An industry that was historically slow and resistant to embrace technology has accelerated in the past couple of years.
To say that the hospitality industry has shifted over the past two years is an understatement. And as we contemplate this “new normal,” it’s important for hospitality operators to understand that their playbook essentials need to shift if they want to remain successful.
In an industry that was historically slow and resistant to embrace technology, QR codes became the poster child of COVID operations, and customers are now used to being able to pull menus on their phone, and even order and pay on their own. This seismic shift transformed operations and service models across the industry (and even beyond the hospitality industry). And technology is not going anywhere—as customers return to dining rooms, they want to remain heavily involved in the ordering and payment experience. Staffing challenges remain, and operators are still trying to survive after two challenging years that will leave a mark on the industry (and their bottom line) forever. That’s why it’s important to have a new playbook.
Consolidation in the Food Tech Industry
A wave of consolidation is coming to the food technology industry, and as much as operators might not feel concerned, it is bound to have a direct impact on their business. As I recently mentioned to PYMNTS, the industry has too many players and too many piecemeal solutions. Nobody wants to run a separate technology solution for every channel— operators tend to seek out the best tools to run dine-in operations, takeout/curbside pickup, and delivery (sometimes through a third-party). We’ll see the big players continue to aggregate all these features, and limit the ability for operators to select the right technology solutions for them.
Choosing Channel Partners Correctly
While the selection of channel partners is bound to become more limited, operators will have to pay close attention to the pricing models and payment structures they sign up for in order to ensure that their restaurant technology solution can bring a strong return on investment. This means taking a closer look at standard processing rates (card present and card not present rates), set up and maintenance fees, monthly contract costs, hardware investments, etc. Operators should be ready to have tough conversations with their technology providers, and discuss payment and pricing head on, with a full understanding of how they affect their bottom line. The industry-wide lack of transparency around pricing is sadly not going away anytime soon.
Addressing Labor Challenges
A recent study by the National Restaurant Association found that seven out of 10 restaurant operators reported having issues with staffing. While many have resorted to increasing salaries and added benefits, it has become clear that labor will remain a massive challenge for the foreseeable future. Here is the silver lining though: a recent study found that 70 percent of workers who changed jobs during the Great Resignation find that their new positions aren’t what they expected. Some are even considering asking for their former job back. As the labor market continues to tighten, operators should be prepared to have conversations with staff - former, current, new and future staff - and highlight how technology has transformed operations and service models, making their jobs much easier and more rewarding.
Technology Enhances The Guest Experience
Before the pandemic there was a common misconception among waitstaff that technology is a detriment to the guest experience. Many servers still believe that, by using contactless ordering and payment methods, guests don’t get as much attention as when a server takes their orders. In reality, technology is what allows the waitstaff to focus on the most important aspect of the guest experience: making sure customers have the best experience, that they leave restaurants happy and want to return. By automating the easy, transactional tasks that bog down waiters, they have more time to assist guests with menu recommendations, check on their meal, and provide the true attention they deserve. Empowering guests to take control of their orders also decreases the room for error—his leads to higher guest satisfaction, usually a higher spend and higher tips for the waitstaff.
Technology Makes Jobs Better
Another misconception about technology is that it will eventually replace all jobs within a restaurant or hospitality venue. Over the past two years, advancements in technology have transformed the way operators staff their venue, which ultimately impacts the work environment. Those returning to a position within the restaurant industry will find that technology is making their jobs much easier and more rewarding.
They’ll find that, by leaning into technology, their jobs are more fulfilling, more guest-centric and full of independence. Technology provides both front-of-house and back-of-house staff with more autonomy—it decentralizes control from the kitchen and onto each role within the restaurant—staffers are emboldened to take initiatives, resolve any immediate guest incident, and do everything they can to exceed guests’ expectations. Staff end up having the freedom to focus on guest interactions, make quick decisions to improve the guest experience and continuously grow. For operators, it means a renewed commitment to staff training and giving everyone a chance to hone new skills and evolve them quickly. Everyone - operators and staff—benefits from a more efficient, safer and more mindful work environment.
As the hospitality industry continues to change, operators will need to keep leaning into technology, and constantly update their playbook to find continuous success.
Tim McLaughlin has served as Co-Founder and CEO of restaurant commerce platform GoTab, Inc. since 2016. Prior to GoTab, Tim led Siteworx, Inc., a mid-sized digital experience agency with clients including PayPal, Goldman Sachs, VeriSign, Bain & Co., and Thermo Fisher Scientific, to a successful PE exit in 2013. He also co-founded and operated Caboose Brewing Co., an upscale brewery and farm-to-table concept based in Fairfax, Virginia, where most of GoTab’s features were incubated.