experiences.

Personalization is a top priority for consumers and heavily dictates whether they continue to buy from brands. Today, 91 percent of customers are more likely to shop with brands that recognize, remember, and provide them with relevant offers and recommendations. While tailored customer experiences are a must-have for consumers, there’s a disconnect between customer need and business execution. This stems from marketing challenges: 63 percent of marketing executives struggle to provide tailored experiences to customers. So, what’s the catch? How can businesses master the art of personalization to meet sales goals? Technology is a great place to start.

Customization with Self-Order Kiosks

There’s nothing better than ordering—and eating—a go-to meal at a restaurant. The icing on the cake—or the ketchup on the fries—is when customers get that meal quickly and easily. Self-order kiosks are the special sauce to making this a reality.

Self-order kiosks let customers order at their own pace. With more autonomous ordering practices, customers don’t feel rushed to quickly communicate their orders with front-of-house staff. This takes the pressure off customers, boosts customer experience, and typically results in larger orders.

Self-order kiosks use facial recognition software (for those who choose to opt-in) to remember customers’ past orders and immediately let them purchase those orders again. Integrated with payment software, these kiosks can also remember customers’ payment information to reduce touchpoints and time spent ordering.

Beyond uptime, remembering customer orders and preferences also has financial gains for consumers. Customer recognition lets restaurants implement rewards programs, which give customers perks, like a free meal or discount after a certain number of visits. Unique offers based on visiting patterns incentivize customers to continue to purchase from the same restaurants. For example, seven out of 10 Americans consider loyalty programs a leading factor in securing their continued patronage of their favorite brands.

Improving Drive Thru Experiences with Digital Signage

Like self-order kiosks, digital signage is a must-have for improving the customer experience. With digital signage software, staff can update digital menu boards in real time to alert customers of new offerings, items that are sold out, or special deals. So long are the days of frustrating chalk boards or “sold out” stickers. Plus, menus can automatically switch from breakfast to lunch to dinner, unlike static menu boards which need to be physically swapped out throughout the day, rain or shine.  

In quick service restaurants, keeping digital menu boards up to date is crucial and becomes even more important with drive-thrus. Customers in the drive thru rely on the accuracy of digital menu boards to make their purchasing decisions. However, something most can relate to is the frustration of pulling up to the order window only to be told an item of choice is sold out. This puts pressure on customers to quickly come up with new orders, with the added challenge of no longer being able to see the menu board. This can result in a poor customer experience, a lost revenue opportunity, and a missed chance at securing a repeat customer. With digital signage software, staff can update menu boards based on stock to ensure customers get their desired meal from pull up to pull away. It also lets teams spotlight new meals and deals that customers might not have known about, encouraging them to add on to their cart.

We’re also seeing the rising importance of digital menu boards as consumers demand information beyond just the price of an item. Many customers now make eating decisions based on information like calories, ingredients, and other nutritional considerations. Leaving customers guessing isn’t the answer. Whether health-conscious, allergic to or intolerant of certain ingredients, customers can more quickly and confidently order.

The Importance of Data Collection & Analytics

No matter the type of technology used in quick service restaurants, integrating data collection and analysis software is a must. For tools like self-order kiosks, data collection informs managers of top-selling products, typical meal sizes, and purchasing patterns. This helps determine which products are poised for upselling or what meals need to be promoted further. Software can also analyze purchasing patterns to decipher peak business hours and foot traffic. This helps managers develop employee schedules and be strategic with where and when they use personnel to minimize potential wait times and produce positive customer experiences.

At the end of the day, meeting sales objectives relies on meeting customer needs. By giving customers more personalized experiences through self-order kiosks, digital signage, and data analytics software, restaurants can easily boost yields to achieve financial demands, while meeting the needs of today’s consumers.

James (Jay) Burdette is the senior director of the Enterprise Process Innovation Center at Panasonic Connect North America. Panasonic Connect is a B2B company offering device hardware, software, and professional services for the connected enterprise. James has near 20 years of experience working within the QSR, TSR, fuel and convenience, and retail industries, leading customers to significant business growth. Jay is a forward-thinking business strategist who is motivated by solving unique customer challenges. He strives to foster a collaborative environment within his teams that leads to true partnership. In his spare time, Jay is an avid motorcycle rider and has a passion for Harley Davidsons, having taken numerous interstate and cross-country rides with his family and friends.

The American restaurant consumer: resilient yet selective

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The American restaurant consumer: resilient yet selective

Q3 earnings were mixed as the consumer became more bifurcated, and guidance remains a challenge.

Now that most public companies have reported Q3 results, we have a stronger pulse on the state of the restaurant consumer amid a continuously uncertain backdrop.

Or do we?

As we’ve been reporting for about a year now, the state of the consumer has been puzzling, even for the savviest economists. We started to see some trade down activity happening in the fourth quarter of last year, but it didn’t grow much beyond a ripple as industry sales and traffic remained steady and, in some instances, strong. That began to change in Q3, when pricing fatigue finally set in, leading to sharp traffic erosion. The restaurant industry hasn’t been the only sector impacted by relentlessly high inflation; retail has also taken a pretty big hit. That said, consumers have continued to show their willingness to spend at restaurants and elsewhere, and the U.S. gross domestic product grew at a staggering rate of nearly 5% last quarter.

