How operators can take advantage of the digital arms raceHow operators can take advantage of the digital arms race

Joanna Fantozzi

Just a couple of decades ago, restaurant operators’ options for technology vendors were slim, and for the most part, restaurants only needed one or two partners to run their business. But in recent years, as technology capabilities and needs have grown, the number and breadth of vendors has shot up exponentially -- covering everything from data to delivery, and AI to automation.

Juan George — former Olo exec. and cofounder of tech advisory company, 858 Partners — spoke about navigating the oversaturated world of restaurant technology at his CREATED Talk on technology at CREATE: the Future of Foodservice in Palm Springs, Calif. presented by Nation’s Restaurant News, and speculated on what he thinks the future might hold for foodservice technology.

“Operators can barely open up their emails these days without getting dozens of new emails every day from tech vendors that want to sell you something,” George said. “I get it; you’re all fed up. Now on the restaurant tech side… the signal to noise ratio is highly problematic. Right now, the restaurant tech companies are not getting through to the buyers and the buyers have implemented a tech freeze on most of the ‘nice to have’ tech.”

George said that for both technology vendors and restaurant operators, it’s crucial to learn the difference between “must have” and “nice to have” technology. Whereas some of the newer, blue sky type of technology (like perhaps involving automation and generative AI) might be fun to talk about, it might not be practical enough or efficient enough to invest in right now. George suggests talking to general managers and store-level employees to figure out the pain points and how technology can be helpful—as well as discussing technology usages with industry peers and consumers.

The biggest change in recent years is operational focus on invisible back of house technology as opposed to front of house technology, George said.

“The last few years leading into this were really the California gold rush of restaurant tech, especially when it came to the front of the house stuff like third party delivery, loyalty etc. and that's where all the investment and attention was,” George said. “But when we think about the back of the house, it was largely ignored… It still feels like it's run on pen and paper and a little bit of instinct. Now, we have this new wave of new companies that are addressing the problems finally.”

But, George said, the wave of back of house solutions-focused companies has also caused problems, specifically the oversaturation of redundant tech vendors and challenges of integration with one another. George predicts that the foodservice tech vendor landscape will look very different in the coming years and that many of these tech startups won’t survive.  

“Companies like DoorDash, Toast, Square, Olo, are all in a digital arms race,” George said. “It’s a really tense time… and that’s going to lead to a lot of confusion for operators… You’ve got the point solutions out there just trying to get your attention and trying to survive. We're still in the early innings of the digital transformation.”

Contact Joanna at [email protected]