Find out how technology is transforming the casual dining sector.

In the hospitality industry many IT managers are faced with an inherited hotchpotch of ageing and unconnected systems. This spaghetti soup of IT not only makes it difficult to keep the lights on; many businesses are missing out on some truly delicious data as well.

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Making the Link: a review of the emerging IT market for the restaurant industry

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Pub and Restaurant IT is Finally Catching Up: Are You?

October 4 2016, by Olivia FitzGerald

Customers don’t just appreciate technology - they expect it.

Catch_Up_-_how_pubs_and_restaurants_are_getting_their_IT_in_order_2_1.jpg


 

“Technology has become a significant factor in restaurant operations, and many organisations are eager to shed the “laggard” moniker that has long plagued the industry.”

HT: Technology & Business Strategy Align to Focus on the Customer Experience 

 


 

At long last it looks like the restaurant and pub industry is waking up to technology as a vital driving force for success.

But what’s behind this emerging trend? Which restaurant technologies should you prioritise? And what are the challenges ahead as the industry tries to get up to speed? We took a few moments to review some of the latest research and this is what we found.

Setting the scene…

Restaurants are currently spending 2.5% of their revenue on technology, as reported in the Restaurant & Technology Study 2016: Profiling Innovation. This looks set to grow in the near future. The report found that 44% expect to increase spending on technology by 1-5% from the previous year.

As the 2015 Restaurant Industry Forecast stated: “Technology is becoming an expectation rather than a novelty.”

Why are restaurants getting up to speed with technology?

The use of technology in the casual dining sector is developing at a rapid pace. This quote puts it most succinctly:

 


 

“Customer journeys look nothing like they did a decade ago, five years ago, or for that matter even a couple of years back. The dining experience today starts long before a guest enters a restaurant — they’re reading reviews, exploring menu options, and reserving tables. It could even start and end from their couch via a mobile app.” 

Restaurant & Technology Study 2016: Profiling Innovation

 


Customer expectations

With the above in mind, restaurants and pubs are being driven towards greater focus on technology by their customers. We live in the age of IT and mobile and so that should be no surprise. Venues that ignore this fact and fail to keep up with the way consumers behave run the risk of losing out.

The National Restaurant Association has done extensive research investigating what technology in restaurants means to dining customers:

  • 79% said they thought technology increased convenience

  • 70% said it sped up service and increased accuracy

  • 45% said it made dining out more fun

  • 35% said it made them choose one restaurant over another

  • 34% said it made them dine out or order takeout more often

  • 24% said the availability of technology options is an important factor when choosing a table service restaurant 

The types of technology that increase customer convenience and are becoming more and more popular in restaurants include smartphone apps and online ordering systems. These help to speed up the ordering process and reduce human error. Electronic menu boards also fall under this banner, as well as adding a touch of novelty which may explain the response ‘making dining out more fun’.

A few industry leaders are also introducing mobile or wireless payment options, iPad tablet menus and touch-screen ordering kiosks. Although less widespread for the moment, these technologies also aim for greater convenience and accuracy to improve the customer experience.

Simply put, ‘Customers now assume restaurants have enhanced tech capabilities, and might go elsewhere if they don’t.’ (Ben Barnett)

Efficiency and ease

Another key driver of IT advancement in pubs and restaurants is ‘advanced functionality’. This, along with ‘ease of use’ has been cited as a top reason for replacing the existing method or software.

How are budgets being allocated?

It’s clear that restaurants and pubs are putting their money where their mouth is. Two thirds of restaurants planned to spend more on technology in 2016 than they had the year before.

This continues a trend that began earlier. In 2015, 47% of restaurants anticipated an increase in tech projects, with 60% of those budgets earmarked for OpEx. (HT: Technology & Business Strategy Align to Focus on the Customer Experience

Catch_Up_-_how_pubs_and_restaurants_are_getting_their_IT_in_order_Graphs.jpg

Restaurant & Technology Study 2016 Profiling Innovation

 

What technologies take top priority?

Among the top 10 most important technologies for 2015, customer-focused and mobile-centric IT solutions looms large:

  • Customer Relationship Management System (81%)

  • Mobile Wallet (79%)

  • Customer Mobile App (76%)

  • Tableside Payment Device/Mobile POS (73%)

HT: Technology & Business Strategy Align to Focus on the Customer Experience 

 

The trend around the top three areas of software changes planned by restaurants has continued into 2016:

  • CRM/Loyalty

  • Digital Ordering

  • Consumer Mobile App

Restaurant & Technology Study 2016 Profiling Innovation 

What are the challenges ahead?

While venues are making great strides in restaurant IT following a period of lagging behind other industries like retail, they still face a number of hurdles. 

Catch_Up_-_how_pubs_and_restaurants_are_getting_their_IT_in_order_Graphs2.jpg

Restaurant & Technology Study 2016 Profiling Innovation

 

As well as the challenges in the graphic above, the same study identifies the following human resource issues that are getting in the way of venues fully embracing technology: 

  • Technology teams are still overwhelmed trying to run core business systems.

  • Only 31% of the restaurants in this study use an IT steering committee. Most restaurants don’t see the link between technology and their company’s “mission.”

  • 44% of restaurants* have a CMO (below industry average), but only 38% have a CIO (well below industry average of 50%).

*The study reflects a combination of national and global restaurant groups (49%) and regional restaurant brands (51%)..

 


 

“Of those restaurants that rate themselves as ahead of the industry in innovation, 68% have a CIO on staff. Among restaurants that rate themselves as lagging the industry, only 38% have a CIO.”

Restaurant & Technology Study 2016 Profiling Innovation 

 


Where should pubs and restaurants put their top priorities?

According to National Restaurant Association Senior VP of Research, Hudson Riehle, “Technology in and of itself isn’t a ticket to success in the industry, but it can be the hook that creates loyalty.”

Cloud-based software is a key area, with restaurants and pubs prioritising this area above all others when it comes to research and development. Solutions that can store information, update orders and bookings, and be accessed by different team members all contribute to greater customer satisfaction and operational efficiency.

As Bob Krummert observes in Restaurant Hospitality, “[Technology] is an investment that can enhance the guest experience while simultaneously helping a restaurant become more efficient and profitable.”

The future is bright

It looks like restaurant IT is finally catching up with the demands of customers and the prevailing trends of our time.

Mobile readiness, customer experience and innovation are becoming par for the course. Restaurateurs and pub owners are more prepared to perceive themselves as innovators, with 32% seeing themselves as ahead of competitors.

 


 

“There’s a plan for progress: increase technology spending, look for cloud solutions to alleviate the burden of costly maintenance, and create better tools for customer engagement via loyalty, mobility and CRM.” 

Restaurant & Technology Study 2016 Profiling Innovation

 


Key points to remember:

  • Customer expectation is the major reason for restaurants and pubs to get their IT up to speed

  • Studies show that venues are investing more money into improving technology solutions

  • CRM, loyalty, digital ordering and mobile apps are the major areas of investment

  • Lack of a dedicated IT officer is a hurdle to maximising innovation in this area

  • The future of restaurant IT lies very much in cloud-based, customer-focused technologies

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Topics: Technology