7 tech disruptors for restaurants

The heads of the marketing and digital teams didn’t always have a symbiotic relationship in a restaurant company’s C-suite. But as consumers turn more to the web and brands look to tech to ease operations, these groups are working together to chart an often complex digital roadmap. While online ordering seems to be the right-now challenge that most operators are implementing and upgrading, innovations like robots, chat bots and headless restaurants are on the horizon. Marketers and IT folks came together in Austin, Texas, for an immersive discussion of pain points, solutions and next-gen tech at the National Restaurant Association’s Restaurant Innovation Summit. The overall consensus: It’s not if, but when these changes will hit the restaurant space. Here’s a look at the disruptors on their minds—and how some operators are coping.

“Do we need mobile apps for all the restaurants we eat at?” asked Wingstop Chief Information Officer Stacy Peterson. Her answer: “No. So we will evolve.” Wingstop is one of the early adopters of chat bots—or automated messaging channels, often through social media—launching its first in June for a specific use: ordering. While another other early user, Dominos, has gone with an easy-order bot for a limited menu, Wingstop took a different approach, adding customization and its whole menu as part of the conversational interface. A few weeks ago, it rolled out its second version, this time adding reordering options. One big benefit Peterson already has seen is that these models are scalable and can be leveraged across different platforms, she said.

Right now, Wingstop has six interfaces for digital ordering, with Facebook and Twitter as two of them. The response thus far? Customers like it and think it’s easy, convenient and fast, said Peterson. The brand still is struggling with awareness, though. “Customers just don’t know to engage with us,” she explained. “Once [more] of the larger brands become live on this platform, customers will start looking for it.”

Delivery-only restaurants continue to pop up in big cities, working out of commissary kitchens to produce a range of different offerings. Most have their own app for customers to order and pay, though some—such as New York City-based Green Summit Group—are offering their food only through third-party aggregators such as GrubHub and Seamless. Here's where many of these services are winning: While they may not be paying servers and hosts, they are paying in-house drivers, said Jeremiah Green, founder of nonrestaurant restaurant Eat Purely in Chicago. It helps control the experience with off-premise food, he said, a common pain point for many operators partnering with third-party delivery services.

Still in its early stages, Green sees this type of delivery-only concept expanding into more urban and larger suburban markets for one big reason: convenience. And consumers are biting. Over the last six or so months, Eat Purely has doubled its monthly revenue.

The Kogi BBQ truck, which rocketed to national recognition in large part thanks to social, was built on what founder Roy Choi says should be a steam of consciousness. “Tap into the ability to share yourself with people,” he said. Choi outlined some rules for the audience:

1. Be honest with yourself, because social media is all about honesty.
2. If you’re only shoving out content and not responding, you’re only living one side of it.
3. Get weird with it. Lose the habits and rules such as required repeated mentions and specific hashtags, and find a voice.

The digital spend for marketing is expected to increase 20.3% over the next 12 months, while traditional ad budgets are forecasted to fall 12.1%, said Terrence Gordon, CEO of 214 Interactive. While some legacy brands (and marketers) have reservations about switching away from print and TV ads, this shift has made a difference for 9-unit Willie’s Grill & Icehouse, said CMO Brandon Coleman, particularly in targeting and attribution. One area of growth, noted Gordon, is Facebook advertising, especially with videos. While it costs to create a video and boost an ad, operators don’t pay Facebook more until viewers watch at least 10 seconds of the ad, he said. “A big TV ad has thousands of people seeing it, but are they the right people? A couple hundred bucks for a Facebook ad, and you can get very targeted.”

Mooyah also uses Facebook ads and videos to market to specific customers, said VP of Marketing Natalie Anderson Liu, but its targeting is based on location. Mooyah units have their own Facebook pages, but they are all synced up to the corporate page. That way, the chain can push down ads to local pages and add tags. Since doing that, search went way up. “We also found that whenever we do paid boosts on location pages, they do better than the branded page,” she said. Reach on the branded page is 5-10%, but local pages do exponentially better, she added. Even with boosted ads, user-generated content on Facebook is the most engaging, said Laura Radewald of Hi-Per, a local marketing company. “Engagement on these posts is five to six times higher than engagement on branded posts.”

“Cybersecurity is not an IT issue, it’s a business-risk issue,” said Nick Schacht, CEO of KnowCyber. One of the biggest hazards when it comes to data protection: third-party vendors. Operators need to be aware of what systems their vendors have access to, and reduce it when possible, Schacht said. “It’s a conflict between convenience and control,” he added, noting that both the Target and Home Depot breaches happened from a third-party supplier that had system access.

He also suggested operators standardize their remote access methods and require multifactor identification, as well as plan for breaches and practice the response.

Point in case: Pokemon Go. Augmented reality—essentially an overlay—has led to productive marketing moves for fast-acting brands willing to spend time to understand how customers are using AR. Verts Mediterranean, for example, capitalized on the Pokemon Go phenomenon, hosting an in-store Poke Party for a few hours. To host, it dropped in-game lures (for a total of $5.95) to draw in those looking to catch Pokemon. During the party, traffic increased 114%, and it had some longevity with follow-up media coverage, too, said PR Manager Sarah Pendley.

Next up will be virtual reality, predicted some tech experts. The difference: While augmented reality is an overlay, VR is a complete immersion.

Right now, operators’ experiences with third-party delivery companies are a mixed bag of happiness and hatred, depending on the company. But as consumers continue to demand convenience via delivery, operators wanting to compete are partaking. “In the eye of disruption, what is best practice?” asked Cicely Simpson, EVP of policy and government affairs for the NRA. At this point, there are a five things she’s suggesting to operators:

1. Contracts
2. Intellectual property (for both parties)
3. Food safety practices and training
4. Addressing “bad actors”
5. Consumers