In a special series, NRN editors predict the trends that will emerge in the coming year in all areas of the restaurant industry. Here, West Coast Bureau Chief Lisa Jennings tells us what’s next in digital.
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Restaurants no longer face a choice between operating as brick-and-mortar retailers or having a digital presence. Today, it must be both. And the challenge ahead for any restaurant chain will be staying true to the brand, mission and values as they evolve with the times.
Here are a few examples of food-focused digital innovation to come in the new year:
Restaurant companies will become tech companies
If 2015 was the year when restaurant chains realized the game-changing potential of their digital platforms, then 2016 will be the year operators take that game to the next level. Over the past year, restaurant chains have invested heavily in recruiting serious tech players into top management in chief information officer or chief technology officer roles.
Starbucks Corp. hired a former Adobe executive Gerri Martin-Flickinger. Chipotle Mexican Grill hired Starbucks’ former CIO Curt Garner. And countless other restaurant chains have announced the hiring of a first technology chief or vice president who will develop and implement new digital strategies that will fundamentally increase customer engagement, from RAVE Restaurant Group to Coffee Bean & Tea Leaf.
These new hires will enable restaurant companies to move with the rapidly changing times and to better understand how restaurant diners consume technology. As a result, tech innovation will seem less a hastily tacked-on prosthesis and more a vital artery that supplies an entire operation.
Postmates, which was founded in 2011, has expanded to deliver food, groceries, more. Photo: Postmates
Meal kits to influence delivery space
Nibbling at both the restaurant and delivery markets are a growing number of meal-kit providers, which supply partially or ready-to-cook ingredients and an easy-to-follow recipe to create a chef-inspired meal at home.
Blue Apron, HelloFresh, Plated and others are popping up across the country offering consumers the promise of a restaurant-quality meal they can make themselves without the fuss of shopping or the need for cooking skills. Typically meal kits are ordered online and delivered straight to consumers at a reasonable price.
The trend is making players in the still-nascent delivery space nervous.
Some argue that the meal-kit trend will be a flash in the pan and peter out. Others see restaurants getting into the game with their own meal-kit services delivered by the likes of Postmates or DoorDash.
Holger Luedorf, Postmates’ senior vice president of business, said time will tell whether the meal-kit trend will steal significant market share.
“If customers want it and the business model is sustainable, it will stick around,” he said. “But these competitive pressures and other players will bring more innovation out of the overall industry. In the end, the ones that serve the best food will be the ones that survive.”
Restaurants will recapture control of mobile ordering, payment and delivery
The industry will watch carefully as Starbucks Corp. tests delivery with third-party player Postmates. Typically, delivery through such third-party players is available through the delivery firm’s website or mobile app, but Starbucks will integrate delivery seamlessly into its own app.
Guests will be able to use their smart phones to order, pay ahead and get their meal delivered by Postmates.
Some third-party players say consumers won’t want to download so many apps from their favorite restaurants, and that the digital market places offered by DoorDash or GrubHub, for example, offer consumers more efficient one-stop-shopping for their next meal.
Taco Bell launches delivery with DoorDash. Photo: Taco Bell
Others, however, contend that restaurant operators will want to keep control of their customers’ digital experience within their own apps or websites.
Digital ordering provider Olo, for example, is working on the development of restaurant apps/websites that incorporate delivery as a feature.
A new service called Dispatch, scheduled to debut before the end of the year, will allow guests to order and pay through the restaurant apps, then at checkout select a delivery option. Guests will then see a selection of delivery price quotes from local courier providers and to track their delivery selection in real time.
ChowNow likewise is developing online ordering platforms designed to allow restaurant operators to control the ordering-to-payment-to-delivery process through their own branded apps or websites. In San Francisco, Chicago and New York, the software company is partnering with specially trained Uber drivers to offer delivery, and the service is expected to expand to more markets next year.
Contact Lisa Jennings at [email protected].
Follow her on Twitter @livetodineout