This inconsistency was front and center during Q3 calls, in which BJ’s Restaurants CEO Greg Levin, noted, “We’re all trying to decipher different things.” Or, as Darden Restaurants’ CFO Raj Vennam summed up, “There’s been mixed data on the consumer.”

In other words, things remain puzzling, and guidance is, therefore, hard to come by. What we know now is consumers are more discretionary. Except for high income consumers in some – but not all – instances.

“Consumers continue to be resilient but more selective,” according to Darden CEO Rick Cardenas. Cardenas’ casual dining peer John Peyton, CEO of Dine Brands, also said guests have become more selective about where they choose to spend their money, adding that it’s a “price sensitive environment.” However, sales remain steady. In any normal environment, this wouldn’t add up so tidily, but this is no normal environment. Peyton believes that works in his company’s – and the industry’s – favor.

“We believe eating out continues to be an occasion guests value,” he said.

Notably, “eating out” doesn’t necessarily mean sit down service. Just take a look at the strong results from Chipotle or Starbucks, for instance.

“It’s clear we’re navigating the uncertain economies and markets around the world. Customer demand for us remains strong. We’re not really seeing any change in the sentiment in our customer base at this time,” Starbucks CEO Laxman Narasimhan said during his company’s call.

Not every report was so rosy, and we witnessed plenty of sales and transaction declines. Of course, this industry isn’t homogenous, and one explanation is an increasingly bifurcated consumer and how that impacts certain brands differently. As the Washington Post reported recently, wealthier consumers are still spending a lot, while lower-income consumers are pulling back. Starbucks and Chipotle tend to attract higher income consumers. Potbelly is another example, as CEO Bob Wright noted during his company’s positive report.

“Our consumer seems to be hanging in there really well. They’ve got the income to support it. The most revised numbers suggest the consumer in this $75,000-plus range has not been impacted by pricing we’ve taken to offset inflation,” Wright said.

Brinker CEO Kevin Hochman added that his company continues to see spending across all households, but higher income households have grown wallet share faster, which provides more insulation.

“Look at the brands that have reversed some of that discounting trend and went to more of an everyday low-price strategy or everyday value strategy. You typically see the guests move to more middle income and higher income and, over time, you become a little less reliant on deep discounting because those guests, that doesn’t matter as much to them,” he said. “To have a more affluent customer base is always going to give you a little bit more insurance than one that’s not and I think we’re seeing that a little bit now.”

Wendy’s corroborated the $75,000 income as being sort of that threshold of impact.

“If you look at the consumer, it’s really a tale of two sides. The over $75,000 consumer tends to be healthy. We continue to see traffic growth in that segment,” CEO Todd Penegor said. “Under $75,000 consumers are a little more stressed. As you go down the income core, it gets even more stressed. We are seeing some trade down from mid-scale casual and sit down into QSR, but also some trade out of the category from lower-income consumers out of QSR and into food at home.”

Food at home may also be where McDonald’s lower-income consumers have shifted. CEO Chris Kempczinski acknowledged some “traffic slippage” with this cohort. As this trade-in-and-out environment becomes more defined, food at home could very well become a bigger competitive target, especially if brands maintain elevated pricing levels. This could be a sweet spot for the fast casual segment, as Wingstop CEO Michael Skipworth noted.

“In Q3, we saw a slight uptick in frequency with that low-income consumer and at the same time, we’re seeing that higher-income consumer potentially pull back on dining out occasions and dining at home more,” he said. “And we’re winning on those occasions as well … We’re acquiring more new guests than ever.”

There are anomalies all over the place and an example here is with Dine Brands, whose core consumer at a $50,000 to $75,000 income level hasn’t made “any significant changes,” according to Peyton. That said, check management is happening, with appetizer and alcohol mix a bit lower than in previous quarters, as reported by several casual dining chains.

What does any of this mean? That we’ll continue to scratch our heads at the unusual trends manifesting from a consumer set changed by a once-in-a-lifetime global health crisis, and that guidance will continue to be very hard to come by.

It’s worth noting that with all of these attempts to decipher the undecipherable, the past two quarters of earnings have spotlighted another theme – “normalization.” Things are normalizing after an unprecedented three years of shutdowns, labor shortages, supply chain pressures, inflation, etc. As such normalization applies to Q3, that means slower-than-usual seasonality because of back to school and other factors. This means, despite all of the uncertainty, Q4 could provide more reasons for optimism, and we may already be seeing that. Consider Bloomin’ Brands, which experienced same-store sales and transaction declines in Q3. CEO David Deno attributed his company’s softness in September to seasonality and remains optimistic about normalized seasonality coming into play in Q4.

“We feel good about November and December,” he said. “We think the consumer is in a decent spot.”

Square Q3 Restaurant Industry Report: Post-Pandemic Dining Traffic Stabilizes in American Downtowns

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Thanksgiving Meal Calculator gives consumers key data for holiday dinner decisions
New insights shed light on downtown recovery and restaurant worker wages

  • The price of a restaurant Thanksgiving: Estimated per-person cost of a Thanksgiving meal prepared away from home (Graphic: Business Wire)

  • The return-to-work rate in downtowns is starting to stabilize, Square data shows (Graphic: Business Wire)

  • Downtown recoveries: Which downtowns have seen the strongest recoveries in activity in their bars, cafes, and restaurants? (Graphic: Business Wire)
  • Buyer subscriptions power recurring revenue for restaurants (Graphic: Business Wire)

OAKLAND, Calif.–(BUSINESS WIRE)–Today, Square released the latest edition of its quarterly Restaurant Industry Report, which uses data across Square’s food and beverage sellers to examine dining trends and shifts in both consumer spending and restaurant wages.

