In my many conversations with restaurateurs from all corners of the world, I have been inspired by the creativity and entrepreneurial spirit of our industry. We are seeing full-service restaurants opting to partner with ghost-kitchens to supplement their take-out business. Others are opening new revenue channels by offering their facility and staff for other brands. Some are creating meal-kits and expanding retail offers and new ways of conducting fully contactless interactions.
For every ten ideas, we can expect several will prove unsustainable, unprofitable or otherwise not in the best interest of the brand. So as quickly as restaurants spin up new offers, they need to have the same speed and agility to pivot quickly away from concepts and partnerships that are not delivering quick and/or material returns. Here are five considerations that should be top of mind for all operators:
Many restaurants scrambled to spin up delivery-services during quarantine to keep the doors open and serve their communities. Likewise, many people who never before used delivery services jumped-in due to necessity. While this served the immediate need, a data-driven approach in how businesses engage and leverage third-party delivery service providers will be essential to long-term success.
Brands may need to consider pulling back where possible given the importance of maintaining the customer experience and information, brand integrity and bottom-line performance. Brands that do continue leveraging third-party delivery services will need to regularly assess partnerships and dynamically manage which channels are right for an individual order based on business criteria. For example, if the delivery is to a loyal customer, a brand new customer, or within a certain proximity to the restaurant, the brand may opt to retain the transaction from end-to-end to ensure brand integrity and make a positive first impression.
A more streamlined flow of customers and staff also necessitates rethinking a restaurant's menu and analyzing inventory performance. It will be especially important to understand which menu items can be adjusted (or removed) to optimize costs or handle unexpected supply chain issues. This information can be used to place more accurate orders with suppliers and identify what can be removed from an order to allow for a reduction of waste.
The National Resource Defense Council estimates US restaurants generate between 22 to 33 billion pounds of food waste each year, with between 4 and 10 percent of food purchased by restaurants wasted before reaching the consumer. Restaurants who can effectively reduce this number with effective supply chain and inventory management have an opportunity to make up some of the deltas in lower footfall and sales.
Contactless continues to rise in importance worldwide. This includes rethinking standard menus to reduce their reuse or going entirely digital. Restaurants are adopting mobile order and pay with various degrees of sophistication, one of the simplest models being a QR code that surfaces an app-based or online menu and payment via mobile wallet. While contactless payment is already widely accepted internationally, the US remains behind the curve and will need to accelerate its adoption of EMV. Restaurants with tablet POS or kiosk-based payment systems are looking at everything from manual sanitation after each use, to applying a self-cleaning adhesive film to the touch screens.
We are seeing the hard truth about running at reduced capacity – balancing safety, customer satisfaction and margin performance are challenging. Increasing the number of covers a restaurant can turn while balancing the staff required, will be more data science and technology than art, for the foreseeable future.
The industry has been slow to adopt restaurant analytics that tracks key statistics like 'meal production by hour' - this will be important in keeping restaurants efficient and profitable. Owners of table service restaurants will need to maximize their footprint, utilizing in-house and outdoor space to balance covers with social distancing guidelines. This will require careful orchestration as potentially fewer servers hustle across a larger area. Table service will need to be fast and efficient to account for new models such as order ahead, pre-set dining times and limited service hours. Considerations like menu, payment and delivery services, kitchen flow and inventory all need close assessment on a near-daily basis.
As the industry starts to rebound and reimagine the restaurant experience, we are likely to see a plethora of new technology providers and platforms borne out of specific regional conditions that have global application and relevance. Brands with an open API strategy and architecture can quickly embrace and integrate a new technology that can move their business forward. However, all these new technology endpoints and an ever-increasing online transaction volume will make the industry an attractive target for hackers. Understanding restaurant point-of-sale (POS) security protocols and personally identifiable information (PII) protection will need to be at the forefront consideration for restaurants to protect customers and their brand.
The volume and variety of data will increase, from in-house operations to macro trends, supply chain and economic conditions. This is not novel for large enterprises, but this data-driven approach will hold for small to mid-size enterprises (SME's) and independents – especially as the industry establishes a new normal baseline for sales and customer behavior.
Looking to the future, a tightly integrated technology platform that enables this kind of data-driven intelligence into internal operations and enables the business to quickly implement and measure menu changes, delivery options, and staffing will be critical.
The restaurant industry is incredibly creative and resilient. There is no doubt we will see a plethora of new models and ideas emerge as brands navigate uncharted waters. But amongst the art that is food, data science will need to play an increasingly important role in keeping businesses moving forward profitably and serving their communities for years to come. Visit our COVID-19 recovery resource center to learn more.