From mobile apps, chatbots, tablets for ordering and checking out, Internet of Things integration and more, the traditional restaurant industry as we know it now will cease to exist. To keep pace with and maintain relevancy in our tech-driven world, the restaurant industry is undergoing a massive digital transformation with the implementation of omnichannel platforms geared toward increasing access points and improving customer experiences. The industry has a new demand -- driven by both customers and competitors -- to offer a higher standard of ease, convenience and service through technology.
Customer experience is one of the most important competitive differentiators in any service-oriented industry. In the restaurant sector it takes priority alongside price and taste. Leading restaurants are adopting more technology-centric service offerings and perks as chains seek to insert themselves into customers' daily routines, reward loyalty and decrease transaction time.
Through restaurant-owned apps or the use of third-party services such as OpenTable and Yelp, real-time marketing is driving initial commerce decisions. Push notifications and geo-location technologies help businesses reach consumers where they are or with special offers tied to specific points in time, often based on loyalty and point-of-sale data. Restaurants have more data on customers than ever before and are empowered to use this information to surprise and delight diners celebrating birthdays, anniversaries, graduations and more. Most consumers are willing to share information about themselves in exchange for a brand "knowing" them and improving their experience as a result.
Hyper-personalized marketing notifications may ping a customer with a discount offer for special events, but it may also draw a customer to a restaurant location through proximity alerts. The Starbucks rewards program and app offer an option for users to receive a push notification whenever they are in walking distance of a coffee shop location. There are options to receive location notifications for all stores or only for those marked as favorites. In addition, the app makes it easy for consumers to track loyalty points earned, as well as order in advance and make payments directly from a phone, according to a study from smile.io.
The Starbucks app also shares notifications when loyalty points are near expiration, creating a sense of urgency for the customer to make another purchase. In this scenario, a consumer may receive a notification that a store is nearby and that they have points expiring soon. This may prompt immediate action for a new purchase, helping the consumer take advantage of points earned and helping Starbucks build a stronger relationship with the individual.
The power of smartphones and omnipresent internet access provide information and service offerings at consumers' fingertips. Restaurants that let customers order and pay from mobile apps have found ways to save customers time, offer special promotions and discounts and make the overall customer experience easy and enjoyable. For example, Waze recently partnered with Dunkin' Donuts to pilot a new "order ahead" feature which aims to time the preparation of food based on a customer's distance to the store location. Payment is linked to credit cards or digital wallets such as Apple Pay, so all a customer has to do is walk into the store, grab an order and go.
Technology is also changing customer interactions in traditional table service establishments. Apps may provide an estimated wait time, so customers can avoid waiting in long lines, especially during lunch or dinner rush hours. For those customers that do end up waiting, a restaurant can leverage a loyalty CRM database and be better positioned to make special offers to brand loyalists, such as having a bartender mix an individual’s favorite drink and surprising them with the cocktail while they wait for a table to turnover.
Chains such as TGI Fridays and Chili's are reimagining what the tableside dining experience looks like. Customers are provided with tablets at many restaurant locations, as Forbes reported. As a menu, the tablet provides a digital ordering point that supplements traditional waited table service, shortening the time it takes for orders to be placed. As an interactive portal, the tablet may offer games (sometimes an extra source of revenue for restaurants) or additional information on food and drink specials (eliminating the need for printed table-toppers or awkward menu inserts). The tablets may also serve as a point of sale, allowing customers the option to pay the check digitally as opposed to waiting for a more traditional bill to be presented. These technology access points can also be tied into customer loyalty profiles and offer repeat customers personalized welcome messages or special discounts that enhance each dining experience.
No restaurant or food chain has found the perfect recipe for a digitized operating model -- in fact, organizations with strong cultures and traditions are finding challenges with large-scale digital transformation. While juggling deeply-rooted traditions and integrating new digital platforms, finding the right balance is vital. There is no one-size-fits-all digital solution and each restaurant must understand their customers in-depth to create the right digital strategy. The business value must be clear for the C-suite to buy-in and invest in the infrastructure needed to make these programs successful.
Traditional operating models with one to three-year planning cycles and top-down, one-sided communications will no longer work. Organizations that are not afraid to take risks and try something new will likely continue to see gains, but they must adapt to an agile working environment and embed experimentation and learning within their culture. Large scale digital implementations -- if done correctly -- are not only transformative for customer service, delivery or marketability, but also for waistlines and bottom lines.
Jenny Strange is a Principal with the North Highland Company. She has nearly 20 years of experience in process assessment and improvement, strategy development and execution and customer experience spanning across various industries including telecommunications, retail and consumer products, non-profit and financial services.
Bill Caswell is a Principal with the North Highland Company and is the firm’s Hospitality Practice Leader. During a career spanning more than 30 years, Bill continues to serve a multitude of clients across the industry including global hospitality corporations, vacation ownership companies, restaurant and retail enterprises. Bill’s focus on customer experience, business efficiency and technology integration helps clients meet and exceed revenue and growth expectations.
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