We just returned from Dallas for the FSTEC Conference, which focuses on the intersection of restaurants and technology. The event provides some insight into the current trends, including advice for brands and operators on what works and what doesn’t, and thoughts on what’s coming in the future.
The Restaurant Business editorial team covered the event extensively. Here are 10 major takeaways from the event.
What’s in a name?
A surprisingly common topic at the conference was the art and science of naming an AI chatbot.
At Bojangles, restaurant employees came up with the on-brand moniker Bo-Linda for its drive-thru voice bot. And the bot at New Zealand Burger King operator Antares is called Patty. Head of Operations Excellence Stephen Brown said the company chose a gender-neutral name so that the bot could switch between a man’s and woman’s voice throughout the day.
Though the naming is all in good fun, it raised some ethical questions. “It is disrespectful to women to give chatbots exclusively female names,” said Catherine Roberts, director of intelligent automation capabilities for Chick-fil-A. The chain developed a procedure for naming AI chatbots with that issue in mind.
Convenience stores are a growing competitor
You may or may not consider convenience stores to be a competitor to fast-food chains, but a growing number of consumers do.
Two years ago, less than half of consumers told Intouch Insight that they consider convenience stores to be a good place to get prepared food. That percentage is now up to 56%. “This is only increasing more,” Intouch CEO Cameron Watt said at FSTEC.
Convenience stores are focusing more on prepared food, led by concepts like Wawa, Sheetz and Buccee’s. With consumers continuing to yearn for convenience, these brands are going after the very customers that would typically occupy a drive-thru on their way to or from work. And consumers are clearly responding.
Technology isn’t a huge labor savior
The influx of technology in recent years has come at least in part as a response to labor challenges in the restaurant space. Yet there’s one big problem: None of them do all that much to save on labor.
That’s long been clear when it comes to self-order kiosks, which if anything increase the demands for labor because consumers order more from them. But it’s likely true for one of the bigger trends in the fast-food space right now: Voice order AI.
Joe Park, chief digital and technology officer for Yum Brands, said that labor wasn’t the main consideration as the company tests voice-order AI. Richard Del Valle, chief information officer for Bojangles, said any labor savings were “on the margins.”
The dream of self-delivery is dead
There was a time not long ago when some restaurants seemed ready to ditch third-party delivery and use their own drivers. The belief was that going that route would give the restaurant more control over the experience as well as better data. But the math just hasn’t worked. Austin-based Tso Chinese Takeout and Delivery once had a large fleet of cars but got rid of them, in part due to high insurance costs, said founder Angell Tsang.
The one exception: catering orders. Many restaurants want to handle those high-value deliveries themselves, said Magdim Mashim, co-founder of delivery tech supplier Cartwheel.
‘Governance’ was a buzzword
AI was by far the hottest topic at FSTEC this year, so much so that one operator proposed turning it into a drinking game. (Thankfully that did not happen as it would have sent most of us to the hospital.)
One offshoot of the AI conversation related to how to secure the data being processed and generated by AI. It was a sign that restaurants are starting to think critically about how to implement the technology. It was also a reminder of the risks involved.
Little Caesars Enterprises created an AI task force to focus on those risks. “That’s a best practice,” said chief information security officer Afia Phillips, “mainly to make sure you have that governance in place.”
Did pizza create high expectations?
One big factor in consumer satisfaction with third-party delivery orders is time. That’s no surprise whatsoever. When orders come quickly, people are generally happy with it.
But the “benchmark” is apparently 30 minutes. After 30 minutes, customers get annoyed.
“I would blame pizza chains in the 1980s,” said Robert Byrne, senior director of consumer research with Technomic. Pizza chains, notably Domino’s, pushed the concept of 30-minute delivery. And now the consumer views that as a good delivery time, even though pizza chains abandoned that idea decades ago.
Test and learn and test again
The importance of testing technology in a real-world setting came up a number of times during the conference, adding a term to the restaurant vocabulary in the process: “RAG model.”
The acronym R-A-G is well known in project management. It stands for Red, Amber or Green, or what actions are suggested by the results of a trial. Should the operation forget about a rollout (Red), deepen the investigation (Amber) or go ahead with a deployment (Green)?
The future is weird
“Is it possible we’re underestimating just how weird and disruptive the next 10 years will be?” So said “futurist” Mike Walsh, who compared the dawn of artificial intelligence to the beginnings of electricity. Bringing electric lights into homes was only the beginning.
The real transformation came as electricity moved into factories, powering the way we work in ways that went way beyond illuminating a room. AI, he said, “will not only change the way we live, it will change the way we work.”
Create an ethics framework for new tech
Catherine Roberts, director, intelligent automation with Chick-fil-A, said the chicken chain has a mission to be the world’s most caring company, so the company has put a lot of thought into developing an “ethics framework” that establishes some guardrails as the use of new tech, like AI, develops.
Chick-fil-A, for example, has never laid anyone off, she said. As they look at using tools like AI, some worry that they’ll automate themselves out of a job.
Instead, Chick-fil-A talks about how people can be “re-potted,” like a plant that is moved but can still continue to flourish.
It helps to be forward-thinking
We were reminded again about the impact of the pandemic on restaurants’ push into technology. Several brands such as Golden Corral made it a major focus after 2020. But we were also reminded that companies that focused on technology before then were at a real advantage when it hit.
Habit Burger & Grill built a customer platform that could work in multiple formats before the pandemic. When dine-in service shut down and companies were forced to scramble, the burger chain was able to quickly get curbside service off the ground because of that technology.
Maybe don’t delay that new tech idea. You never know what’s coming next.
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