Diners these days expect more from restaurants, and the proof is that digital amenities have gone from futuristic novelties to modern necessities in just a few short years.
Chicago-based market research firm Technomic Inc. reported in a recent white paper that several smartphone-enabled conveniences have become important to restaurant consumers. While digital pioneers like national pizza chains are recognized for well-integrated technology, relatively few consumers strongly agreed that a restaurant they recently visited used technology to improve their experience, indicating a big opportunity across the industry.
“Technology-friendly service in restaurants has become important to consumers broadly, and to millennials and Generation Z customers, it’s essential,” says Colleen Rothman, manager of consumer insights for Technomic. “Consumers will continue to look to pizza chains and fast-casual brands for the latest and greatest digital platforms, but they also will expect all restaurants to integrate many technologies that have become a fact of daily life everywhere. Mobile apps for loyalty points and rewards, free Wi-Fi, and mobile ordering and payment will grow more important in the years ahead.”
According to over 100,000 consumers polled by Technomic’s Consumer Brand Metrics program, nearly 2 in 5 called loyalty and rewards programs important or very important to their decision to visit a restaurant. The percentage was even greater among millennial customers, 50 percent of whom called digital-loyalty offerings important for limited-service restaurants, and 53 percent for full-service restaurants. Millennials also attached greater importance than the overall population to free Wi-Fi, online or mobile ordering, and mobile payment, regardless of restaurant industry segment. The implication is clear.
“Being too slow to adopt technology can be detrimental to the operator,” says Rachel Royster, Technomic’s senior coordinator of editorial content. “Consumers are quickly responding to new technology and adding it to their everyday activities. To stay competitive, restaurants should incorporate some kind of technology. Even simple initiatives like partnering with a delivery service like Grub Hub can make the difference in consumer perception.”
Adjusting to the Flow
“In the past few years, we’ve seen a lot of growth in all these areas,” says Ben Sabouri, owner of Shift Hospitality, which develops and manages restaurant and nightlife venues and MTO Café, which has two locations in Las Vegas. “Even though the restaurant experience itself hasn’t changed as quickly as technology, I think everyone has had to adjust the flow of their operations to the speed of tech.”
MTO Cafés accept online and mobile orders in real time while servicing in-store customers. “We have had to adjust to keep both those experiences positive for the guest,” Sabouri explains. “You may have 20 to-go or delivery orders and 20 customers dining in-house. You have to be really aware that half your guests got in a car and drove to have an experience at your place, and you need to keep them happy with short-ticket times and great service. But you can’t let the pickup or delivery orders suffer.” Those customers, he says, have the same expectation “in an even shorter fashion because all they are doing is waiting on a time that you promised their food would be ready by.”
Sabouri has found that “the evolution of technology is a struggle for any restaurant. We are often faced with the question of how to make sure that even with all these amazing tools that let us reach a broader audience, we (can) give them the best experience every time, regardless.” The issue is coming more to the fore, he adds, with the growth of mobile ordering and rewards systems.
“I’ve been watching our mobile ordering grow by double digits over the past few years,” Sabouri says, “to the point where we have had to change systems twice in order to make the process seamless for the guest.”
When it comes to rewards points, Sabouri and his colleagues “look at it as a better version of a punch card on your phone. The value or the offer hasn’t really changed. I do think companies like Starbucks and others have figured out how to tier those points in a successful model. By making me want to get that gold status for my rewards, it does make me think to go there first.”
Erasing Pain Points
“Customers seem to be engaging in those elements that streamline their specific experience with the brand, expedite and erase the typical pain points with that brand, and help them consolidate/organize their lives,” notes David Bloom, executive vice president of business development and strategy for Synergy Restaurant Consultants in Newport Beach, Calif. “For those reasons, brands that rely heavily on delivery, like Domino’s, have been highly successful with the online ordering/order tracking approach.” Brands that rely on a dine-in experience, such as Chili’s and Applebee’s, have been successful with table-top devices that give the consumer things to engage with, like gaming, adding on to orders and expedited payment methods.
Brands like Starbucks and Panera Bread “that depend on frequent, loyal users have been very successful with their focus on organizing and streaming the rewards programs and payment systems,” Bloom says. “It amazes me to see some airports charging for Wi-Fi knowing that their core customer, the frequent business traveler, expects 24-hour access to Wi-Fi.” On the other hand, other airports now have tablets throughout terminals from which customers can order food, check email, book another trip or browse the Internet at no cost. “Which airport do you think frequent travelers would prefer when given a choice?”
Bloom and his colleagues work with many technology companies looking to invest in and enter the restaurant space, and he says they are “amazed at how rudimentary and un-user-friendly much of the current technology is in the restaurant space.” As more technology companies enter the restaurant arena, he believes, “we may see a dramatic acceleration in the speed at which different technologies are introduced, tested and deployed at scale.”
A word of caution may be in order. Hard as it may be to believe today, not everyone is comfortable with technology in a dining-out setting. William V. Eaton, chairman of the board of Cini-Little International Inc., a Maryland-based restaurant consultancy, says he wants “as little visible IT as possible associated with my meal in a restaurant. I want the talent to experiment with the meal and make every one superior to the last while staying true to the principals of the original item. I do not want to order on a smartphone or at a kiosk. I don’t want a robot coming to the table and asking me and my guests, ‘Who ordered the fish?’ They can use as much technology in accounting, social media and for analyzing their results as they can, but don’t take the “culinary” out of dining.”
Restaurants can use technologies most effectively by making sure to choose vendors “that put the emphasis on the guest experience and not the technology,” says Brandon Hull, founder of NextRestaurants, a marketing consultancy. “Too many online ordering platforms, for example, first require an online customer to provide their email address and select a location before ordering. Those are two things that don’t happen in the real world of the dining experience. Mimicking that experience is extremely important for the foreseeable future. It’s about speed and patron convenience.”