Delivering the Digital Restaurant: 5 tech trends your restaurant … – Nation’s Restaurant News
It’s a new year and technology continues to drive restaurant innovation in myriad ways. Here are five styles you should be paying special attention to.
1. Leading digital restaurant brands will look increasingly like e-commerce companies
As restaurant-guest engagement digitizes and anonymous transactions become known guests, restaurants will kick into a fresh gear using the data these transactions generate. Restaurants are turning in to e-commerce companies. Even though fulfillment is not coming out of a DC somewhere, but rather out of your local cafe, the electronic interfaces plus interactions with restaurants are usually looking very, very similar to what we see in e-commerce.
Already in the restaurant digitization journey, every new development echoes something from five or 10 years ago in web commerce. We have long been fans of Larry Ingrassia’s book Billion Dollar Brand Club . In the guide, Ingrassia goes through the development of direct-to-consumer manufacturers in the particular CPG and apparel space. Reading it, if one were to replace the various consumer goods he’s discussing along with the word restaurant , it’s easy to see where we are heading.
As an example, Carl’s company, Juicer, is applying dynamic pricing to the restaurant industry. That exists today within e-commerce. Amazon’s been doing it for years. A consumer will go to their cart plus Amazon says, “this item has changed 27 cents. ” Dynamic pricing happens constantly in other verticals, and within many ways restaurants are lucky because the industry is digitizing last. So restaurants just get to lift all these types of winning ideas and bring them over to the food industry.
To accommodate all these innovative suggestions, what we’ve seen in other verticals is the creation of platforms. A platform is the dominant place that the eating place goes to get most of their own technology. Then other businesses, with killer features, plug into the platform. Sometimes that’s in the form of an app store where you can go choose the things you want in order to add in. Sometimes that’s happening invisibly within the background where the big organization gets an API license with a smaller company and brings their particular functionality in.
The great news for restaurant brands will be that they will be able to provide the functionality that consumers expect from other verticals without having a million different technology partners. It doesn’t necessarily have to be what it’s been for the last few years in the restaurant business: you need this subscription and this membership, which one and this 1.
2. E-commerce metrics will become critical to managing a great restaurant brand
If we assume that will restaurants are usually going in order to become closer to ecommerce companies, then clearly we need to have some e-commerce metrics also. Words like Customer Life-Time Value (LTV), Client Acquisition Costs (CAC), Search Engine Optimization (SEC), plus Conversion Rate Optimization (CRO) are words that are going to turn out to be part of the cafe vernacular.
The delivery marketplaces are going to help restaurants get there. They are already starting to make the particular reporting on their backends better so that restaurants can do things like measure their return upon advertising spend (ROAS). Restaurants can also see how their own customers are going down through the e-commerce funnel, right from viewing their particular restaurant within the third-party menu to getting on to your restaurant’s menus, to selecting items and putting them in the cart. Then cart abandonment. (That’s another metric that we’ll see! ) So these e-commerce funnel measurements are going to be much more common within the restaurant market as more and even more of the transactions become digital. Even dealings that are not on the marketplaces, if they’re first party direct or if they are on kiosk within store or even on a tablet at the table, they are usually digital enough to create data.
Restaurants are also going to start demanding more plus more of these types associated with metrics from the technologies companies. It only takes a quick look at the back end from the biggest market segments over here and compare them in order to what you might get from a Google dashboard, for example, and you could see straight away that you don’t necessarily get the same level of digital marketing information as what you would with a big established player such as Google.
3. Dining places will start to talk about the percent of sales they spend on technology
Restaurant brand names have the fairly convoluted tech stack today. They’ve combined legacy systems with new channels and innovative features residing in one-off technology. Most sophisticated restaurants run 15-20 different pieces of software to make all of this omnichannel digital product sales work. In an inflationary environment — or worse, in a recessionary atmosphere — perhaps we’re going to find that things will start to get cut.