This Thanksgiving, consider ordering out

As restaurants continue expanding their offerings to include meal kits, branded merchandise, and more, some eateries are now offering prix fixe Thanksgiving meals to bring consumers the luxury of choice and convenience.

Hosting and cooking Thanksgiving can be quite the feat. As consumers begin planning for their Thanksgiving dinners, Square has created a Thanksgiving Meal calculator that enables consumers to estimate the cost of a take-out Thanksgiving meal from local restaurants. Nationwide, a hearty meal would cost $34 per person on average.

Dining out plateaus post-pandemic in America’s downtowns, but some cities thrive

As many consumers continue working from home at least part time, demand at restaurants in downtown areas is stabilizing. Square analyzed the hourly share of card-present transactions at food and drink establishments in the United States from 2019 through September 2023. Compared to January 2019, downtown neighborhoods in American cities appear to have flatlined at roughly 72% of their pre-pandemic activity as of the end of September 2023.

While dining and going out has not fully returned to pre-pandemic levels across all cities, a few downtowns nationwide are thriving. When looking at the top 15 metropolitan areas in the country, Detroit has seen major growth in food and beverage transactions with a 75% increase since 2019, followed by Los Angeles and Miami (increasing 18% and 17%, respectively). Other cities that are at or nearly back to 2019 levels of dining activity include Boston (up 2%) and Phoenix (down 8%).

“While dining trends are normalizing, restaurants in cities that are experiencing spikes or slumps can take advantage of technology to help handle increased orders or drive more traffic,” said Ming-Tai Huh, General Manager of Square for Restaurants. “For restaurants that fill up at lunchtime or right after work, consider using handhelds for line-busting or an easy-to-use KDS to get orders out faster, and for those that are seeing a slow-down, lean into automated marketing tools to attract the crowds.”

To continue bringing in guests and create repeat customers, restaurants can harness marketing and loyalty tools. With Square Marketing, restaurants can easily promote new menu items, events, or deals, and they can also take advantage of automated campaigns to welcome new customers, bring back lapsed customers, send birthday promotions, and more. With Square Loyalty, restaurants can drive repeat guests through fully integrated and easy-to-enroll loyalty programs that provide operators with real-time visibility into customer activity and sales impact.

Restaurant wages are up, but their growth is slowing

Last month, Square introduced the Square Payroll Index, a new economic indicator that measures compensation of service workers in the food and drink and retail sectors in the United States using data from Square Payroll. With this tool, you can see how base wages and total earnings (including tips and overtime) have changed since 2017, and business owners can better understand if the wages they offer are competitive in their market.

Amid the pandemic, restaurants faced major labor shortages – and in turn, had to quickly raise their base wages to attract the workers they needed to keep their businesses running. Wage growth for restaurant workers peaked in March 2022 at 8.52% when workers were making, on average, $12.80 per hour in base wages and $16.42 per hour in overall earnings.

A year and a half later, though, wage growth has slowed – while front- and back-of-house staff are making an average of $13.80 per hour in base wages and $17.67 per hour overall, wages are now growing at 4.59% and overall earnings at 5.02%.

Despite wage growth slowing for restaurant workers nationwide, some metropolitan areas are seeing above-average earnings growth – Cincinnati, Las Vegas, and Jacksonville saw year-over-year growth of 8.53%, 7.66%, and 6.46%, respectively, as of October 2023.

Restaurants lean into subscriptions for recurring revenue

Over the past few years, restaurateurs have faced challenges from inflation to economic uncertainty, and they are now finding increasingly innovative ways to adapt and strengthen their businesses through additional revenue streams. One way food and beverage sellers have diversified their offerings is through subscriptions for memberships, such as a monthly wine club or a quarterly shipment of fresh jams and sauces.

As of August 1, 2023, Square observed 54% growth YoY in food and drink sellers with active buyer subscriptions. What’s more, 57% of the subscriptions that consumers purchased from food and drink sellers were still active after 6 months, according to a cohort analysis of Square sellers using Subscriptions.

Using technology like Square Subscriptions, sellers are able to engage and bring back customers while also automating recurring payments. With a clear consumer appetite for these sorts of offerings, food and beverage businesses are able to easily take advantage of this reliable revenue stream.

About Square

Square makes commerce and financial services easy and accessible with its integrated ecosystem of commerce solutions. Square offers purpose-built software to run complex restaurant, retail, and professional services operations, versatile e-commerce tools, embedded financial services and banking products, buy now, pay later functionality through Afterpay, staff management and payroll capabilities, and much more – all of which work together to save sellers time and effort. Millions of sellers across the globe trust Square to power their business and help them thrive in the economy. For more information, visit www.squareup.com.

$1 million earmarked to support Black-owned food businesses in the U.S

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$1 million earmarked to support Black-owned food businesses in the U.S

In partnership with The LEE Initiative, a nonprofit organization that creates and implements programs to address diversity and equality issues in the restaurant industry, along with Southern Restaurants for Racial Justice (SRRJ), a coalition of bakers, chefs, manufacturers, and restaurateurs that raises funds for Black communities in the South, Heinz recently announced the start of its Black Kitchen Initiative.

