When John Peyton took the CEO job at Applebee’s and IHOP owner Dine Brands Global late last year after a career with the real estate franchise Realogy and before that the hotel company Starwood Hotels, in at least one respect he went back in time.
Technology. “I was leading the loyalty program at Starwood in the mid-2000s, when we had a very sophisticated [customer relationship management] program and one-to-one marketing,” he said at the FSTEC technology conference this week.
He knew how frequently his customers stayed at the company’s hotels, whether they went to one of the hotel’s restaurants or they spent money in the spas. “I don’t have that kind of insight yet at Applebee’s and IHOP,” Peyton said.
It was a reminder that, for all of their movement toward technology, they have a long way to catch up to many other consumer industries.
This, in fact, wasn’t even Peyton’s only example. Pointing to the robots that were popular attractions at the event, he noted that hotels had been testing those for years. He noted that Starwood’s Aloft brand had a robot in several locations delivering room service.
“They could program it to go from the basement to the elevator to the door,” Peyton said. “It’s not so far off to think that could happen.”
Restaurants for a long time were the Luddites of the consumer world, far behind businesses like hotels and even grocers in adding technology. They are rapidly working to catch up to those other industries, making it vital for even the smallest operator to consider issues like loyalty and ease-of-ordering when planning their businesses. The old way is simply not as effective today as it once was.
For a lesson within the restaurant industry, simply look at the pizza business, which was among the first sectors to rapidly adopt technology to make ordering easier. They quickly adopted online ordering and then mobile ordering. They established consumers’ desire for ease-of-ordering and were among the first to use in-app loyalty programs and the one-to-one marketing they provide.
The result of all of that has been a shift in the business away from dine-in to more takeout and delivery. Pizza Hut, for years the country’s largest pizza chain, is now largely a takeout concept after a multi-year shift away from its traditional dine-in asset base.
Restaurants have traditionally been slow to adopt technology largely because there was relatively little perceived need, and because the technology was too expensive. Restaurants are capital-intensive businesses, and operators tend to be loath to pile more costs on top of that.
As consumers shifted, however, and more technologies entered the game to disrupt the business, they had little choice but to jump on board. The pandemic has only sped that process. As a result, over the past year more than a dozen major fast-food chains, including McDonald’s and Burger King, have adopted the kind of loyalty program Peyton was working on 15 years ago.
To illustrate just how important technology has become, more restaurant chains are looking outside the industry for top executives—people like Peyton, who have experience working in industries that technology has already disrupted. Jack in the Box, Buffalo Wild Wings, Jamba and others have hired top executives from outside of restaurants.
Blaze Pizza, for instance, named Vincent Szwajkowski chief marketing officer last year. His previous job? CMO for ArcLight Cinemas and Pacific Theaters.
“Coming from movie theaters,” he said at FSTEC, “they have more technology than the restaurant industry.”