Is technology changing the face of hospitality?

Gareth Ogden, partner at accountancy firm haysmacintyre
08/11/2017 - 08:48
As technological advancements continue to shape the hospitality industry – encouraged by 55% of consumers “excited to see how it will change their dining experience” – Gareth Ogden, partner at accountancy firm haysmacintyre, discusses the rise of mobile ordering and how restaurants can incorporate it into their business models.

Every day it seems that we see a new innovation from the food and drink industry. Nando’s unveiled its ‘game-changing’ delivery app yesterday and, with research presented at the recent ALMR Conference by CGA supporting the industry’s drive for innovation, technology is clearly going to have a major impact on the sector for the foreseeable future. The question is, what technology should operators rely upon and what will it mean for their customers?

Aside from technology-driven experiences, such as virtual reality bars and burger-flipping robots, consumers are particularly interested in how ordering and payment applications can streamline their nights out. Convenience and efficiency are the buzz words for better service. Who doesn’t want their drink to arrive quicker? When time is tight before a theatre visit; when a table can’t be found in a busy bar; or when part of a large group, ordering drinks or settling a bill from a mobile device suddenly becomes very appealing for the customer. Customers are attracted by the knowledge that they can get quick and efficient service and can pay without having to wait for their bill (also particularly helpful if splitting a bill between several people!).

In addition to this convenience, is the ability for business owners to upsell through interactive menus and make pre-programmed suggestions for side-dishes or complementary drinks based on the customer’s initial choices. Obviously, a good waiter will be very effective at this, however, clearly there will be inconsistencies and missed opportunities.  

Speed and efficiency also work for restaurants. If they can turn tables more quickly, then they can increase the number of covers in one sitting. Furthermore, there is the ability to capture data and track an individual’s tastes and ordering patterns. Targeted marketing and selling can follow to trigger repeat visits and boost revenues. Lastly, there are clearly cost-cutting incentives for implementing these new technologies. In the current climate of seemingly ever-increasing costs, reducing the wage bill can help prop up bottom line profitability.

However, before investing in a roll-out of tablet hardware, software systems and staff training, operators must be sure that this is the right fit for their venues.

In the research cited previously, whilst there was excitement about the potential of new technology, there were also reservations, with 47% of respondents worried that technological advances in the industry will limit face-to-face interactions.

Indeed, for many, personal engagement is part of the experience on a night out. Chatting to bar-staff, receiving new drinks recommendations or building a rapport with waiting staff contributes to people’s enjoyment of a particular bar or restaurant. An ordering device is unlikely to be able to replicate the charisma of a human being!

Perhaps, where this more ‘impersonal’ technology appears to fit more naturally is in the quick service and fast casual space. Notably, McDonalds has recently heavily invested in upgrading its restaurants with its “experience of the future” programme, which includes self-service kiosks.

For restaurants and bars in city centres or travel hubs, whose customers have limited time or are looking for convenience over experience, there is certainly similar potential for gains using mobile ordering devices and payment applications. On the other hand, where consumers are looking for a more relaxed, engaging experience for their evening out, then the technology might be too impersonal.

Understanding the target market has never been more important for the food and drink industry. This is particularly true for multi-site operators in varied locations who must be careful to understand the local dynamics and resultant demand for new technology at each of their sites before implementing across the entire portfolio.

There is clearly much to consider when appraising an investment in the available technologies. Customer perception should certainly be one of the key considerations when deciding how to proceed - do you want to be seen as a convenience venue more than an experience venue? Or are you aiming at a balance between both?

Ultimately, whilst technology is important and exciting, the success or failure of the business will depend upon the quality of food and beverages served. With all the gadgets and applications in the world, there is no substitute for a quality product, however it gets to your table and however you pay for it.

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