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6 Ways Technology Is Changing The Restaurant Industry


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Learn more about how technology is changing the restaurant industry in this exclusive white paper from <a>Tundra Restaurant Supply</a>

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6 Ways Technology Is Changing The Restaurant Industry

  1. 1. The Front Burner Presents Technology Is Changing The Restaurant IndustryTundra Specialties 888.594.4183 888.594.4183 1
  2. 2. Take yourself back to 2005 for a minute. For most of us that doesn’t really seem like a long time ago, and yet so much has changed for the food service indus- try since then. In 2005, Facebook was barely a year old and known only to college students. The invention of Twitter was still a year away and three years would pass before the first Groupon coupon was ever issued. In six years technology has altered the landscape in which restaurants operate, and the reach of these ad- vances goes far beyond the internet. A good example is the way the iPad has begun to take over menus and profoundly change how they interact with customers. Touch screen and wireless technology makes ordering food an interactive experience that engages customers like never before. Early adopting restaurants have reported a 20% increase in sales af- ter converting things like wine lists to iPads. Sometimes, technology can be the best salesman in your restaurant. Certainly the iPad and the internet are only the begin- nings of the new frontiers technology will open for res- taurants. In this issue of The Front Burner we discuss some of the most important and cutting edge advancements that have a direct impact on the food service industry. That said, three core principles remain the same: quality food, excellent service, and an attractive concept set in a comfortable atmosphere determine whether restau- rants succeed or fail. The advent of all this technology merely allows restaurants to accomplish these funda- mental goals more efficiently, with better effectiveness, and in a more stylish manner than previously thought possible. Keep those basic ideas in mind as you explore the new frontiers of technology. Michael Lewis Tundra Pioneer2 Tundra Specialties 888.594.4183
  3. 3. Technology Is Changing The Restaurant Industry Technology is like the California Gold Rush: everyone’s moving fast and trying to get a piece of the action. And while technological nuggets like Google and the iPad have changed how millions of businesses operate, the food service industry has largely been left behind. Finding ways to tame the technological frontier for the benefit of restaurants was a major topic of discussion last year at the annual National Restaurant Association show in Chicago, and though res- taurants have been slow to adopt new technology, many restaura- teurs are now realizing just how much they stand to benefit. Venturing out into the great Tech Territory can be daunting – every new service and gadget requires significant investment and a quick learning curve. But for the gunslinging restaurateur who is willing to bring that technology to bear there are riches and fame there for the taking. Okay, “riches and fame” might be a tall tale – but the benefits of leveraging the advantages of technology can be very real for any restaurant, and those who don’t keep up stand to be left behind. 1. A Brave New Front of the House 2. The Server’s Favorite Six-Shooter 3. Give Your Menu A Golden Spike 4. The Internet Deals A Short Hand 5. And Can Also Give You A Full House 6. Computers Are Like A Good Mule "We just thought it was the right thing to do, both for our business and for our customers"On the cutting edge of food safety Tundra Specialties 888.594.4183 3
  4. 4. If the kitchen is the Wyatt Earp of a restaurant – ready to deal withevery order thrown their way with cool determination - then the frontof the house is the OK Corral – the place where that daily showdownwith customer’s expectations is decided in the blink of an eye.Because the dining area is so critical, many restaurateurs have in-vested in technology here first, with the goal of simultaneously im-pressing and serving customers more effectively, and maybe get-ting a little publicity to boot. Here are 4 ways to rope technology into changing the dining experience:Put John Wayne TV, it’s easy to change specials and rotate tion into more general entertainment.On The Flatscreen brand messaging often at almost no addi- This means you can not only advertise but tional expense. intermingle that advertising with entertain- That means you can experiment with mul- ment, which makes your advertising muchTVs have slowly been creeping further and tiple advertisements and specials until you more effective.further into every restaurant’s atmosphere for find the ones that work best. You can alsoyears now. It started with a small black and No doubt, investing in a digital media system offer many more promotions without havingwhite television in one corner of the bar so for your restaurant can mean a hefty ex- to worry about changing menus, which giveguys could watch the game. Now many bars pense up front. But if you leverage this tech- you the freedom to find new ways to attracthave