April 30, 2024
Industry Report Roundup
With a fresh batch of industry trend reports recently released, we decided to round up the key takeaways in one place. We’ll discuss insights from the 2024 Restaurant Technology Outlook by Nation’s Restaurant News, the Restaurants’ Trend Report by Promenade, Phygital Index Report Q2 2024 by Tillster, and the latest industry headlines. Here’s what operators are focusing on to maximize their sales and profitability for the remainder of 2024.
1. Digital Ordering is Here to Stay
It is no surprise that digital ordering channels continue to come out on top for their convenience, efficiency, and overall appeal to consumers who are now reliant on having, according to Tillster, a “Phygital” experience. They define phygital as, “This ability to interact seamlessly between physical and digital experiences, known as phygital, has revolutionized customer engagement and service delivery. Phygital touchpoints are now the make or break factor, influencing customer loyalty, check sizes, and staffing pressures.”
Essentially saying what we all already know – operators need to continue to invest in digital customer experiences, not only do customers like them, they expect them.
One of the data points from the Tillster report that did surprise us a bit is the growing preference by diners for restaurant-specific websites and apps over the third-party platforms in both their pick-up and delivery orders. Over the last three months there has been a 25% increase in diners using restaurant channels versus a minimal change in third-party users. Diners are tired of paying more on the third-party platforms and have migrated to restaurant channels for better rewards and a more personalized experience.
Another digital ordering channel that continues to see growth is in store kiosks. Nearly half of the diners surveyed in Tillster’s report had used a kiosk to order recently and almost 80% of those diners had ordered more than they had intended to when completing their order on the kiosk. As labor shortages and costs continue to rise, kiosks are proving to be a solid solution for filling the staffing gaps and elevating customer experience while increasing order value.
2. AI is Proving it’s More Than a Buzzword
According to the Nation’s Restaurant News (NRN) Technology Outlook, operators are continuing to integrate AI experiences from front of house to back of house, with only 28% of operators indicating they had no plans to use AI now or in the future. The rest of the industry is either using or planning to use the capabilities in some part of their operations, but the question remains where?
It appears the industry as a whole is still in the phase of adoption where we are experimenting with AI capabilities to try to figure out what makes sense to increase operating efficiencies and improve customer experience. The leading way operators are using AI right now is in targeted marketing campaigns and loyalty programs. This insight seems to align with what we learned about consumers preference in the Tillster report – as more customers turn to direct ordering channels, loyalty programs and personalized experiences are becoming operators’ priority.
The next most popular use cases for AI revolve around labor forecasting and management, which aligns with the industry growth in kiosk use as both are helpful in attempting to solve labor shortages. No matter where restaurants are using it in their business, AI is here to stay.
3. Catering is the Old New Frontier
“Workplace catering is still a great channel for restaurants to boost their profits; ranking as one of the top strategies for growth (now exceeding pre-pandemic numbers in some parts of the US.),” according to Promenade’s report.
Their insight is backed up by the NRN’s outlook report as well where half of all operators surveyed said they plan to invest in catering in the next year, making it the number one growth category amongst respondents. The catering boom is likely fueled by more and more workers now returning to the office, the resurgence of live events post pandemic, and the general industry shift towards technology. Catering isn’t a new revenue channel, but technology is relatively. If you consider the old school experience of placing a catering order it feels cumbersome compared to the customer experience now with more technology in place to streamline ordering. It’s no surprise that as off-premise popularity continues to grow, catering is the natural extension. In fact, in the NRN outlook report the other top channels operators were focusing on for growth included carryout and third-party delivery, again all taking place off-premise.