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[20 comments]

Restaurants Looking At Record Year Ahead

December 11, 2012

A new report by the National Restaurant Association (NRA) is projecting an increase in sales for the fourth straight year, reaching an all-time high of $660 billion. With that growth will come major investments in technology.

According to an NRA survey, 54 percent of restaurant owners say they will invest more in technology in 2013.

"Technology has gone to the top of restaurant-owner action lists for 2013," Hudson Riehle, senior vice president of research at the association, told USA Today.

Part of the reason behind the investment in technology is the demographics of restaurant patrons. According to Mr. Riehle, 18- to 34-year-olds are the key demographic for restaurants.

Technologies that will become more prominent in 2013 include tableside and mobile payment options.

According to the survey, 44 percent of those going to sit-down restaurants would take advantage of a tableside option if it were available. Roughly one in three would pay with a mobile device.

Research by Technomic shows consumers are interested in a variety of ways to use technology to order meals, including: mobile ordering, iPad kiosks, Facebook, tabletop e-waiter and digital menu boards.

Discussion Questions:

Where do you see the greatest opportunity for technology to improve the dining experience for consumers in sit-down restaurants and fast feeders? Are there any downsides to the rush to adopt consumer-facing technology in restaurants?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How effective will technology be in driving restaurant sales?

Comments:

I do think that the cost of using a credit card and the higher transaction costs and the taking of credit card numbers by fraudulent wait staff is the concern. Technology that allows the wait staff to take payment at the table and the ability to accept a debit card and pin at the table much like in Europe and the rest of the world should be a priority for restaurant operators in 2013. In this way, the credit or debit card is never out of site from the patron.

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Frank Riso, Principal, Frank Riso Associates, LLC

I worry that food or beverages will spill onto all the devices on and around the table. People eating out have their smartphones and iPads on the table as it is. Add food and drinks to the mix, plus the restaurant's technology and it could be hazardous.

The good news (perhaps) is that all the devices are sufficiently small so that diners can see each other and the wait staff. They will probably be aware of someone leaving due to lack of attention.

Sorry about the silliness above. Well, not exactly.

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Joan Treistman, President, The Treistman Group LLC

When I was in Tokyo, my brother and I sat for a very long time in a Roppongi Hills restaurant without anyone coming to greet or serve us.

What we didn't realize was we could have ordered our meals from the touch screen device sitting on our table and scan the QR code to view the menu in English.

I see the big opportunity as allowing customers to provide self-service to find a seat, order their own food and take advantage of loyalty as well as secure payment processing over their phone; I don't trust giving my credit card to any restaurant anymore.

Ed Dunn, Founder, (Stealth Operation)

I think the technology issue is different for various types of restaurants. Mobile ordering and a pick-up line would make fast food even faster. The ability to utilize technology to change menus quickly to take advantage of available foods can make dining experiences better for customers. Fresh menus will be a competitive advantage for proprietors. Waiters with mobile ordering and payment systems will spread and customers won't have to wait for the interminable credit card run after dinner.

These are a few short term benefits; I am sure there will be others back up the supply chain that will enable restaurants to take advantage of competing suppliers, etc.

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J. Peter Deeb, Managing Partner, Deeb MacDonald & Associates, L.L.C.

We are probably behind the curve in restaurant use of technology. I recall hearing about what is planned for release next year almost ten years ago. Has the reluctance been the restaurant industry's fear of moving forward?

I can see the initial best use in being able to pay at the table through use of the device, thus speeding up the checkout process and making the table turnover quicker.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Agree with Ed. I love being able to pay at the table using a device. It allows me to move at my pace and not be dependent on a wait staff that is likely assigned to many tables.

When there is not this capability I try to make sure the person takes my credit card when I ask for the check to save them having to make a second trip and me having to wait for them to do so.