The renowned food brand, which has been in business for more than 150 years, recognizes the critical way that Black-owned food companies in America continually shape the nation’s culinary culture.

Megan Lang, director of Brand Communications at Heinz, said in a press release:

The Heinz Black Kitchen Initiative aims to celebrate and preserve the legacy of Black food culture by helping to break down barriers that keep Black voices and cooking out of America’s culinary space.

ADDITIONAL RESOURCES

The program celebrates the additional investment of $1 million in grants to Black food business entrepreneurs across the country, bringing the brand’s total contribution to $3 million over the past three years.

The grants seek to preserve and enhance the legacy of Black-owned food businesses by providing much-needed financial assistance.

“We’re proud to continue our partnership with The LEE Initiative and SRRJ. We’ve heard from past recipients just how impactful the grants have been in supporting their businesses across the country, and we are thrilled to provide another $1 million in grants in 2023,” added Lang.

FOSTERING BUSINESS SUCCESS

Highlighting how in 2023, Black restaurants, food spaces and chefs continue to face serious financial obstacles and inequity in access to capital, Heinz Black Kitchen Initiative grants help to foster long-term business success.

The association revealed the results of a recent report highlighting how 37% of African American small business owners had difficulty accessing new capital and financing, 14 percentage points higher than their non-African American peers.

“Through our partnership with Heinz and SRRJ, we’re elated to have the chance to uplift so many talented business owners across the country and to empower diverse entrepreneurs in the hospitality space,” noted Lindsey Ofcacek, co-founder and executive director of The LEE Initiative.

Report: Plant-Based Stuck in Neutral While Bowls are Accelerating

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Report: Plant-Based Stuck in Neutral While Bowls are Accelerating

Today, Brandwatch published what it calls its latest “temperature check” of global food and beverage trends. The verdict: restaurant items in bowls are red-hot and rising. The plant-based segment, meanwhile, has cooled somewhat.

The report monitored 165 million global, public online conversations over the past year to note the latest F&B trends. Brandwatch took note of consumer opinions on topics like grocery delivery, the plant-based category, and consumer sentiment regarding restaurants.

“It’s interesting to see that the changes consumers were forced to make during the [COVID-19] pandemic still influence consumer behavior. For example, more consumers are now comfortable eating alone in restaurants,” Brandwatch researcher Michaela Vogl told The Food Institute.

Assessing the Plant-Based Space

Plant-based hype appears to be slowing. Online conversations regarding plant-based foods were down 7% over the past year, Brandwatch found.

Conversations about the plant-based segment, however, are more positive than negative. The report revealed that 62% of all sentiment-categorized mentions were positive, while 38% were negative.

Alt-meat is the most discussed topic in plant-based online conversations, the report revealed, followed by pizza and chocolate.

The topics that most concern consumers in conversations about plant-based protein are taste, ethics, and price, Brandwatch wrote. Interest in plant-based chocolate remains strong, with online conversations up 64 percent, the report noted, adding that the global vegan chocolate market is expected to grow from $575 million in 2022 to $1.2 billion in 2028.

Consumers are speaking most positively about plant-based milk options lately, Vogl said, noting: “Many of the headlines mention the availability of plant-based milk at coffee shops and restaurants. This is often highlighted as a positive feature or a must-have for customers. There are references to different types of non-dairy milk alternatives, including almond milk, oat milk, coconut milk, and soy milk.

The Food Institute Podcast · FI Fast Break News – July 12, 2022

“The plant-based food industry still has room to grow,” the Brandwatch researcher added. “A great indicator is that while the online conversation has fizzled out, the overall sentiment of plant-based discussions remains positive. As long as companies pay attention to and adapt to consumer preferences, behaviors and trends, growth is achievable.”

Bowled Over

As many fast-casual menus suggest these days, bowls have taken the restaurant world by storm. So much so, in fact, that Brandwatch declared bowls “the reigning champion of food trends.”

The appeal of bowls lies in their versatility and the fact they’re not limited to any cuisine or daypart. The trend has captivated consumers judging by the 800,000 mentions of the topic over the past year. Chains like Rush Bowls and Playa Bowls have seized upon the movement, selling bowls that feature superfoods like acai berries, as noted by QSR Magazine.

Coffee Fading Among Gen Zers

Coffee is the most talked about non-alcoholic beverage among baby boomers and Gen X, Brandwatch found, but it’s also the least-mentioned beverage among Gen Z.

One of the report’s most interesting findings, Vogl said, “is how different Gen Z drinking behaviors are compared to other generations. They don’t like traditional morning coffee; they want iced coffee from a coffee shop. They prefer energy drinks to stay energized, and they’re more conscious about drinking alcohol.” The researcher added:

“[Gen Zers’] consumer preferences are very different, and it will be interesting to see what trends they set in the coming years.”

Brandwatch’s report research also noted the following observations:

  • Mentions of dining-out fell 33% year over year in the 12 months prior to June
  • There has been a surge of conversations about high-protein products (+32% YoY)
  • Conversations about online grocery delivery were down 4%
  • The top food influencer on TikTok is Lookcatchu (edging out Notorious Foodie and Gordon Ramsay), while Betul Tunc is the top food influencer on Instagram

A growing number of US states are working to loosen child labor laws so your next bartender could be an underage teenager

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A growing number of US states are working to loosen child labor laws so your next bartender could be an underage teenager
  • More states are joining the trend of letting minors legally serve alcohol and bartend.
  • In April, Iowa’s senate voted to pass a bill that would allow teenagers to serve alcohol.
  • Legislators in Wisconsin are pushing to lower the alcohol service age from 18 to 14 years old.

