Revolutionizing the Restaurant Technology Ecosystem
Today’s customers expect a lot from their restaurant experience, with the added burden of ingredient transparency and rising expectations around convenience and seamless experience.
Restaurants of every size are facing a number of unique and prolonged challenges amidst a turbulent economy and lingering pandemic crisis. Brands and operators that were already heavily invested in digital service methods are flourishing, while those lagging in digital have had to make quick pivots to remain viable — often at the expense of eroding customer loyalty and sacrificing the bottom line.
Seeing as how many customers have made the adoption leap out of necessity, the term “omnichannel” ordering and delivery can simply be referred to as “ordering” now.
Why is this so hard?
During the “Burger Battles” of the ‘80s, the differentiator was speed and consistency versus personalization and customization. Today’s customers expect all of the above, with the added burden of ingredient transparency and rising expectations around convenience and a seamless experience.
For large multi-unit franchises that saw explosive growth during the turn of the century, some of the key technology decisions made back then have them reeling today:
- Antiquated hardware: Store systems were connected to the “Internet” but with traditional client-server architectures.
- Dated and complex user interface designs: Revolutionary electronic touch-based interfaces eliminated the need for paper tickets on kitchen lines.
- Underutilized space amid COVID: Redesigned dining rooms accommodated customers’ desire to congregate and enjoy a dine-in or café experience.
Fast forward two decades and the restaurant industry has seen tremendous growth. Yet the per-unit economics are completely different than they were in the past. Increased competition, rising labor costs and changes to consumer expectations have made it extremely difficult for large quick-service restaurants (QSRs) to remain profitable. Every major brand is seemingly one crisis away from having to close multiple restaurant locations. Convincing franchise owners to pay more for technology or CEOs to make significant investments in technology has been a losing proposition for most QSR CIOs.
Further enabling the explosion of restaurants has been the widespread availability of small footprint in-store technology that’s easy to use and has a very low cost of entry. These restaurant technology platforms were born out of startups and very quickly acquired or received well-funded rounds of investment to reach explosive heights in the mid 2010s. According to a recent study referenced in Forbes, the restaurant point of sale market is expected to eclipse $25 billion by 2024.
There are better, faster and cheaper technology options available for restaurants. But depending on the size (and voice) of your franchise community and your ability to support in-store technology change, tackling this problem may be much more involved than a standard hardware refresh.
What is a large multi-unit restaurant brand to do?
Contrary to the popularly held belief in the mid-2010s, building a mobile app may not always be the key to unlocking growth and profitability. When studying the QSR brands that have catapulted their competition, or even smaller brands who consistently punch above their weight class, a few trends emerge that large multi-unit restaurants can use as a roadmap:
- Create a scalable and flexible technology ecosystem.
- Craft an amazing customer experience.
- Simplify operations and improve speed of service.
- Use technology to drive down operational costs.
- Capture data and quickly translate it to measurable value.
Key considerations for getting started
We understand that the core challenges most restaurants face involve the convergence of two opposing forces:
- Physical vs. Digital: How can technology enable a more seamless experience while customers within your store interact with store personnel or forgo interaction altogether?
- Business vs. Technology: How can technology drive incremental profitability while reaching new audiences and enticing them to enjoy the latest menu item?
- Strategy vs. Execution: How can technology simplify operations for store personnel while arming them with valuable insights to make more timely and actionable decisions?
Our WWT Digital practice has worked with QSR brands of all different sizes and at various stages of digital transformation. Each new experience informs our customized approach, with strategy fueled by each brand’s unique business objectives and desire for technology to drive organizational and operational change.
While addressing the need for contactless service options amidst a pandemic may solve the near-term crisis, perhaps the more pressing need for restaurant brands is to address why making this pivot was so difficult in the first place. Restaurant technology has evolved significantly, even in the last 10 years, and every brand should be evaluating how technology can serve as an enabler for growth rather than an inhibitor for adaptability.