A lot of crystal balls come out this time of year and they often display an intriguing forecast of what’s to come in the near term. For the restaurant industry, many of the recurring images appearing in those crystal balls have to do with technology.
According to Datassential’s 2023 predictions, for example, artificial intelligence will have a “huge” impact on the industry, not just by helping to develop new items but also by easing the continuing labor shortage. Chef Tom Aviv is an example of the former, having recently debuted a restaurant in Miami that uses DALL-E (AI) technology to help create the menu.
Several restaurant brands have adopted AI technology for tasks such as automating phone orders, receiving drive-thru orders or monitoring coffee systems. Kris McDonald, vice president of development at Checkers & Rally’s, recently said her company has had such success with the technology, she expects it to eventually roll out systemwide and evolve into further applications, like inventory analysis.
AI-powered self-service technology is also a 2023 prediction from Oracle Food and Beverage. Chris Adams, VP of strategy, said, “Technology like AI-powered voice will optimize phone orders and the drive-thru experience, while self-service kiosks will help take pressure off staff and offer customers additional customization options and flexibility during the visual ordering experience.”
Adams adds that self-service ordering capabilities will continue to evolve as customers become more familiar with the technology, pointing to in-car digital assistants as an example. In 2021, BurgerFi became the first restaurant brand to launch in-car ordering through 5G vehicles, and several brands have since acknowledged the tech’s potential.
Notably, tech-related predictions extend well beyond AI ordering and self-service. Adams expects restaurants to become more reliant on data pulled from systems that are increasingly more integrated to best achieve efficiencies. Technologies like kitchen display systems, end-to-end payment processing and streamlined point-of-sales systems will better enable concepts to simplify their business while achieving more workplace satisfaction and profitability.
Several concepts are leveraging such technologies to prepare for a potential recession. During a recent Emerging Restaurateur Live Learning Series webcast, Scott Lawton, CEO of bartaco, said “We are figuring out ways to leverage technology to make it easier. We’re not talking about robots, but product flow and sales projections for accurate prep and ordering. There is a real opportunity.”
Technology has also become an important catalyst for driving and maintaining the customer experience, according to Hudson Riehle, senior vice president at the National Restaurant Association.
“Operationally, investments in technology have and will continue to become an important competitive differentiator. It’s important to look at (technology) as an enhancement in a typical restaurant model where a lot of processes can be made more efficient without compromising the experience,” Riehle said during a recent interview.
The catalyst includes loyalty, which has been proven to drive frequency and ticket from heavy users. Adams said loyalty programs now need to cultivate an authentic relationship that demands an emotional connection, beyond transactional rewards.
“The objective is to create more engagement and stay top-of-mind with customers, including when they’re not hungry,” he said. Accordingly, he expects companies to move away from points and promotions and more toward experiential dining or exclusive offerings.
We’re already starting to see this loyalty evolution take shape and the benefits extend beyond meeting customer expectations. New data from BentoBox, for instance, finds that revenue from loyalty program promotions jumped by nearly 75% year-over-year.
These predictions just scratch the surface of what the 2023 crystal balls are able to show. There is, of course, menu, marketing, pricing, financing, growth, real estate and labor implications to consider – among other trends. But, for now, the tech piece seems to be particularly critical to both meet changing consumer expectations and achieve efficiencies amid a persistently challenged environment.
Notably, and well beyond 2023, tech investments are also likely to help with future proofing. As Datassential points out, Gen Alpha – those born between 2010 and 2024 – are starting to gain a significant amount of influence. In fact, the generation is expected to have the greatest spending power in history, and restaurants are wise to take notice sooner than later.
“They already impact what their family buys, while a generation of kid influencers are having wider impacts,” Datassential notes. “This generation was largely raised by their Millennial parents, will be more diverse than ever, and have used technology since they were babies.”
Contact Alicia Kelso at [email protected]