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Steve Montgomery, President, b2b Solutions, LLC

Technology will continue to evolve, but I don't want some robot taking my order, or I will use the drive-through for take home. Mobile tech is all the rave, and I understand the significance of it, but many upscale restaurants thrive on the human experience, and there is no substitute for that.

High-end, quality cooking and food prep equipment is where I would put my money, as food safety from the kitchen perspective continues to improve. Cost of food will continue to climb, making portion control critical for profits.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

Technology in the restaurant industry will be good for both the operator and the guest.

Some technology is "cool" and adds to the experience (for now—until it becomes the norm).

For example:

Going to a restaurant that features iPads on each table that showcase menu items with descriptions, pictures, reviews and testimonials.

The "build your own burger" type restaurant that allows you to use the tablet or iPad to order the burger from your table, with all of the options listed so you get it exactly the way you like it.

There are technologies that help the operation. For example:

Servers using mobile devices to place orders in real time, while they are at the table. The server doesn't have to take the order to the kitchen, or key it into a computer that's off the floor. This allows the servers to not have to leave the floor, giving them the opportunity to better serve the customer.

These technologies (and more) are just scratching the surface. Keep in mind that not all restaurants are suited for certain technologies. Always think about the guest impact. Does it enhance the experience or not? Does it complicate or simplify?

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

The greatest immediate opportunity for technology and dining is in the "pre-shop." That is, technology can enable patrons to arrange dates with groups of friends or colleagues. Open Table has done some of this; Capital Grille has done some of this. I think more comprehensive, branded solutions will be on the way—especially with web-enabled, social-media-enabled TV.

Of course, QSR (notably PizzaHut) has done a terrific job in the pre-shop with their mobile ordering apps.

About technology on premise—Buffalo Wild Wings has set a precedent of gaming as part of their branded experience. We'll see more of this across casual dining and even neighborhood bars as the Millennials are constantly connected to their mobiles while on premise. This needs to become part of the experience or the establishment may lose a serious competitive advantage, moving forward.

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Liz Crawford, VP, Strategy & Insights, Match Drive

For both types of restaurants, the digital menu board could be very helpful if it contains ingredients and the ability for the person with a food allergy to sort the menu by absence of ingredient.

Also for both types: active control of the ambient sound. A certain amount of room noise adds to the atmosphere, but too many busy places are way too loud. There are plenty of simple passive methods too, which I am repeatedly surprised to not see in broader use.
For sit down restaurants, the support systems will continue to be the invisible advantage. Any system which helps the wait staff be smarter about individual patrons and be on time with each table will help differentiate.

For fast-feeders, anything that brings the fast part back will help.

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Dan Raftery, President, Raftery Resource Network Inc.

Payment processing table side is a must IMHO, but call me old fashioned...I enjoy talking to the wait staff about the food. Gee, if I didn't have them to talk to, it would be a pretty boring experience. Yes, my husband is one of those that reads during meals. :)

Lee Kent, Brings Retail Executives Together to Meet.Learn.Profit, RetailConnections

Consumers are pushing businesses of all kind to adopt technology at a rate faster than ever before. For years consumers have used apps like Yelp and Open Table to research, find, learn about restaurants and to have one place to make those pesky reservations.

Each restaurant segment will have different needs based on their offering. Fast food will get even faster and more convenient, and if there's down time they'll add fun with digital games; casual dining will help focus the dining experience by eliminating long waits to order and checkout; sit-down restaurants will have their own apps that enhance the eating experience with information on the menu, food, wine and stories that bring it all to life.

Marketing by restaurants will also change as they tap the power of 1:1 non-intrusive personalized marketing.

This will be a multi-year technology investment by restaurant chains as they try to catch up to the tech-savvy social and (still) time-starved consumer.

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Tom Redd, Vice President, Strategic Communications, SAP Global Retail Business Unit

We are certainly starting to see restaurants using iPads and other mobile technology to accelerate the meal ordering process. Others are providing customer ordering via touch screens and kiosks at their table. In both cases, my experience with this new technology has been very positive.

