Pepper, Automation, Future of work Thu, Aug 31, '17
Three Front-End Technologies Changing US Restaurants

Technology spending in the restaurant industry is quickly on the rise. The majority of chains indicate an intention to increase IT spending from 1% to 5% of revenue, a surge led by the nation’s largest fast-casual brands.

The space has been inundated by new players, with over 2.5 billion dollars invested in startups developing technology tailored to make restaurants more effective and efficient. The plethora of new back-end supply-chain platforms has been matched by a staggering variety of new point-of-sale solutions, all competing to make the customer’s experience easier.

However, there are three key technologies that stand out from the crowd, and they have the potential not only to optimize, but change the very nature of the restaurant industry over the next decade.

Self-Service Platforms

Fast food is increasingly becoming slower, as average wait times have surged by almost 200% in recent years, from under 2 minutes in 2012 to nearly 4 minutes in 2016. Wait times are not only unpleasant for customers, but they’re costly for a restaurant. Self-service platforms are being used to reduce wait times by scaling the number of orders a restaurant can take at any given time. If you employ three cashiers, the maximum number of orders you can take at any one moment is three, but deploying three-to-five static self-service kiosks allows you to double that without a significant increase to operating expenses.

Fast-food leader McDonald’s has rolled out self-serve kiosks to over 14,000 restaurants nationwide, with other major chains like Panera following suit. This move is paying major dividends for McDonald’s, with average revenues increasing 4-5% in the first year of deploying these kiosks.

Artificial Intelligence

There are over 5 million mobile applications available on the Android and iOS operating systems, but the majority of users spend about 85% of their time on just one-to-five main apps. For the restaurant industry, this presents two options in developing their mobile presence:

1. Compete for one of the top five spots on a customer’s phone, or two;

2. Enable customers to order from the most prominently used mobile apps

Artificial intelligence, specifically natural language processing (NLP), is increasingly being leveraged by major brands like Taco Bell to allow customers to message orders via third-party communication platforms like Slack. By doing so, they’re creating a customer experience that integrates seamlessly into the work-lives of their customers and providing themselves with a significant edge during lunch hour.

Other innovators are using AI to analyze the social media profiles of their customers to tune their offers and recommendations.

Finally, AI is being leveraged at the front-end to develop more insights into customer purchasing habits and preferences. This data is being leveraged to make smarter, more efficient decisions regarding inventory management, particularly around perishable items.

Humanoid Robotics

While investments in AI are increasing, most technologies in this family are still limited to digital media: websites, social media, and mobile applications. AI, however, can present significant advantages in-restaurant. Humanoid robotics allow restaurants to leverage the power of artificial intelligence in a friendly, approachable form factor.

The average wait time for a party is 23 minutes, with one-third waiting more than half an hour. That is an enormous opportunity to turn the tedium of waiting patrons into a memorable experience - the exact thing humanoid robotics excels at doing.

Imagine having a four-foot tall, friendly looking robot approach you as you’re waiting for a table. It asks you how you’re doing, shakes your hand, and proceeds to tell you about the menu, offering you special promotions. It turns to your children, waves, and asks them to play a game. Afterwards, it sends you a text message to download the restaurant’s mobile app, where you can receive unique offers and discounts. This type of interaction is a phenomenal way to make a lasting impression on your customers, and it’s much closer to being real than you might expect.

Unlike the more clinical versions of restaurant technologies like kiosks, humanoid robots like SoftBank’s Pepper provide an engaging, personal experience that creates positive sentiment as well as drives value through a user interaction. This, ultimately, serves to drive brand awareness and advocacy for restaurants that embrace this emerging technology.

Early Adopters Are Poised to Succeed

Starbucks, McDonalds, Panera, and HMC Host are some of the biggest brands in North America, and all of them have been pioneering the early adoption of these advanced technologies, while reaping great rewards.

With the surprising affordability of these technologies, early adopters are well-positioned to pattern their technology strategy after these industry leaders and obtain similar rewards. Restauranteers that wait to capitalize on these opportunities will likely see their returns diminish the longer they delay.