Anyone who has ever called their cable company has almost certainly spoken to a voicebot (for better or for worse).
It’s not a new concept. But it’s somewhat novel for the restaurant industry, which for most of its existence has relied on human workers to answer the phone.
The pandemic and its fallout have changed that, and a lot of other traditional restaurant practices besides. Staffing is harder, goods are more expensive and restaurants are racing to adapt as their outlook grows increasingly bleak.
The situation is giving rise to some technologies that have become commonplace in other industries, but would have seemed irrelevant or downright antithetical to the restaurant business even a few years ago.
Here are three examples.
AI voice ordering
Voicebots are coming to replace humans on phone lines and drive-thru squawk boxes at restaurants across the country.
Don’t believe me? Just ask Danny Meyer, the prominent New York restaurateur-turned-investor whose PE firm, Enlightened Hospitality Investments, just took a $10 million stake in an AI voice company.
The company, ConverseNow, claims to be the market leader in the space, with 1,200 restaurants in 40 states using its technology. Its revenue increased twelvefold last year, and though it only has three customers, one of them is Domino’s. It promises to boost sales and ticket size and reduce labor costs. It’s only problem right now, the company says, is too much demand.
$10 million from EHI, plus the guidance of new board member Meyer, should help it keep up, and suggests we’ll be hearing more from its voicebots soon.
ConverseNow, by the way, is not the only company of its kind poised for growth. Presto, which offers a similar product, is preparing to go public via SPAC sometime this quarter.
Though the agreement was recently restructured at a much lower valuation, it’s still on track to happen, which can’t be said for a lot of SPAC deals these days. And the capital generated from a public offering is likely to vault Presto and its AI voice assistant into more restaurants.
Remote staffing
Instead of having a robot work the drive-thru, restaurants can now hire a human to do it—from home. Startups like Bite Ninja and Percy are offering the technology and labor pool to make remote work a reality for restaurants.
Let’s start with Bite Ninja, a startup founded in 2020 by Memphis restaurateur Will Clem. The company allows restaurants to hire its “Ninjas” to work the drive-thru or counter via webcam. On Tuesday, it raised $11.3 million from a group of investors that will help it continue scaling. And it has apparently already landed some big clients: Bite Ninja said five of the top 20 U.S. fast-food companies plan to use its system. It’s also targeting restaurants overseas.
The goal is to ease operators’ staffing woes, but selling outsourcing to customers could be a challenge. Toronto-based Percy and its biggest client, Canadian salad chain Freshii, faced backlash after it was reported that Percy’s “virtual cashiers” beam in from call centers in Nicaragua and Pakistan and make as little as $3.75 an hour.
Percy responded with a tweet thread saying that it wants to address restaurants’ labor shortage without removing humans entirely. “Percy’s global workforce currently has employees in several countries, including Canada,” it said. “We pay all team members above their local minimum wage.”
Bite Ninja workers make at least $15 an hour, according to the company’s website. Still, Freshii’s public relations problems raise questions about the viability of this labor model for restaurants.
Dynamic pricing
The price of a hotel room, flight and Uber ride can fluctuate depending on the day and time. Why can’t the same be true for a cheeseburger? The idea of adjusting prices based on demand is gaining steam in the restaurant industry as costs rise and profits fall.
At least two startups are working full-time on bringing so-called dynamic pricing to restaurants. The similarly named Sauce and Juicer each offer software that ingests data like competitors’ prices, food costs and even the weather to predict demand and update a restaurant’s online menu prices in order to maximize profits.
The 2-year-old Sauce was founded by MIT grads Colin Webb and Nenye Anagbogu. It’s focused on restaurants’ delivery prices, and its current clients are primarily virtual brands, Webb said at the National Restaurant Association Show in May, where Sauce was featured in the event’s “Startup Alley.”
Three of Juicer’s four co-founders come from the hotel and travel industry, including Drew Patterson, a founding member of the booking site Kayak. Dynamic pricing is a given when buying a flight or a hotel room as those businesses look to capitalize on fluctuations in supply and demand. Juicer wants to bring the same function to restaurants.
“In the restaurant industry, we have limitations on the amount of food that can be prepared and the time to prepare it, so it’s logical that some form of dynamic pricing should be employed as well,” its website says.