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Bars in various states across the country may be staffed by high schoolers as more lawmakers and businesses push to lower the legal age to serve alcohol and bartend.

There are at least nine states — including Iowa, Michigan, Ohio, Kentucky, West Virginia, New Mexico, Alabama, Wisconsin, and Idaho — that have enacted or introduced laws that would allow minors ages 14 to 17 to serve alcohol, according to a report from Economic Policy Institute.

The trend has been gaining traction since 2021 as businesses and lawmakers seek solutions to an ongoing labor shortage. In April, Iowa’s Republican-led state senate voted 32-17 to pass a bill rolling back child labor laws in the state. The bill would allow teens to work until 9:00 p.m. during the school year and until 11:00 p.m. over the summer and serve alcohol.

The restaurant industry is backing legislators in their efforts to loosen child labor laws, according to the left-leaning Economic Policy Institute. The National Restaurant Association — representing over 100 restaurant corporations — have reportedly lobbied support for the growing pattern. However, there are risks to putting minors around alcohol, analysts say.

“Laws that lower the alcohol service age will subject more young people, at younger ages, to potentially dangerous working conditions at low wages — all in service of employers’ pursuit of cheap labor,” Nina Mast, an analyst at the Economic Policy Institute, said in the report.

As businesses struggle to hire and keep employees, fast food franchises and factories have faced backlash for unlawful labor practices involving children. In February, Pennsylvania McDonald’s locations were accused of breaking child labor laws after seven restaurants were found to have 154 minors employed at inappropriate times, per the US Department of Labor.

Earlier this year, sanitation company Packers Sanitation Services Inc. was fined $1.5 million in penalties for employing at least 102 children ages 13 to 17 in “hazardous conditions,” according to the DOL.

An Insightful Guide On Investing In Restaurant Technology

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An Insightful Guide On Investing In Restaurant Technology

In the age of digitization, the world has witnessed technology and innovation reshape numerous industries, with the restaurant industry standing out as a prime example. The traditional food and beverage establishments that have thrived in recent times have invested in restaurant technology or they faced the peril of being left behind.

This article delves into the intersection of investing in restaurant technology, providing an insightful guide on how to invest in a restaurant that effectively leverages technology for growth and efficiency.

Checkout The Insightful Guide on Investing in Restaurant Technology

The Present: Understanding Restaurant Technologies

Today’s restaurant technology landscape has been molded by rapid development and innovation.

Through digitization, restaurant operations – from ordering and reservations to supply chain management and customer relationship management – can now be streamlined for optimal efficiency.

Restaurant_Technology_-_Applova

During the global pandemic and amidst labor shortages, those restaurants that invested in transformative restaurant technologies were the ones that flourished.

With the investment in restaurant technology, restaurant owners were able to ensure customer satisfaction by meeting customers where they were comfortable – be it online, curbside, or through self service kiosk technology, thus maintaining service standards while prioritizing safety.

Moreover, the vast digital intelligence and data analytics gathered through these technologies enable more personalized and enhanced customer service.

Investing in the Restaurant Industry: A Technological Perspective

The once technology-averse restaurant industry is now a hotbed of innovative startups. With offerings from robot chefs to cloud-based architectures, investments in restaurant technology can yield substantial returns.

Online_Ordering_Systems_-_Applova

Investing in a restaurant startup that has a technological edge could give you an advantage in an intensely competitive industry.

During the global pandemic and amidst labor shortages, those restaurants that invested in transformative restaurant technologies were the ones that flourished.

These startups use technology to scale, improve their bottom line, and provide a better customer experience – factors that hold appeal to potential investors. Ghost kitchens, which operate exclusively via mobile and online ordering with no physical storefront, are perfect examples of this new tech-forward restaurant archetype.

Must Read : The Applova Smart Kiosk – Powered by AI

The Future: What Lies Ahead for Restaurant Technology?

Looking into the future of restaurant technology, we see a clear potential for further transformation. Expectations suggest that technologies such as AI and Machine Learning, which are already making significant impact, will cause even more disruptions.

For example, AI and Machine Learning power predictive analytics. These technologies are likely to become more sophisticated, improving their ability to accurately forecast and optimize resources.

Must Read : More than Just Numbers: Five Ways Restaurant Analytics can Help You Make Better DecisionsMoreover, restaurant operations are set to become even more digitized. Blockchain technology could be used for traceability of food sources, providing transparency and boosting customer confidence.

Virtual Reality (VR) and Augmented Reality (AR) can be employed to provide immersive menu experiences for customers.

Why Should You Invest in a Restaurant?

Restaurant_using_Technology_-_Applova

Given the rate of technological advancement, investing in a restaurant, particularly one that harnesses technology, can be a lucrative move. Technology increases efficiency, decreases operational costs, improves customer satisfaction, and ultimately, increases profitability.

The potential for technological innovation in the restaurant industry is far from exhausted. As technologies continue to evolve, there will be new opportunities for restaurants to differentiate themselves, improve service, and expand their customer base, which in turn, provides promising prospects for investors.

In conclusion, investing in a technologically adept restaurant could offer a high return on investment. This unique blend of food service and technology bridges the gap between traditional hospitality and the digital age. As always, thorough research and understanding of the business are key to success in this exciting, technology-driven investment landscape.