When a person look across the average digitally sophisticated restaurant chain today, they are spending 2-4% of sales on technology. It’s very hard traditionally for restaurants to measure how much they invest; some associated with it’s occurring in store, some is happening above store, a few of it is CAPEX, some of it is usually OPEX. Some of it really is actual technologies subscriptions. Some of it is definitely perhaps utility-based fees or even people working in technology. This resides within so many different parts of the P& L that it’s very hard to keep track of and therefore really hard in order to measure because a percentage of product sales. But restaurants are heading to obtain much more focused on technology spend, and they will certainly figure this out. After that they may ask, “Is it driving the return that we want? ”
4. Restaurants’ demand for technologies ROI can combine with the particular interest rate environment to cause consolidation among technology providers
Once dining places start looking at exactly what they are usually spending, plus they start to compare that to the value delivered from technologies investments, these people will begin to ask if they can do this in a better way.
Many tech stacks, especially the ones that have already been pieced together, are somewhat complex within the sense that they don’t always talk to each other, and when they don’t talk to one another, you either have in order to create clunky interfaces to help all of them talk in order to each other or you just do without, and that will obviously isn’t great for the particular efficacy associated with the operation and ultimately the guest experience.
This means that the natural result of looking at ROI of each individual tool can be likely to lead to even more consolidation. Within 2022, all of us saw acquisitions from DoorDash, Olo and Toast. These leading players are likely to perform more of the same as they will look in order to become a single central place that a restaurant can get all of the various things it needs to digitize. As innovation proceeds, we may begin to observe headless APIs add bits of functionality directly into other companies’ big systems.
Ultimately the industry has in order to deal with the particular root cause of the complexity issue, which was that we all innovated rapidly and Frankensteined all of these bits and pieces together. That’s what’s led to the clunky tech stack. The only way to get around that is to step back again and go back in order to first principles. Now that we know what a digital eating place needs, how would you build it if you were building it from the beginning instead associated with kluging almost all these points together? We might actually notice something start totally from scratch and re-create the technology stack in its entirety. Meredith’s company, Empower Delivery, does exactly that. Built with regard to delivery from the ground up.
five. 2023 will be a year of normalization regarding restaurant delivery
We remain bullish that delivery is still a big part of our industry. Last year might possess felt like a leveling out or pullback of shipping compared to the pace of 2021, when the industry was nevertheless dealing with the particular pandemic. In 2023, restaurant delivery will reach equilibrium, with a more steady-state growth rate rather than ultra-high growth driven by customer adoption.
While it feels like delivery is certainly a luxury that many cannot afford in the face of inflation, it is important to remember the total cost of use with delivery. A lot of consumers who order delivery do so because it means they will not have got to obtain a babysitter, or maybe they are consuming a bottle of wine in home instead of buying one particular at a markup at the cafe. Many younger generation customers don’t have cars. Delivery enables them to live an excellent lifestyle that does not require a car. Think associated with the savings if someone will bring this to you instead than buying a car. Especially for those individuals who have Dash Pass plus Uber One and GrubHub Plus, I think they will continue to order shipping in large numbers.
Having said that, consumers are likely to be much more promo-sensitive. Restaurants and delivery marketplaces alike will increase promotional activity. As the result, check growth will certainly slow, yet transactions may continue.
Meredith Sandland plus Carl Orsbourn are co-authors of “ Delivering the Digital Restaurant: Your Roadmap to the particular Future of Food . ” After each spent 20-plus years in corporate strategy and retail food, Meredith and Carl each concluded that meals in America was changing. They left their corporate jobs in search associated with innovation that will would transform the eating place industry. Ghost kitchens, virtual brands, electronic marketing, the gig economy and lean operations are at the heart of the future they envision. Their next book “Delivering the Electronic Restaurant: The particular Path in order to Digital Maturity” is due out this winter. Subscribe to their newsletter and podcast from deliveringthedigitalrestaurant. com .