Restaurant Technology 6 Game-changers You Need to Know About This Year

What is Restaurant Technology?

Restaurant technology essentially refers to software programs, equipment, and online platforms that allow businesses to be run with a degree of efficiency that was unknown before.

Technology came to be adopted by restaurant owners in order to improve customer satisfaction and increase profits. As the restaurant industry evolved, technology started to be used more and more to give businesses a distinct competitive edge.

Then came the COVID pandemic and what was seen as a means to boost production became an indispensable element to keep restaurants in business. The rampaging coronavirus forced millions across the world to stay indoors and restaurants to pull down their shutters, frantically searching for alternative ways to earning. A wide leap from physical to digital held out hope for COVID-hit businesses.

Customers found the online experience safer and more convenient, and soon tech-enabled dining became a way of life. Food businesses quickly fell in line with the changed reality. Indeed, as pointed out by a Deloitte study from 2021, the restaurant of the future had arrived well before time.

The early months of 2021 saw the most advanced phase of the restaurant industry's digital transformation, with many customers still practicing social distancing. Then even as the COVID vaccine was rolled out and customer mobility picked up, restaurants retained much of their online clientele, while devising omnichannel strategies to offer various types of ordering experiences like online, on-premise, and phone-based.

Should Restaurant Businesses Invest in New Technologies?

Investing in restaurant technology is a wise decision on the part of restaurant owners because it streamlines business functioning, saves the business time and money, and enhances customer experience. As discussed in the preceding section, the COVID onslaught has made restaurants realize that they cannot ignore technology.

Let's now review the technologies restaurants have been employing and look at how they have benefited from them.

Technology is used from the start to the end of a food operation- employed in the front of the house, the back of the house, and for doorstep delivery.

The main technology that restaurants use at the front-end is the point of sale (POS) system. Modern POS systems integrate with various other systems, including those at the back-end like inventory management, workforce management, supply chain management, time and task management, and business intelligence systems, making restaurant management a seamless, interconnected exercise.

Cashless payments through credit/debit cards, contactless payment through mobile wallets like Apple Pay and Google Pay, self-service kiosks, QR code-based ordering and payment, ordering through the restaurant's website or third-party apps, curbside pickup, drive-thru, order and pay, grab and go, food lockers, and indeed, delivery of food through robots and drones have all served to reduce human-to-human contact to a minimum, which is a COVID necessity. These cutting-edge technologies have made the experiences of all parties concerned incredibly simple and convenient and have helped restaurants quickly recover from the COVID maelstrom.

Restaurant operations are also made more efficient through kitchen display systems (KDS) that flash orders to the back-office staff the moment they are fed into the restaurant pos software, cutting down wait time. This, along with digital menu boards, online reservations, and customer relationship management systems has improved guest experience dramatically.

Restaurant inventory management software, moreover, allows businesses to save money, prevent food waste, and ensure that restaurants always have adequate stocks to fulfill demand. With the help of restaurant inventory management software linked with POS systems business owners receive alerts when stocks deplete and the software can even be primed to automatically place orders.

Another key management tool used by restaurants covers reporting and analysis, which falls under the ambit of business intelligence technologies. This involves a range of data collected from different sources and then analyzed by a business intelligence platform to better inform business decisions. For instance, the analysis of data can help construct effective restaurant email marketing campaigns and loyalty programs. Business intelligence data also allows restaurants to predict demand and purchase stocks and schedule/recruit employees accordingly.

Smart workforce management software allows shift schedules to be made easily, gives managers the bandwidth to immediately respond to employee requests, and improves communication between managers and employees.

Cloud-based restaurant management software, moreover, ensures that businesses can be run and monitored in real time, on any handheld device, from any location, and at any time.

Let's now take a look at six restaurant tech trends sweeping the industry.

Restaurant Tech Trend No.1- Online Ordering and Third-Party Apps

One of the biggest reasons the restaurant industry did not run aground during the pandemic was the expansion of online food ordering and contactless delivery.