Click to Revolutionize Your Restaurant’s Technology With Applova

As Jobs Disappear, Could Restaurants Become a Battleground For Pushback Against AI & Automation?

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As Jobs Disappear, Could Restaurants Become a Battleground For Pushback Against AI & Automation?

Last month, after 29 months straight of job gains, the number of total available restaurant jobs dropped. It wasn’t a huge dip – 800 jobs – but compared to the previous month’s gain of 24 thousand and monthly gains as high as 81 thousand at the beginning of the year, the dip was somewhat surprising, especially as restaurant sales have slowly but surely inched upwards throughout the year.

Could this be a temporary setback? Perhaps, but there’s also a possibility that it’s an early indicator of a long-term, potentially irreversible decline in the restaurant industry’s job market as emerging technologies come into play.

And by new technologies, I primarily mean automation and artificial intelligence. All one has to do is scan the headlines for the past 12 months to find that the restaurant industry has caught automation fever. Big chains ranging from Chipotle to Sweetgreen to McDonald’s are experimenting with ways to automate their restaurants.

And then there’s AI. Last month Wendy’s announced a new partnership with Google in which they are piloting a new generative AI solution called Wendy’s Fresh AI in a drive-thru in Columbus, Ohio. The company said this is the first of what could potentially be many locations that use the technology. Mcdonald’s has also been trialing AI technology, which its execs believe, in some ways, is better at handling customer interactions than humans.

“Humans sometimes forget to greet people, they forget, they make mistakes, they don’t hear as well,” Lucy Brady, McDonald’s chief digital customer engagement officer, told CNN. “A machine can actually have a consistent greeting and remain calm under pressure.”

This wave of new tech goes beyond robotic arms and simulated voices taking orders at the drive-thru. There’s been a recent surge – accelerated during the pandemic – in digital kiosks, mobile ordering apps, and QR code ordering at tables. These have resulted in an increased number of digital touchpoints designed to speed up the process and, to some extent, reduce reliance on human intervention.

It’s hard to fault the operators. A significant number of restaurant employees permanently exited the industry during the pandemic, and since then, operators have struggled to fill vacant positions. Despite offering higher wages and improved benefits, many open positions remain unfilled due to a lack of interest. If employees are hard to find, why not let technology take over?

Which brings us back to how we humans will be impacted by all this new technology. Workers are increasingly tasked with working alongside all this new tech, transforming job descriptions into something that can sound like working an IT help desk. Others find that technology is increasingly eating away at opportunities at the human connection aspect of the job they enjoy.

“Those points of connection get lost in mobile ordering,” said one former Starbucks barista. “So, it’s just like, ‘Here’s your order, bye.”

Then there’s the threat of job extinction as automation and AI take hold. While no big chains have deployed robotics or AI so widely that they’ve eliminated key positions in the front or back of house, it’s only a matter of time before early pilots become the primary engine of production. Sweetgreen has essentially proclaimed its new bowl-making robot is the future, and both Wendy’s and McDonald’s have hinted at broader applications of automation and AI.

As we teeter on the precipice of an automated and AI-powered restaurant industry, are we beginning to see signals of pushback stemming from job loss fears? There are subtle signs. When Chili’s showed off their trial of the Bear Robotics server in a video on Facebook last year, some commentators pushed back. “Quit trying to erase people!” wrote one. Another commented, “Another reason why I will never set foot inside of a Chili’s. You cannot replace a human in the hospitality industry.” Others are penning editorials saying that while operators may benefit from automation, workers and customers lose.

In certain instances, workers displaced by new technology have begun to retaliate. As detailed in our interview with restaurant operator Andrew Simmons, he struggled when a former employee who resisted the deployment of automation at his San Diego area pizza restaurant started making negative comments on social media and called in complaints to the local health department.

Are these initial pushbacks a sign of a larger anti-technology movement? That remains to be seen, but ignoring these early indications of a neo-luddite movement would be ill-advised, according to one professor.

“The various signals currently circulating in public discourse are not immediately obvious, nor are they specifically anti-technology or anti-progress,” wrote Sunil Manghani, a Professor of Theory, Practice & Critique at the University of Southampton and Fellow of the Alan Turing Institute for AI. “Yet, arguably, the signals are of a nascent sense of ‘protest’. Just as Hobsbawm reminds us, the Luddites were not opposed to machines in principle, but rather to those machines that were threatening their livelihoods and communities, we will likely start to see opposition not to software in principle, but various instances of software; opposition, then, to how and who deploy new technologies in the particular.”

Today resistance may manifest in an employee fighting back here or there or the occasional social media pushback against new automation. However, these intermittent signals could become the norm, especially if job numbers continue to decrease while more restaurants deploy robots and AI. Some studies say that over 80% of restaurant jobs could be handled by robotics, and some experts see millions of jobs being replaced through AI or automation within a decade.

And, of course, it’s not just restaurant jobs. Other lines of work, from creative to industrial, are threatened by new technology. And as more and more workers see unionization as the front line to a fight for more equitable pay, it’s also apparent – as evidenced by the Writers and Actors guild strike – the biggest fear about making a living in the future is whether or not employees will be replaced by technology.

