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GRS Restaurant Technology Blog

What's Hot In Restaurant Technology

Posted by Duessa Holscher on Mon, Oct 24, 2011 @ 02:09 PM

We were amazingly fortunate to hear from Mike Nettles of Red Chair Ventures at the recent Granbury Restaurant Solutions Customer Conference.  Mike has a wealth of knowledge about restaurant technology and an insider's perspective as he not only consults with large restaurant chains globally, he owns and operates extremely successful restaurants of his own. We took notes to share with you some of the insights learned from Mike during this session. 

Restaurants Face a Changing Competitive Landscape:

  • The “contraction” of the industry in 2010 brought the restaurant business back to the size it was in 2000.

  • The “Other” category - Retail vending, recreation and mobile - is the biggest growth segment in the restaurant industry.

  • 4 out of 10 consumers have eaten from a mobile food truck in the past week.

  • Convenience stores are beating fast food restaurants in the “lunch” daypart.

  • Spending on food consumed at home has increased steadily since 2005, but restaurant spending has been declining since 2008.

In 2011 so far, the industry remains flat overall.  Behind the scenes what we’re finding is that 50% of the industry is up, and 50% is down.  The segment that’s up is primarily driving business through couponing, so while consumers are expecting deals, margins are driven down, and this effect is compounded by increasing food costs.   On average, restaurant menu prices have only increased 2% this year, while grocery costs have gone up 4%.  For the first time ever, we’re seeing grocery meal products - like frozen pizza - higher or equal to restaurant prices.  You can get a Domino’s pizza for less than a frozen one at your grocery stores, and Safeway’s “lunch counter” business can encompass 4-5% of their total sales.  Overall, advances in cooking technology are enabling non-traditional outlets to compete with traditional restaurants.

Technology Trends

  •  65% of restaurant patrons surveyed have ordered a meal in the past 3 months on a smart phone.
  • More than half of your customers research restaurants on a smart phone before deciding where to eat.

  • In 2011, restaurant reservations made on a smart phone app increased 100%

  • The average smart phone users installs 3 restaurant-related apps in the first 30 days of owning their phone, then no more.

The pizza industry has always been the “poster child” for implementing technology, leading the restaurant industry in adoption of customer databases, online ordering, and smart phone.  Now, savvy restaurant owners are learning that smart phones are amazing “free technology” that your customers are paying for, not you.  Trends are showing that mobile apps are outpacing web-only online ordering sites.

What are restaurants using smart phones for?  Trends like e-checks and receipts, QR codes tied to nutrition information & connected to diet programs.  Location-based technologies are starting to be employed to enable restaurants to make the food when the customer is nearing the building.  For employees, scheduling, alerts, incentives and motivational campaigns are a key focus.

Social Media

Interestingly, surveys of restaurant owners in 2010 indicated that a growing number were using social media to promote their business, and believed it was important.  In 2011, they are still using it, but the perceived importance is dropping.   This indicates that many operators don’t understand how to maximize social media or why they have jumped on the bandwagon.

Online Ordering

Restaurants have flocked to online ordering portals such as Grub Hub or SnapFinger, but long term that is dangerous to the restaurant brand. As more business shifts online, a portal is just one more middleman that you become dependent on to drive your revenue and that takes a cut of every order.  A much smarter approach is to use a branded online ordering solution directly linked to your website.

Customer Loyalty

Restaurants have broadly adopted customer loyalty, but many consumers are starting to feel that they don’t get enough of a reward to justify giving up personal data.   The key sentiment among consumers is - “I told you about me . . so use the data to give me something personally tailored to my interests.”   Don’t turn your customer loyalty program into just another coupon.

Key Takeaways

  • Technology in the restaurant should be about growing your business, not just running it.

  • Technology can and should change your operational model

  • Partner with technology providers and challenge them to meet your needs.

Tags: Customer Conference

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