Incidentally, online food ordering and delivery was already popular before the pandemic. As pointed out by management consulting agency Technomic in a 2019 study for the National Restaurant Association, 91% of polled customers had ordered through a restaurant's website or app, while 60% used a third-party agency like Grubhub or DoorDash.

Attuned to the demands of customers, 93% of restaurant operators delivered themselves, while 66% supported third-party delivery platforms. The study also revealed that 74% of food businesses had put money into off-premise initiatives.

Apart from the necessity created by the pandemic, the obvious convenience offered by online ordering and delivery, and their easy integration with third-party apps led them to be widely embraced. Online orders could be placed from the comfort and sanctuary of one's home and as pointed out by the Technomic report, according to 35% of customers, restaurant websites and apps allowed orders to be customized in a better way. Moreover, 35% of customers said ordering on third-party websites or apps was a quicker alternative.

An added advantage of online ordering and delivery and third-party integration is that it lets restaurants significantly expand their customer base and even serve customers who are located at a distance or are unable to physically visit the restaurant.

Online food delivery revenue in the US, according to Statista report, is expected to be worth $63.02 billion in 2022 and $96.5 billion by 2027, expanding at a compound annual growth rate (CAGR) of 8.9% from 2022 to 2027.

Restaurant Tech Trend No. 2- QR Codes

QR codes are matrix barcodes found on dining table placards, posters, coasters, and walls/doors of restaurants. These can be scanned with smartphone cameras to place orders and make contactless and cashless payments.

QR codes are digitally linked to mobile wallets and do away with the risks of cross-contamination that may arise from handling menu cards, coins, and banknotes. It aligns with social distancing norms and is a user-friendly way of ordering and paying.

QR codes have allowed food businesses to introduce interactive digital menus. These menus allow customers to order and pay in a contactless manner from their smartphones, without having to download third-party apps. They are infinitely more convenient than bulky physical menus or even links that need to be manually keyed in to access a food list.

No longer limited to takeout and delivery, QR codes have made online ordering an active feature of on-premise dining, and have allowed restaurants to function efficiently despite staff shortages. They also allow customers' past orders to be tracked, on the basis of which restaurants can upsell products and services and provide diners the option of easy reordering.

The growing popularity of QR codes can be gauged from a study by market research and forecasting firm Juniper Research. According to them, global spending through the use of QR codes is expected to cross $3 trillion by 2025. According to another study by Hospitality Technology, a predictive intelligence and media resource, 66% of restaurants offer QR codes right at the dining table to allow customers to look up menus.

Proving their popularity, a study conducted by POS company Square, titled 'Future of Restaurants', says 88% of restaurant businesses are keen to make a complete shift to digital menus.

Restaurant Tech Trend No. 3- Kitchen Displays

Kitchen display systems (KDS) are digital boards used to convey customer orders to chefs at the back of the house the moment those orders are fed into a POS system. Kitchen display systems can work remotely thanks to their integration with cloud-based POS software.

Waiters now no longer have to run back and forth between the front- and back-end to convey online and dine-in orders to chefs. Kitchen display boards streamline restaurant back-end operations by automatically and clearly displaying orders, doing away with confusion arising from smudged order tickets or illegible scribbling on notepads.

KDS boards also ensure that orders can be displayed in terms of priority and that special dietary requirements and requests are duly flagged. This results in a high degree of accuracy in meal preparation.

Furthermore, since orders reach the kitchen almost as soon as they are placed, wait time is also greatly reduced and meals can be churned out quickly. With the help of KDS boards, the time required to deliver meals can be tracked and stock levels can be monitored with alerts sounded when stocks deplete.

Restaurant Tech Trend No. 4- Automated Delivery at Drive-Thrus

The drive-thru is an innovative restaurant technology that lets customers be served without having to leave their cars. Given that it involves minimal touch-points, the drive-thru is considered to be one of the safest dining options at a restaurant, in addition to making the guest experience a convenient one.

