Ask any restaurant operator their thoughts on technology in their business, and they will likely rave about the benefits and how it’s helped them survive the pandemic and the resulting labor crisis. But they’ll also probably say there’s too much of it.
I’ve been operating restaurants for more than 25 years and can honestly say that technology has never been so ingrained in our business as it is now. There’s a tech solution for everything. If you stop to think about it, there are tools on the market right now that can help automate every aspect of a restaurant, from marketing to new and existing customers to placing orders, processing payments, fulfilling orders, managing inventory and staff, gathering customer data, and running loyalty programs. And the list goes on.
But the problem isn’t just that there are so many tech solutions out there (these solutions are invaluable to our business). It’s that operators are jumping on board with so many of them out of fear they’ll be left behind. The result is a major headache. Many restaurants now have a half dozen, if not more, platforms they need to manage—and those platforms don’t necessarily talk to one another, making operators’ jobs more complicated. They’re left with a frustrating patchwork of disconnected tools.
The case for bundling
According to Square’s 2022 Future of Restaurants Report, 90 percent of restaurants believe that increased automation would allow their staff to focus on more important tasks. But that can’t happen if we continue down this path of fragmented technology. It can be a full-time job managing the tech in-house.
There’s an enormous need for simplification, which is why the industry is now betting big on bundling as the next big thing. Through streamlining multiple tools, restaurants get the easier-to-manage, all-in-one platform they’re looking for.
Operators should look at their existing platforms and see what opportunities there are for bundling and consolidation, which can make the complicated process of managing tech less stressful.
Tech to manage tech
When bundling isn’t an option, there’s always more tech to manage your tech. While adding another platform may sound counterintuitive, the best example of why this works can be seen in third-party delivery. Restaurant operators know the excessive number of third-party delivery providers they need to work with to be competitive. There’s now a business for managing that business. Chowly, for example, streamlines all our restaurants’ third-party orders and then we added a last-mile delivery software provider, VROMO, to make sure that orders are delivered correctly and customers are satisfied.
Operators, especially multi-unit operators, should pay attention to what technology is coming onto the marketplace to help manage the chaos and consider whether it can simplify their daily routine.
Solutions that work together
And when neither bundling nor product management platforms are an option, it’s a good move to at least make sure your tech solutions are talking to each other.
Many operators are doing this to consolidate the customer experience. It’s important to make sure that you can track and manage the customer experience from the moment a customer sits down to the moment you request feedback and, later, getting them to come back again, but fragmented tech can make this process cumbersome. We purposely selected tech solutions for our restaurants that work together.
2022: The year of investor-driven M&A
There’s no doubt that 2022 will be the year for mergers and acquisitions. We started to see it around the world last year in deals like Olo acquiring Wisely, European tech company Just Eat Takeaway purchasing Grubhub, DoorDash acquiring Finnish delivery platform Wolt, UberEats purchasing Drizly for over $1 billion, Toast snatching up xtraChef, and more.
The goal of this massive cash infusion is often to provide restaurant operators with more complete systems, which is great—if not incredibly refreshing—news for the industry. And as the demand for streamlined systems grows, investors know that this consolidation trend has legs, so it’ll continue throughout 2022.
While bundling and consolidation will certainly continue, there’s still plenty of space for new startups to emerge on the scene. Restaurants will always have new challenges to solve and opportunities to take advantage of. In 2022, we anticipate a flurry of new tech companies, with other fledgling companies experiencing rapid growth. It’s bound to be an exciting year.
Michael Schatzberg is an operator of 25 fine-dining and fast casual restaurants in New York City and cofounder and managing partner of Branded Strategic Hospitality, a firm that invests in emerging technology in the restaurant and hospitality industries. Branded’s investment portfolio includes 30 companies, including Ovation, Chowly, TapRm, PourMyBeer, Minnow, Bbot, and Spendgo.