By Dan Stock
What does the restaurant of the future look like? It’s a question we think about every day at Mr Yum.
The past 18 months has radically changed how restaurants operate, with hospitality businesses facing the biggest challenge to their survival they’ve yet faced.
The behaviour of both consumer and owner has changed and returning to the “old normal” isn’t an option. Much like how eCommerce revolutionised retail after the GFC, the pandemic has forced hospitality to become “bricks and mobile”. They won’t go back.
But how will these changes play out? What does that mean for the industry? And how can operators get ahead of the curve?
Digitisation will not only draw the outline of the restaurant of tomorrow, but will colour it in. Hospitality has historically been slow to adapt to technology and innovations - let’s face it, the traditional static, printed menu hadn’t changed much in 350 years until the smartphone came along - but out of this crisis we’ve seen owners adapt their business overnight and embrace the power - and opportunity - that technology can provide.
There are some core technologies that are disrupting the hospitality sector and will shape it in the years ahead: automation, artificial intelligence, robotics and virtual reality.
Across the globe, restaurants are struggling to attract enough staff to allow them to open as many hours of the day or days of the week as both they and their customers would like. This staff shortage crisis is accelerating the move towards digitisation and automation, with technology taking rote tasks off both front- and back-of-house staff, allowing them to focus on providing an exceptional customer experience.
Using digital products and platforms to drive revenue and maximise profitability will be a feature of the successful restaurant of the future. Such things as the increasing adoption of mobile ordering, the growth of “hospitality at home” (restaurant-quality delivered meals) and even self-driving robot delivery and distribution will offer the customer greater choice and convenience and operators new and growing revenue streams.
In the US, for instance, digital sales are expected to make up more than half of limited service restaurants’ business by 2025 - a 70% increase on pre-COVID estimates - while a Deloitte survey of US diners found that 58% preferred to order digitally on premises at a Quick Service Restaurant, and 70% prefer to order digitally for off-premises and delivery.
In the UK, according to one study 45% of diners want to see technology play a bigger role reducing errors in the dining experience and 46% prefer contactless ordering and want to see businesses across the industry continue adopting this technology. As diners become increasingly comfortable adopting and using this new tech, these figures are expected to rise.
Menus will therefore become more streamlined and optimised for digital devices along with the increasing implementation of such things as 3D visual menus, and the holographic representation of dishes.
Virtual reality will become increasingly part of a dining experience - from dedicated VR gaming cafes to fine diners being taken on a chef’s journey of inspiration and discovery of each dish. This technology offers a niche and often high-end experience but will eventually become more widely adopted as the technology becomes more refined, sophisticated and seamlessly integrated into a restaurant setting.
Robotics, driverless vehicles and drone technology will transform the restaurant delivery experience. In the UK, for instance, Starship uses autonomous robots that deliver food and packages within a 6km radius and has already completed more than 1 million deliveries in less than a year
The pandemic has encouraged increasing mainstream adoption of streamlining technologies and realising their full potential will be key to restaurant success. Whether increasing productivity, reducing errors or capturing data to personalise the customer experience, return on investment from technology can be substantial and can be the difference between success and failure.
Digital is here to stay, from ordering to payment. To truly engage diners, restaurants will have to create digital experiences that are enjoyable, intuitive and encourage repeat business and loyalty - while simultaneously tripling down on the valuable human interactions.
There are a few key ways the restaurant of the future will do this.
Successful operators will focus their tech strategy to capture as much digital data as possible in order to personalise offers, segment customers and influence behaviour. A mobile-first / mobile-only approach maximises their opportunity to learn about their customers and offer them a personalised experience. In this new world, data security and privacy compliance is key.
Data-driven insights will shape the dining experience by remembering past orders and suggesting new experiences. Just as when shopping online today preferences and browsing history refine retailers’ retargeting efforts so, too, will dining out become progressively tailored to individual tastes.
Online/mobile ordering platforms can help refine the customer experience by remembering preferences, and provide restaurants with customer data that, in turn, can be used for customised, sophisticated and keenly targeted marketing campaigns.
We call this frictionless personalisation.
Menu browsing and order history can be used to offer specials and inducements to returning customers. A diner who regularly orders steak might be offered a glass of red wine on their next visit, someone who changed their order at the last minute might be offered a special deal on the dish they didn’t try, while those with dietary restrictions can be targeted with focused offers and communication - no “Sunday roast” emails sent to a vegan, for instance.
Customers will increasingly want technology options that recognise and reward them.
Facial recognition technology can help create personalised restaurant experiences, recognising opted-in diners as VIPs upon entry, with ordering and cooking preferences as well as loyalty discounts automatically applied.
This technology is already being deployed in fast-casual restaurants, with KFC in Beijing, for instance, using it to remember customers’ favourite orders.
QR technology, meanwhile, will continue its move into payments in Australia, following the lead of China and India. Global mobile payments are forecast to rise from USD 348 billion to USD 1.3 trillion by 2022. Chinese payment app Alipay is the world’s most used payment app (outside of social networking apps), with 15 million businesses accepting Alipay’s QR code payments in China.
The Internet of Things - the network of software-connected objects - and advanced analytics will improve a restaurant’s ability to forecast daily consumer demand and changes in diners’ eating habits. This has direct implications for a hospitality business’s bottom line.
Technology will never take away the humanity of hospitality.
But by embracing the restaurant of the future today, the industry has the best chance of not only surviving, but thriving.
Dan Stock is senior communications manager at Mr Yum.