What was a mode of convenience before the pandemic, became a safety exigency after COVID struck. As a result, the demand for drive-thrus surged and continues to hold strong. According to the Deloitte survey mentioned earlier, 37% of respondents said they preferred drive-thrus when ordering. Bluedot, a company that provides geofencing technology to restaurants, said drive-thru visits rose 36% from early COVID days.

Brands like McDonald's, Burger King, White Castle, Fair Oaks Burger, Shake Shack, BurgerFi, and others actively embraced drive-thru technology. However, simply setting up drive-thrus proved to be insufficient.

As demand soared and drive-thru lanes became busier, wait times increased, which tended to make customers impatient. According to a 'Pulse of the Industry' study by restaurant technology platform Presto, long wait times and worsening service were highlighted as two of the weak points of the drive-thru. As many as 70% of the respondents called for technologies like artificial intelligence or AI-powered voice assistants, smartphone apps, and personalized menus to improve the drive-thru experience.

In response, restaurants have started to automate their drive-thrus. Fast food behemoth McDonald's, for example, will partner with IBM to develop drive-thrus with automated order-taking (AOT). McDonald's launched computerized order-taking at several locations in Chicago, and the implementation of voice-ordering technology led to around 85% order accuracy. In fact, McDonald's was able to reduce its drive-thru wait time from 6.18 minutes in 2019 to 5.49 minutes a year later, revealed market research organization SeeLevel HX.

The drive-thru automated ordering system implemented by restaurant chain White Castle is based on AI voice technology and is linked to a digital menu board. The AI can take orders and even proffer food suggestions. The company also plans to use a technology that would allow it to recognize the license plates of customers' cars in order to personalize orders.

One of the key elements of using AI successfully at a drive-thru relates to automatic speech recognition. This feature will continue to grow sharper as AI models use data points from thousands of daily orders at drive-thru windows to make themselves smarter and more intuitive.

Restaurant Tech Trend No. 5- Online Table Reservation

Restaurant reservation software has made the practice of dialing a restaurant for table bookings redundant. Platforms like Eat App, OpenTable, and Tablein allow customers to reserve slots on the fly.

On the other hand, table reservation software benefits restaurant businesses by allowing them to manage waitlists, seating layouts, customer loyalty, and dining preferences -- all on a single platform. Table reservation technology also helps gather valuable customer information that can be used for contact tracing and market analysis. Automated table booking schedules can also lead to an increase in efficiency, particularly in times of labor shortage.

Online table booking also helps prevent double-booking and over-booking. Restaurants with overworked or insufficient employees are prone to blunders, which can ruin the guest experience. By freeing employees of the task of attending to reservation calls, automated table booking ensures that errors are minimized.

Restaurant Tech Trend No. 6- Cloud Kitchens

A cloud kitchen or ghost kitchen is a unit whose focus is to prepare food solely for takeout and delivery. There is no on-premise dining, no storefront, dining room, or staff at the front of the house. A cloud kitchen, therefore, exists entirely in the online space, taking orders from its own website and from third-party food aggregators. Customers may also place orders on the phone at a central call center, which then diverts the order to the nearest cloud kitchen.

The popularity of cloud kitchens increased during the pandemic as brick-and-mortar restaurants shut down and customers took to online ordering. Cloud kitchens have greatly reduced labor costs as they don't need to employ a whole posse of employees and can do away with servers, bussers, and hosts. This system also allows businesses to effectively handle labor shortage.

A cloud kitchen has several avatars. It could be a standalone unit offering a limited number of menu items. It may work for virtual eateries that play entirely in the digital realm and can only be accessed through apps and websites. These online restaurants make use of the kitchens of established brick-and-mortar eateries and offer different menu items from those offered by the host restaurant.

Furthermore, several food businesses can be hosted together in a large kitchen space. Separate kitchens in this coworking space may be dedicated to different restaurants, while cleaning and storage facilities could be the same. Alternatively, a restaurant brand may rent a kitchen for its sole use. There are also aggregator cloud restaurants and those managed by individual operators.

The POS system used by a cloud kitchen, therefore, must be compact and support mobility if it has to be taken to the customer's residence to process payments. It must also support integration with third-party apps for ordering and delivery.

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