What we already know: Consumer-facing technology is encroaching on the restaurant experience. Ordering, payment, reviews, loyalty—it’s all gone digital. And restaurants lag other retail industries in adopting the latest "it" capability.
Technology can be a great enabler for restaurant businesses, Lauren Hobbs, director of marketing for Union Square Hospitality Group, said at this year's National Restaurant Association Show. But that's only true when operators understand what they want, and not all do, she explained.
Other speakers noted the confusion of some restaurateurs about what's available, what's not, and what even fundamental tech can do.
They painted a tech landscape that may not be as advanced as the geeks profess. Why, for instance, can't POS systems even "talk" to one another, asked Red Robin COO Carin Stutz.
Read on, non-nerds, to see where the industry truly is on tech, an understanding of the capabilities, and the rate of adoption.
Tech is driving business...
A third of consumers say technology makes them choose one restaurant over another, according to National Restaurant Association research. And 37% say tech leads them to certain restaurants more often than others, either for dine-in or takeout orders. Why do consumers want tech? Convenience and accuracy—65% of consumers say tech ups order accuracy, and 67% say tech helps with speed in restaurants.
...but not all consumers are buying in
While a third more consumers say they are likely to use tech in restaurants now, compared to two years ago, 11% still say they aren’t likely to use technology in restaurants, said Annika Stensson, the NRA's director of research communications. “It’s not universally embraced.”
There is a barrage of barriers
While cost remains the biggest obstacle for operators looking to add technology at restaurants—the price of implementation, usage costs and service and repairs all weigh heavily—half of operators cite a lack of infrastructure as another blockade they see for adopting tech. Another deterrent: staff training. Some 44% of operators say that getting their staff on board and up to speed is a challenge when considering tech.
And basic functions still need work
With all the hype around mobile ordering, operators seem to think it still needs improvements before seamless integration and functionality can happen. Almost two in five operators say that custom ordering is the most important area of development for restaurant tech over the next five years, the NRA found. A quarter cite payment options as the top priority, with another 25% suggesting loyalty programs as the key area to work on.
LSRs are ahead
Limited-service restaurants, both quick service and fast casual, are more likely than table-service spots to have adopted technology, said Stensson. Chain and franchise-owned places also are more likely to have tech in place, compared to independent restaurants.
Consumers’ mobile use isn’t advanced
Only about half of consumers are using their smartphones to place takeout and delivery orders via a restaurant’s website or branded app. And even fewer (24%) are placing orders via third-party service apps. The most common reason consumers turn to their smartphones: to look up locations, hours and directions for restaurants, followed by using their device to scope out a menu. More than half of consumers also will turn to mobile to read reviews from sites like Yelp.
Mobile isn’t all about data collection
Despite all the talk about big data and a better understanding of specific consumer behavior, only 6% of operators say they developed an app for data collection. The top reasons operators gave for developing a branded app: Building sales and driving traffic, followed by consumer engagement.
What’s on the near horizon?
Many outlets are considering more options in online reservations. OpenTable currently is testing the option to let guests pick their table, be it a patio spot, bar seat or front-of-the-restaurant table, in select cities.
And it’s something guests seem to want; 45% of adults say they would like to pick their exact table when making an online reservation. Further, 14% said they’d pay a fee to get a better table.
The big want: Predictive ordering
When asked what technology they would implement if it were available today, more than half of operators said they’d buy into predictive ordering, or purchase suggestivity and guidance based on guest behavior (similar to Netflix’s ability to suggest content based on viewing preferences and history).
A smaller but still significant percent of operators, 36%, said they’d put in auto menu-price adjustments that are based on demand, similar to Uber’s surge pricing during peak hours.
On the consumer side, three out of four say they would go to a restaurant during off-peak hours if they got a discount.
What doesn’t seem as popular: automatic food prep systems, with just 13% of operators saying they’d install that kind of tech. They still want humans for those jobs.