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Spotlight on Restaurant Operators: Challenges and Opportunities

Posted November 14th, 2017

The latest industry research paints a lackluster picture of restaurant sales growth and revenue performance. According to the National Restaurant Association, restaurant sales in the United States are expected to have increased (after adjusting for inflation) by only 1.7 percent this year. This is well below historical standards. Many restaurant operators are grappling with rising overhead costs — due, in part, to higher real estate prices and increased labor costs stemming from recent wage legislation. At the same time, the average number of visits people are making to restaurants, particularly casual dining and fast food establishments, has fallen by more than 10 percent.

All of which suggests that the industry will remain ever-so competitive. It’s no wonder, then, that so many operators are turning their attention to new business initiatives, many of them technology-enabled, aimed at improving financial performance.

Necessity is the mother of invention, as they say, and nothing spurs technology innovation more fervently than slumping sales and shrinking margins. Certainly, these are the primary drivers of restaurant technology innovation. If only to maintain competitive parity, operators today need to create greater efficiencies for their back-of-house operations. They also need to find new, creative ways to bolster guest satisfaction. With the advent of next-generation solutions ranging from predictive order management software (for projecting demand and reducing waste) to loyalty management programs (wherein guests can manage their own reward accounts), restaurants are better able to achieve both objectives.

Today, guest-facing apps are soaring in popularity, automating various types of interactions between diners and restaurants. Self-service kiosks are also gaining ground. These technologies are aimed at reducing friction in the ordering process — making it easier to customize meals, for example, and cut wait times. Some apps allow diners to track meal progress in real time, from preparation to delivery. Others allow those who are in a rush to pre-order and pre-pay for meals for a more expedient dining experience. Some mobile ordering systems incorporate geofencing and other location capabilities; an alert is sent when a diner is a certain distance away, prompting the kitchen to prepare their order so it’s ready when they arrive.

With all of these solutions, the goal is the same: to help restaurants meet the expectations of a technology-savvy, mobile-engaged population and further enhance the quality of the guest experience. Importantly, in the process, restaurants have the opportunity to capture mountains of guest data. Through analytical modeling and reporting, the data can be used to generate actionable insights and further enhance the guest experience.

On the restaurant management side, new solutions are being developed to help operators automate key processes, from inventory costing to menu development — e.g., syncing recipes with inventory and supply ordering systems. Some restaurants are experimenting with futuristic approaches to kitchen automation, to the point of installing robots that operate in an assembly-line setup and do everything from prepare salads to grill burgers.

Today solution providers are unveiling countless additional technologies, some perhaps more useful than others, as well as enhancements to existing platform capabilities, all at an accelerated pace. And increasingly, restaurant operators are seeking to leverage the benefits of these solutions to their advantage. According to research conducted for this Smart Decision Guide, 79% of restaurant operators believe that advanced technologies are key to not only addressing many of their current challenges, but also to catapulting their businesses to ever-higher levels of operational performance and guest satisfaction on an ongoing basis.

At the forefront of these technologies are next-generation restaurant management and point-of-sale (POS) systems, which is the focus of The 2017 Smart Decision Guide to Restaurant Management and POS Systems as well as several recent co-branded eBooks. These systems have recently evolved by leaps and bounds in terms of functionality, and there are compelling reasons for wanting to migrate from a legacy system that may be lacking in multiple performance areas to a state-of-the-art system designed to meet an operator’s needs now and into the future.