By Laurent May
In the business and tech worlds, the word “disruption” gets tossed around a lot — usually with positive connotations, as when a new innovation changes an industry for the better. The world in general has seen major disruptions over the past couple of years, and not always the good kind.
As has been the case with every other sector, the restaurant industry continues to be hit hard by the COVID-19 pandemic, to say nothing of labour shortages, supply chain issues, and rising inflation. It’s been a bumpy ride.
What do the next 12 months hold?
Well, there’s some good news and there’s some bad news, according to the folks whose job it is to make such predictions. In its “Economic Outlook” for the first quarter of 2022, S&P Global projects that Canada’s GDP will grow by five per cent, and that the country will return to full employment.
That’s the good news, of course, but there are a few 2022 predictions that should give those in the restaurant business pause.
According to Canada’s Food Price Report from Dalhousie and several other Canadian universities, for example, we can expect restaurant prices to rise by six to eight per cent in 2022, which could certainly dampen consumers’ enthusiasm for dining out.
None of this is a foregone conclusion, of course. After all, who knows what further disruptions, good or bad, may be on the horizon? One thing is certain, though — the unprecedented widespread adoption of technology we have observed in the hospitality sector is unlikely to slow down. That’s a good thing, because going high-tech just might be the very thing that keeps restaurants going through the uncertain times ahead.
Welcome to the machine
It would be hard to overstate the impact that the COVID-19 pandemic had on the implementation of new technologies in the hospitality industry.
In 2022, going high-tech is not optional for restaurant operators; it’s an absolute must. Safety concerns in the COVID era drove the adoption of contactless tech — and brought the QR code back from the brink of extinction — but digital is now the status quo. Self-ordering and self-payment options have transformed many of the traditional touchpoints in the dining experience, and there’s no going back now.
In fact, it’s no exaggeration to say that more and more of the business of running a restaurant is becoming high-tech, automated, contactless, and put in the hands of the customer. This is a boon, not just to guests, who enjoy having a degree of control over their own dining experience, but potentially to servers as well. Given the ongoing challenges of finding and retaining service staff, anything that improves the employee experience can be considered a win.
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Freed from having to manually place orders or take individual payments, servers will be able to add significant value by focusing more on relationship-building with guests and less on logistics. This can ensure that the crucial human element doesn’t get lost amid all the shiny new technology. It can also lead to an increase in tips. Stats show that restaurants that have implemented guest-focused technology see tips that are consistently up to 26 per cent higher than those relying on traditional service models.
Thank you for being a friend
Food is getting more expensive. As Canada’s Food Price Report notes, “Menu prices at restaurants are predicted to increase as businesses contend with rising food prices, rising commercial rents and labour market challenges.” As they are here, restaurant prices south of the 49th parallel are rising at a higher rate than prices at grocery stores. The U.S. Department of Agriculture forecasts that food-at-home prices are expected to increase between 1.5 and 2.5 per cent this year, with food-away-from-home prices going up between three and four per cent.
One strategy to win back and retain customers in this time of soaring prices is to reward guests for their loyalty. At many restaurants with pay-at-the-table solutions, high-tech loyalty and reward programs are integrated into the checkout process, allowing diners to collect and redeem rewards automatically when paying their bill, via an easy-to-use self-service interface at the point of payment.
It’s an incentive that evidently works. In one recent survey, 69 per cent of respondents said loyalty programs incentivize them to frequent a restaurant more often. These customers said that they appreciate receiving personalized deals and coupons; that being a loyalty member leads to their orders being available upon arrival; that they receive better prices; and that they are thanked for being a loyal customer.
The choice is yours
The next big disruption in restaurant tech might well be the ascendance of the droids. I’m only half-joking. Make no mistake, the robots are indeed coming. In fact, many of them are here now, with meals already being cooked by machines and delivered by self-guided drones. This may all seem like the logical next step — or maybe a step back to the days of the automate — but it can only go so far. An impersonal, fully contactless experience isn’t what guests are hungry for. They want more convenience and control, sure, but most are still craving a connection.
We have heard a lot about the hybrid approach to work in recent months, and a high-tech hybrid model could also apply to the restaurant experience. For some, the convenience of contactless tech enhances dining out, but people also like having a choice. When it comes to ordering and paying, guests appreciate options. While many may like to do these things by using their own phones or a restaurant’s built-in tablets, others want the option of interacting with other humans.
There are also doubtless some who would prefer to interface directly with the kitchen and pay their bill through a chip implanted in their prefrontal cortex. Those folks are going to be out of luck in 2022. Maybe next year.
Laurent May is the CEO of Ready, a fully integrated mobile self-ordering, payment, and loyalty technology solution that’s defining the next generation of hospitality venues. He has over 20 years of product management expertise in the electronic payments space leading high-performance teams.