This much is clear: New technologies are powering the restaurant industry of the future. But things are accelerating so fast that it can be hard to keep up, particularly for small and mid-sized brands that hadn’t invested in digital solutions prior to the pandemic.
We connected with Joe Tenczar and Brian Pearson, two members of Restaurant CIOs — a group of industry executives who have served as chief information officer at some of the restaurant industry’s biggest brands — to provide answers to some of our readers’ burning questions.
At this point in time, what should my tech stack look like?
Brian Pearson (BP): The first thing I think about is, how does the tech stack support your business operations and what you want to achieve as a business? While for some businesses it might be great to have a tablet or a kiosk available on a table, for other businesses, that would absolutely wreck their hospitality experience.
The first big challenges you have as a business [are] figuring out what you want your service standards to look like and how you reflect those in the digital properties that you own. One of our big challenges is that not all the digital properties are equal, and depending on how much you're ready to spend on those properties in large part will depend on how integrated and seamless it feels for the customer and the team member. So frequently we're worried about how it looks for the guest. But if it's not efficient for the team member, you're going to fail regardless.
One of the big challenges that we face coming out of the pandemic is that such a significant portion of our revenue and our sales channels are now online or off-premises. How do we thoughtfully throttle that traffic to make sure that we deliver on the experiences that our guests are expecting? And do our digital platforms support that?
Joe Tenczar (JT): There are really three main components. One is the point of sale; one is back office, which is basically labor, cost of goods, some business intelligence, inventory management, supply chain, ordering and purchasing and that kind of stuff. Those are two big core ones. And the third one is sort of new that I think a lot of restaurants are now realizing the value of: CRM (customer relationship management) and CDP (customer data platform) and understanding customers and their behavior.
The major brands are going to augment that with more intense business intelligence, analysis software that doesn’t just do reporting from descriptive data but also more predictive data, which is the ability to affect the outcome of something based upon what you know about what it's going to do.
How should I be using CRM/CDP platforms to advance my business?
JT: It's not necessarily table stakes at this point, but it's certainly a differentiator. Brand is super important these days, and especially with transactional dining — whether that be third-party delivery marketplaces or just driving by somewhere — there are a million choices. When you're going to a fine-dining restaurant, it's all about the ambience and the server and the interactions and the sommelier. But most brands today are really latching onto this transactional dining stuff, and in that case, you really need to talk to your customer about your brand in a way that they respond to. You've got to understand what their behavior is before you try to influence them. And then you've got to be able to see what the reaction is as you try to influence them.
The Holy Grail there with CDP/CRM is that link between the transaction and the guest. Loyalty is one way to do that. Loyalty is kind of fraught with issues because not every brand should have a loyalty program. How many loyalty programs can you be involved in if you're buying something once every three months? Chances are you're not going to sign up for a loyalty program for those guys. A loyalty program just turns into a discount program unless you understand first what that guest behavior is, and that's what CDP/CRM will allow you to do: tie the transaction to the guests in multiple ways and then try to understand what they're doing on a regular basis. And then if you were to put a loyalty program in place, what would you modify to get that person in one more time a month or three to four times a year or raise their check from X to Y?
BP: I think many of us intuitively know, and the data backs this up, that the guest you already have is a lot easier to sell to than the guest you don't have. We view that as the internal marketing versus the external marketing. And the way that I've seen CRM platforms work the best is when they recognize guest behaviors and they communicate with the guest in a way that reinforces the behaviors of frequency.
One of the most important things I look at on a daily basis is, what was the behavior of the guest relative to these menu items? And are those menu items generating affinity and affiliation with the guest? What happens when a new guest orders that item versus an existing guest? I think that's a really important thing, recognizing also that you don't get an opinion generally from the majority of your guests. You get them from a very small minority. So how do you use your CRM solutions to activate that majority and help them recognize that the product you want to offer is something that they'll have an affinity and affiliation with?
How can I use technology to support my business through this labor crisis?
JT: The sizzle factor is the drones and the robots and all that kind of stuff. And I think there will be some efficiencies in dropping fries with robots and in drone delivery or autonomous car delivery. I really do think autonomous car deliveries have got legs at some point when it's legal to do that; there’s a lot of jurisdictional and governmental stuff that has to be passed for that, but I think that will happen probably within the next 5-10 years.
Beyond the futuristic stuff, what you could do today is really about efficiencies. Finding places that have friction that can be reduced by technology in any way is going to help you keep people longer. A lot of retention is based on inload — it's too hard to do this right now — so if you can reduce that friction, your retention goes up. Attracting talent is mostly about culture; pay is short term, but culture is long term. If you get people that you can retain because of tech — there's lower friction because of technology — they'll bring their friends in, and then you can build culture from the ground up.
BP: I think the opportunities for us are how we implement solutions that tell the labor market that we are an employer of choice — so if we have a tip pool that we manage, how do I get your tips to you nightly? I also think that we as an employer have to start thinking about what these people are saying that they really want. The restaurant business is hard. What we have to do is identify ways to offset labor so that we're minimizing the amount of requirement for being overly productive.
We're also going to have to do things that are thoughtful, like instead of the ordering having to happen at the cashier, now you can go to your table, scan a QR code and place your order and payment right there. It’s maybe not the hospitality standard that we're looking for, but guess what? We took that employee off of order duty and we put them on production duty. So I think that's where it and technology in general can help: By thoughtfully creating solutions that allow us to shift our labor where we need to.
What’s the next big tech trend I should be paying attention to for my business?
BP: The unification of the digital experience is a critical thing that's happening right now because it's going to make it better for the guest, it's going to make it easier for the team member and it's going to make it less complex for the operator to implement. Instead of having to have seven different systems, maybe you can go down to one or two.
What's important for us as operators to remember as well is, don't completely let go of the hospitality. Instead of now having one person for four tables — that was the measuring stick — you have one person for 12 tables and they're going to roam around and they're going to look at the guests, and they're going to be aware of where they're at. Are they ordering? Do they have a glass that's more than half empty? Create those opportunities to leverage hospitality only where it's necessary to maintain the guest experience. You’ve still got to maintain that hospitality that the restaurant industry was built on.
JT: It really does revolve around CRM, and a lot of brands aren't there yet. The big brands are doing very well in it, but mom and pops are not quite there yet.
Olo just acquired Wisely. A product like that is perfectly suited for the restaurant industry; it's not super complex but allows that understanding of your guest behavior. They've got some great ways you can actually acquire guest information and link them to the check without a loyalty program. Things like that are important, where you have a platform in there that can start building that customer profile so you can segment against it; you can market specifically to those segments and talk one-on-one to that guest if you have that connection. That's going to be the game changer for whether or not your brand survives. It’s really going to be predicated upon that in the future.
