The pandemic has been a wake-up call for restaurant operators to get their digital houses in order. With market conditions shifting quickly and unpredictably, unprecedented agility is required for restaurants seeking to adapt to new customer behaviors, regulations and operating requirements.
At the same time, health safety must be an even higher priority than ever, which calls for contactless, touchless customer interactions. Moreover, order capture and order management capabilities are being tested, with an influx of customers using restaurant channels (mobile, third party, call center and websites) and choosing among the many options for delivery or pickup.
Through it all, restaurants must ensure a seamless experience across all channels and strengthen loyalty-building programs by aggregating, analyzing and interpreting the myriad of data collected.
Many restaurant operators were able to adapt quickly to market dynamics brought on by COVID-19, but others (often chains that were already struggling) were unable to maintain even scaled-down operations. It’s been survival of the fittest — with technology being a critical factor enabling operators to weather the pandemic storm.
After meeting with our restauranteur clients and other industry leaders, we’ve developed this list of critical priorities for operators seeking to keep their service top-notch and their customers happy.
Recent dine-in closures exposed many weaknesses, as restaurants for the first time faced intense demand for digital ordering and processing. Most online ordering solutions can effectively handle spikes in incoming orders and route them to the store point-of-sale (POS) system. However, to ensure menu information is consistent across all channels — including third-party partners — all product information must be provided as standard APIs so that customers get complete information and are able to customize their selections just as they would on direct channels.
This will also help increase revenue, with fewer customers switching to other restaurants because they didn’t see their favorite selection available — or understand that they could customize an order. We also recommend including digital means for the customer to receive upsell options, such as beverages and popular or previously ordered side items or desserts — another way to increase transaction amounts.
Many restaurants are unprepared to ensure cross-channel menu consistency. They lack integration platforms such as MuleSoft and Dell Boomi, which integrate legacy POS systems to delivery service providers and can ensure that customizations and promotions are accurate.
As restaurants transition back to full dine-in capacity, operators must plan for and continually adjust their resources to support order volume and consumption fluctuations across all areas: dine-in, delivery, drive-through, take-out and curbside pickup. Consumers have grown accustomed to the expanded service options brought about by the coronavirus, and we believe that demand for these services will remain long term — perhaps forever. For this reason, forecasting models that rely on pre-COVID-19 data are now obsolete. To more effectively project demand, restaurants should use recent data combined with updates to regulatory guidelines and local current events. For example, even data as easily available as the closely watched Johns Hopkins COVID-19 tracking map has proven helpful to national and regional chains in planning supply-chain alterations.
The customer experience is another area in which a technology upgrade can help. Offering a consistent customer experience across channels starts by creating a single view of each customer’s transactions and preferences. For many restaurant chains, order data such as POS transactions and online click information is siloed, split between legacy POS systems and stand-alone ordering systems. This disconnect hampers identification or prediction of shifts in customer behavior. For example, many restaurants struggle to link a walk-in customer’s data with that individual’s digital ordering history, whether placed directly or through a third-party provider.
To attain a single view of the customer, operators should tie the guest’s identifier (loyalty number, phone number or credit card, for example) that resides in the customer relationship management (CRM) system with their POS and ordering systems. The restaurant industry can learn a great deal from the progress of retailers in creating a unified view; our clients have learned that ensuring data privacy and “gamifying” the process with incentives are among the best ways to persuade consumers to share their information.
Additional customer data will help restaurants better forecast demand by channel and menu needs, which will in turn trigger more advanced preparations, such as thawing frozen meat or dough ahead of anticipated demand. There’s a spinoff benefit here, too; wastage will drop, especially for highly perishable products such as raw meats.
Other aspects of the customer experience have also shifted notably. More than ever, dine-in customers prefer to select items and pay via their own devices rather than handle paper menus and use traditional card payment systems. Deploying a mobile ordering platform can not only serve this need, but can also increase average check size. One of our restaurant clients increased their average transaction size by 10% to 15% after we helped them deploy a mobile solution that captures valuable data, allowing the operator to more fully understand customers’ purchasing patterns and preferences. This is another reason for operators to ensure that all prices and menu items are updated in real time across all locations, using integration platforms like those noted above if necessary.
To allay customer concerns and mitigate against the potential spread of COVID-19, restaurants need vigilant health safety and hygiene protocols more than ever. We advise implementing such safety solutions as contactless thermometers to take guest and worker temperatures upon admission; measuring real-time occupancy through spatial-density calculations that alert management when the number of people in a defined space exceeds a predetermined threshold; equipping workers with smart wristbands to ensure social distancing (again, alerting managers when thresholds are exceeded); and monitoring equipment and air quality with real-time tracking. These measures will reassure customers that essential precautionary measures are being taken.
And reassurance is critically important; operators must continually communicate the many ways that employees are supporting guest health safety. We advise restaurants to exhaustively provide this information across all channels: in-store signs and digital screens as well as digital channels including mobile, the website, social media and third parties. This info cannot be overcommuncicated — it should blanket the customer interaction, from browsing to ordering to picking up or dining in.
As restaurants invest in new measures to ensure health safety and provide a consistent dine-and-order-anywhere experience, they will likely be looking to reduce operational costs elsewhere. Here are three corporate functions that are ripe for a reset to contain expenses while improving operations and agility.
Consider transitioning to an output-based marketing budget and away from traditional fixed-cost design and production agencies. One of our restaurant clients retained our services to replace their multiple agencies for creative, campaign planning, and website and other digital content. The consolidation significantly improved the business’s ability to quickly devise, target and roll out new campaigns (as much as 30% faster), and reduced overhead 40% as we collaborated directly with their internal team.
Operators must explore opportunities to increase automation through virtual sales agents to handle customer orders, FAQs and other interactions. For a U.S.-based pizza restaurant chain, we implemented virtual agents with an outcome-based pricing model, which included a conversational artificial intelligence (AI) solution with natural language processing that could interpret complex food customizations. Despite background noise and other variables, the virtual agents helped customers create accurate order carts. The solution helped the company reduce call center infrastructure costs.
Corporate finance and accounting is another function that can benefit from intelligent automation, touchless processes, and an outcome-based, as-a-service model. It’s important to assess providers based on their automation capabilities and restaurant experience, due to the many industry nuances, such as high invoice volumes, leasing arrangements for store setups, and so on.
COVID-19 has disrupted the traditional restaurant experience and refocused operators to review operational efficiency and capabilities — perhaps revisiting strategies and improvements that they’ve long put off. As the post-pandemic industry takes shape, only businesses with a strong digital backbone will be able to weather the changing tides no matter what the future serves.
This article was written by Nishant Sinha, Director Consulting for Cognizant’s Travel and Hospitality practice.