However, until technology can keep my water glass full, or send my steak back to the chef for another 5 minutes on the grill, the human touch will remain in demand.

Technology will most assuredly continue to assist the dining experience by allowing customers to pre-order meals prior to arrival at the restaurant and even payment for the meal, whether it be pre or post the consumption. Technology should also be suited for at the table activities such as selecting and matching wines to entrees, or even sorting entrees and other menu items by their nutritional content or by the customer's dietary needs.

What technology should not attempt to do is replace good, friendly, personal service that is the point of difference for many successful restaurants.

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Mark Heckman, Principal, Mark Heckman Consulting

Huge opportunity for restaurants to turn tables faster. The delays in waiting for staff to take orders and return the check to the table adds up to ineffective and unproductive use of time. Huge profitability growth potential when devices are leveraged here in the US. Internationally, these options are taking hold faster.

I see no downsides at all.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Of all the retail segments, restaurants will be the most insulated from technology, simply because the bricks experience factor is so important. Where everyone in other areas of retail are worried about Amazon, not so with restaurants...and why should they?

Having said that, there are ways to use tech to improve things like awareness, speed of service, pick up and even reservations that would improve the experience even further. But in the end, the ancient rule of physical experience wins out.

To me, Chipotle's app is a great example of how to use tech in the restaurant segment—order and pick up, menus, location, coupons...but of course, their in-store experience is the topper: fantastic.

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Lee Peterson, EVP Creative Services, WD Partners

Pay at the table probably rates pretty high on diners' wish lists to use technology to improve the dining experience. That and easier ways to initiate a request for wait staff to come by.

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Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect

What are the opportunities? Really nail the experience for regular customers—make it the equivalent of what TSA's Global services is like at airports—scenario: A: "Excuse me, what's going on with those people, they came after me, got served quicker and walked out without paying!" B: "Oh, they are a member of our 'regulars' program," it's easy to join but we'll need you to fill out a profile." Nail that process and deliver healthy quick serve foods and I'll come by 3 times a week with friends and associates.

The technology is there to help you operationalize this use case. It depends on the culture of the restaurant to execute—that raises another issue—is the chain prepared to experiment? Innovation in chain restaurants is tough for a variety of reasons, but the opportunities are there given the changes in how we work, live and eat.

Vahe Katros, Consultant, Plan B

Technology is not the reason people are eating out more often, it is because restaurants are making it easier and more affordable to do so. Great prices, great customer service, and great food will continue to be the mainstay of restaurant success (and growth), not technology or the implementation of new technology. No one goes to McDonald's to eat because they have a new touch-screen ordering system....

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Kai Clarke, President, Kowa Optimed, Inc.

Mobile ordering for promotional offerings can be more lucrative to customer groups interested in low cost and quick turn around. Inside restaurants, iPads can replace collaterals on table. Some amount of assistance from waiters will be required for choosing and ordering from the menu. For tracking the 18-34 year old segment, investment in social media monitoring should be a priority.

Chandan Agarwala, Manager - Strategy and Research, iGATE Corporation

For all the sizzle of table side digital boards and tablets, the best opportunity lies in diners' ability to use their own devices for discovering, comparing, ordering and ultimately paying. This is best provided on-premise by promoting restaurant mobile websites or native apps. Some advantages:

1. Reduces the hardware purchase and maintenance costs for restaurants

2. Opens an ecosystem for directory providers like Yelp, Open Table, and Yellowbook to refer traffic and provide added content like menus for pre-ordering and reviews post-dining

3. Allows diners to more easily opt in to email and SMS offers that offer future deals and generate future business

4. Sets the stage for loyalty programs and mobile payments that operate more effectively using diners' own devices

The wait staff acts as a complement to the dining experience, adding color to the food choices as well as providing support in using the mobile UI. This overcomes the adoption and activation barriers that plague many mobile services.

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Dan Frechtling, Vice President, Global Product Management, hibu, PLC

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