Still, the restaurant industry, perhaps more than any other, is ripe for an automation and AI takeover, which is why I think that it could become the central battleground for the pushback in the form of an automation neo-luddite movement. Restaurant chains are the second biggest employer in the US, and two – Mcdonald’s and Yum Brands – are two of the top three employers in the country. Although Andrew Yang’s campaign warning of societal destabilization due to robotics and AI didn’t gain much traction in 2020, there’s a good chance he was ahead of his time, and we may see future politicians campaigning on an anti-automation platform with restaurants as one of the primary areas of focus.

Readers of The Spoon know we’re not anti-technology around here. In fact, we’ve covered just about every food robot out there and will continue to do so. But as we see more signals about potential pushback against the rise of automation and AI, I think it would be wise for the restaurant industry to begin to get ahead of this growing issue and think about how to balance new (and often necessary) technology with taking care of their employees.

Otherwise, they risk losing control of the narrative as more people organize to resist the impending AI and robot invasion.

Come hear experts talk about the impact of automation and AI on food jobs at The Food AI Summit on October 25th.

Tackling Rising Food and Labor Costs with Tech

Restaurant Tech Editors
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Tackling Rising Food and Labor Costs with Tech

The National Restaurant Association revealed food and labor costs are the two most significant line items for a restaurant, together costing about 66 cents of every dollar in sales. Separately, small business network Alignable found 72 percent of the restaurants surveyed fear inflation could force closure within six months. 

While there’s no solving the food inflation equation and labor crunch, technology can help restaurant operators understand and adjust costs to better manage operations despite a difficult economy.

Reduce food waste and cost with robust inventory management 

The restaurant industry produced approximately 33 pounds of food waste per $1,000 of a restaurant’s revenue—and wasted food means wasted money.

Consider automating your inventory management processes to better track when stock is low and how much needs to be ordered. If you have versions of spreadsheets (or an overly complicated notebook system), think again. Food management systems, or inventory management systems, allow quick access to the cost of goods sold by tracking and managing sales trends and food costs for restaurants. 

Additionally, make sure your restaurant is enforcing a first-in, first-out (FIFO) model. Doing so ensures food stored the longest will be used before ingredients from a new shipment, cutting down on unused, expired or spoiled items.

The right technology can help measure, control, and reduce food expenses by understanding top costs and highlighting key variances to pinpoint areas of unnecessary spending. This helps restaurant managers make better-informed decisions around food ordering and waste.

Improve employee efficiency with kitchen and workforce management tech 

Short-staffed in the kitchen? Keep up with customer demand and maintain speedy service with a robust kitchen production system that helps back-of-house operations run smoother than ever. Look for technology that provides advanced routing rules to boost productivity and efficiency—this channels orders to the right stations and delivers a real-time view of problem areas in production and delivery.

Labor management tools can also help restaurants like yours better staff each shift. Using advanced analytics to compare scheduled versus actual labor to understand staffing requirements, management can better forecast needs and comply with labor standards.

Lowering overall operational costs is the smartest, most effective way to fight inflation. It’s all about doing more with less while working smarter, not harder.

Marry data and marketing to drive sales 

Savvy restaurants optimize marketing campaigns using experiential and transactional data fueled by their POS system. These insights allow restaurants to focus marketing efforts and tight budgets on high-value customers—increasing the average check size by recommending additional menu items repeat customers love. 

There is also a shift in rethinking loyalty programs to move past the punch card. Digital loyalty programs can provide valuable information like favorite dishes, the times and days customers frequent an establishment and whether they dine in or use pickup or delivery. This data and more enable operators to personalize orders and marketing efforts, which is crucial to success since 58 percent of consumers choose a brand based on personalization.

Today’s diners want connections built on hyper-personalized experiences. The more consumers associate a brand with meaningful interactions and personal treatment, the more likely they are to return frequently.

Drive success with modern restaurant technology

Legacy technology does not drive success in an inflationary and labor-constrained economy. This is likely one of the reasons the National Restaurant Association’s 2023 State of the Restaurant Industry Report found more than 4 in 10 operators plan to invest in equipment or technology to increase productivity in the front and back of house, streamline operations, and trim food and labor costs this year.

By combining data and marketing to personalize orders and interactions, restaurant operators can be well on the way to tackling and taming the increased food and labor cost beast and finding future success.

Jessica Bryant is vice president of Marketing for NCR Commerce. She leads marketing direction for NCR’s digital-first restaurant technology portfolio, including building a deep understanding of customers’ changing needs and requirements. 

An Insider’s Advice About Restaurant Insurance: Six Ways to Reduce Your Costs

Restaurant Tech Editors
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An Insider’s Advice About Restaurant Insurance: Six Ways to Reduce Your Costs

Restaurant insurance is complicated. Just as owners have to play many roles in management, marketing, and menus, their insurance has to protect their finances, patrons, and employees. And who has the time to read a 100-page insurance policy?

According to a recent survey by Wakefield Research, 90 percent of business respondents said they lack confidence that their business is adequately insured. Half the respondents (53 percent) said the most significant barrier to obtaining insurance was understanding what coverage they needed to protect their business.

Here are some insider tips to help avoid overpaying for coverage, prevent claims that drive up premiums, and make sure your business is covered properly.

1. Safety Measures Protect Employees and Your Finances

Strong safety measures are essential to reduce claims – especially for workers’ compensation. Ensure that all safety precautions are being followed, such as having a non-slip mat behind the bar or counter, servicing stove hoods, and inspecting fire extinguishers annually. Security devices such as surveillance cameras and central station alarms also help reduce premiums. 

