Restaurant Industry Technology: Lessons from the Past to Pave the Way for the Post-COVID Future
December 22, 2020
For a variety of reasons, the restaurant industry has been late to adopt technology. Even larger chains have been slow to embrace improvements in what is obviously a critical area.
Being late adopters of technology has been a double-edged sword for the restaurant business. On the one hand, we haven't wasted dollars on technology that didn't serve us well and quickly became dated; on the other hand, we have arguably missed maximizing efficiency and profitability by not incorporating the best of emerging technology.
With events and innovation moving so fast in the technology sector, the restaurant industry is a little like the developing country that never got their telephone landlines firmly entrenched. Then, cellular suddenly arrives and makes the landlines completely unnecessary.
Because the restaurant industry was so late to the tech party, we may avoid a lot of expense associated with technology that quickly becomes obsolete, much like jumping to cellular and avoiding the now unnecessary landline. The restaurant industry technology learning curve may be much steeper and shorter too. Because of these two factors, our tech dollars can be spent much more wisely.
Below I explore how technology in the restaurant business has exploded in the last ten years. In short, technology has helped to connect consumers to restaurants, while making industry adopters of technology more profitable…. in other words, there are a lot of lessons here for restaurants to harness technology to help them move past COVID.
Technology Ten Years Ago in the Restaurant Industry
In 2010, while serving as CEO of Bubba Gump, we sold the international chain to Landry's. At the time we had state of the art financial software, the best IT consultants we could find and our analytics were described as "Excel on steroids."
These were all tech improvements for the managers and operators, but did not directly enhance the customer experience.
Additionally, the best communications tools we had at the time now seem slow and cumbersome. Back then I pointed to my Blackberry as the shining example of our best communications technology.
Because I had every person in the company down to the General Managers on them. I could communicate instantaneously with every decision-maker in the company by a simple All User email. And I could do it from anywhere. I could learn from my people as well.
At least I got that part right.
I was not a technophobe. In fact, I believed in data and I was more than comfortable with sophisticated analysis. But, aside from the communication aspect, I was having a real problem connecting technology to improvements in the customer's experience or the company's profitability.
Looking back, our chain wasn't an aberration; the industry as a whole was way behind other industries.
When I was told we needed this or that technological bell or whistle, I used to say that we could produce financial statements on a laptop. When I was told that a new system would cost $250,000, I responded, "That's a lot of Shrimp Cocktails…"
Somewhat jaded by ever-changing technology that never quite helped the consumer, ten years ago I often repeated the adage, "There are two kinds of technology- obsolete and not invented yet."
Technology Today in the Restaurant Industry
Flash forward ten years to 2019 and I was the CEO of a different company. We were using sophisticated geo-targeting to track customers and make real estate and marketing decisions. Social media and digital made up the majority of our advertising spend. We had several tablets spitting delivery orders. Our back office software was giving us ideal usage and food cost and was seamlessly interfacing with our purchasing.
The various loyalty programs we studied could essentially tell us all about the customer's activity from their first visit and we could have them sign up with their phones. In fact, we could do the whole loyalty program with phones or on tablets placed on the table.
Those same tablets could double as menus and accept credit card payments- people could play games on them as well. Our WiFi provider could snag customer's email and phone numbers on an "opt in" and, among other things, we knew their frequency.
Our video systems could show us the state of operations and compliance in the kitchens and dining rooms. We could make and download training videos to the restaurants whenever we wanted. Recipe and menu changes could be done much more easily and efficiently.
For starters, our industry simply started to catch up with the rest of the business world.
More importantly, technology improved significantly in the last ten years, becoming more user-friendly and practical. Between geo-targeting, loyalty programs, seamless training integration, and data on everything from food usage to pricing models, technology made the restaurant industry, or at least those who adopted the technology, more efficient and profitable.
Another good example is labor scheduling software. Creating and posting schedules was pure drudgery to most restaurant managers and took up way too much time. With software like HotSchedules, scheduling became much simpler and efficient.
Embracing Technology to Move Beyond COVID
Generationally, the people who make up the industry have changed noticeably in the last ten years. The current group view a computer the way previous generations viewed a toaster - that is, obsolete and unnecessary, or like a landline. The younger generation wants to know why operations can't all be done on a smartphone.
And they are not wrong.
If necessity truly is the mother of invention, then COVID may be the tipping point. We may salvage something good from the pandemic and that something could be a full embrace of technology in the restaurant industry.
Over 100,000 restaurants of all kinds have closed in the past 12 months. An industry heralded for its adaptability has had to change more rapidly than ever. It is truly survival of the fittest and adapting to technology is a big part of that.
The industry has only begun to scratch the surface, particularly with the use of AI to assist or even take the lead on menu, promotion, cost management and off-premise.
A very smart millennial told me a couple of years ago, "If I could, I would have Google's search implanted in my brain…" I was taken aback at the statement but I am wondering just how far off that is.
Reach out to me to learn more about how the restaurant business can harness technology to survive COVID and thrive in the months and years beyond.