Be sure to train employees properly about injury prevention, especially if they are new or inexperienced. “Restaurant workers can face high-stress levels, especially with staffing shortages,” said Matt Zender, Senior Vice President, Workers’ Compensation Strategy at insurer AmTrust. “Restauranteurs should lean on their onboarding experience to ensure employee safety.”

Inexperienced staff that are not adequately trained can also cause foodborne illnesses. According to the Johns Hopkins University Bloomberg School of Public Health, a single foodborne outbreak can cost a restaurant lost revenue, fines, lawsuits, legal fees, and insurance premium increases.

In addition to safety measures, restaurants can avoid increases in workers’ compensation costs by ensuring employees are correctly classified, and payroll is accurately reported. A careful review ensures the business pays the minimum amount necessary to enforce the policy. 

2. General Liability Insurance Doesn’t Cover Everything 

All general liability insurance policies have exclusions. Owners should consider added coverage for liquor liability, food spoilage, or equipment breakdown. These are often excluded from standard policies and be potentially costly. If a restaurant has a refrigeration malfunction, for example, it can be an expensive out-of-pocket cost if they do not have spoilage coverage.

In the restaurant industry, general liability policies often have exclusions for assault and battery. If the coverage you are offered has a low premium, make sure that you have that coverage. That could be a significant and costly difference when comparing one general liability policy to another. 

If you are a family restaurant that is not open late at night, that may not be a big concern. If you are a nightclub open late hours with high liquor to food sales, then assault and battery coverage is something you want to maintain. If you are hiring security staff, you want to make sure you have a reputable security company that has its own insurance coverage. 

3. How to Protect Your Business if an Employee, Patron, or Job Applicant Sues You

Employment Practices Liability is another general liability exclusion. Even before the pandemic, the hospitality industry had more employment discrimination complaints with the U.S. Equal Employment Opportunity Commission (EEOC) than any other industries. Plus, the EEOC has more harassment complaints from restaurant industry workers than any other business sector. 

In 2022, the U.S. Department of Labor’s Wage and Hour Division brought over 4,000 enforcement actions against hospitality employers, recovering over $30 million in back wages for over 25,000 employees.

Employment Practices Liability Insurance (EPLI) coverage can protect businesses from employee-related claims such as discrimination, wage and hour disputes, or sexual harassment, whether the claim is against an owner or another employee. Legal fees alone can add up to tens of thousands whether the case is won or lost.

4. Even Minor ADA Violations Can Lead to Large Lawsuits

Owners need to comply with the Americans with Disabilities Act (ADA). Ignorance of the law is not a defense if the business is sued or fined. General liability insurance would apply if someone were injured, but it would not cover the cost of a fine if the restaurant is found at fault. Depending on your policy terms, EPLI insurance may cover ADA lawsuits.

One area that may be overlooked and lead to a lawsuit is website compliance. Check with your website designer to make sure you are compliant with ADA standards.

5. Cybersecurity Is a Mission-Critical Business Risk Often Overlooked in Food Service … 

As restaurants’ systems transform digitally, new components to systems make them more vulnerable to cyber-crime,” according to a 2022 report by consumer market research company GlobalData.

Computer systems can be compromised whether a restaurant has an older or brand-new setup. Cyber insurance coverage helps owners protect their businesses if they are hacked. 

Cyber insurance can cover recovery costs, including business interruption costs, ransomware protection, plus support to prevent attacks from happening. Most General Liability policies do not include cyber insurance coverage. 

Additional coverage options can include notification of your customers in the event their identity is compromised and repairing damaged computer systems. If a cyberattack results in a lawsuit against you, your coverage can include attorney and court costs, settlements and court judgments, and fines. 

The type of cyber insurance you need depends on the number of customers you have, regulatory requirements, and how your restaurant computers are used to conduct business.

6. If Your Business Changes, Let Your Insurer Know so You Don’t Overpay or Go Unprotected

Owners need to be sure their property coverage keeps up with their investment in the business. If a restaurant has been renovated, its property coverage may not reflect that investment or consider the cost of inflation. It may have cost $100 000 to do a renovation ten years ago, but it will cost more to replace that today if there is damage.

Restaurants often overpay for their general liability insurance because they are not rated properly. Insurance carriers may increase their premiums because they don’t receive accurate annual information. 

An annual review is one of the best ways to keep premiums down. An independent insurance agent has access to many carriers instead of just one. If you have a premium increase, accessing different carriers helps you get the best available coverage at the lowest available price.

Restaurant premiums may be mistakenly based on a much higher revenue than actual revenue. Another cause of overpaying premiums is that food to liquor sales are incorrectly calculated. The higher the percentage of liquor sales, the higher the cost of insurance. If your restaurant revenue is derived more from food than liquor, then your premium should be less than a venue that’s primarily liquor sales. 

Should you report every claim? Some restaurant owners feel that it is the insurance carrier’s responsibility to cover any type of loss. It may be best to pay it yourself if it is a small claim just slightly above your deductible. You may submit a small claim, and a couple of months later, a larger claim happens. Two claims during one policy period will affect your renewal. 

To be clear, it is important to submit claims when it is appropriate. That’s what insurance is for – to protect you. But it is also important to be cautious about the claims you submit. 

The best way to reduce your insurance costs is to take measures to avoid claims and to make sure the insurance you have covers the potential claims you may have based on your specific operation

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