several HD flat screens showing multi- nology properly, you can see very real boosts customers.ple games and news channels at once, and in sales, brand awareness, and customer sat- That’s No Barkeepeven dining areas have started to keep a TV Become interactive. Because it’s so easy to isfaction.or two positioned in strategic corners so cus- load new content onto digital media, res-tomers can keep up on sports and informa- taurants have a lot of leeway with trying new Some trailblazers way out on the edge of thetion. items and promotions. However, the only tech frontier have brought back some pretty way to find out if these new promotions areAs digital media permeates our lives more exotic goods to the food service industry. A working is through customer feedback.and more, a new era has dawned in how good example are robot servers and cooks,televisions can be used in the food service Interactive touch screen monitors can col- who have been taking on a larger role inindustry. Those screens don’t have to be just lect information from customers quickly and Asian restaurants from Singapore to Beijing.for sports and talking heads anymore. That’s in a way that engages and entertains the The Dalu Robot Restaurant in Jinan, Chinabecause the technology has advanced to customer. Interactive digital media can even takes its robots very seriously. The restau-the point where restaurateurs can engage collect orders from customers and give them rant made headlines when it introduced sixcustomers in new ways, and because that a direct line of communication to manage- mechanized waitresses last year. Resemblingtechnology is now widely available, custom- ment. golden mannequins, the robot servers followers themselves welcome and even expect to Entertain while customers wait. Digital media a fixed track and serve tables in order beforebe engaged with digital media. can also entertain customers while they wait returning to the kitchen to have their carts re-Consider three ways to leverage the digital for food or service. Studies have shown that loaded by human staff. phenomenon in your restaurant: customers who are entertained while they Plans are already in the works to roll out aAdvertise yourself and your specials. Well are waiting for service are much more forgiv- more sophisticated 2.0 version capable of re-placed digital media in your restaurant can ing about their wait times. filling drink glasses and even washing dishes.become a great vehicle driving sales. Not TVs have been used for decades to enter- On a more practical note, restaurants in Sin-only can you promote daily specials and tain customers in restaurants and bars. Digi- gapore have employed robotic technologyhigh margin menu items, you can drive brand tal media takes this concept to a new level to make food preparation faster and moreawareness with digital media campaigns. by allowing you to insert advertisements and efficient. An automated fryer, robotic noodleAnd because your medium is a flatscreen branded messages about your specific loca- boiler and rice dispenser allow the human 4
  5. 5. staff to focus on other tasks. Singapore has a short- guest – and make the experience in your restaurant truly unique. Saloon of the Futureage of workers, so the increased productivity pro-vided by automating simple prep chores more thanjustifies the steep cost of investment. If you think iPad menus are newfangled then the Inamo restaurant inThe novelty of being served by a robot would prob- London’s Soho district is really going to whet your whistle. Inamo hasably wear off pretty quickly in the U.S., where good left the old-fashioned iPad menu in the dust. The front of this housecustomer service is expected. The day when robots reckons like a futuristic vision: the tables are actually huge touchcan handle complicated tasks like dealing with an screen monitors illuminated by an overhead projector.irate diner unhappy with how their food is prepared The ordering system took some pretty heavy duty programming toare probably still a long ways off. create. That’s because all computers are designed to have only oneUsing robotic technology to handle simple, repetitive mouse pointer. Unfortunately, solo diners are a relatively rare thing,tasks in the kitchen, on the other hand, is something and since people want to select and order at the same time, onethat can be incorporated into food service much mouse pointer didn’t cut it.more quickly and easily. So Inamo developed a system that has multiple pointers. Tables are “activated” as soon as guests are seated. A light touch of the fingerMaking Menus Your is all it takes to flip through menu items and place their order. Drinks and food are served by a real person, but everything else, includingAce-in-the-hole payment, is handled by the touchscreen. Add an ultra modern inte- rior design and cool images splashed on the walls by more projec- tors, and this little restaurant makes the act of ordering food a fun,Every restaurateur worth his salt knows a good menu futuristic the best way to get customers hitched to your wag-on. They’re already in the door, seated, and hungry.Now it’s up to the menu and a well trained staff to An Interactive Table at Inamo Restaurant, Londonclose the sale.The importance of the menu is precisely why sometech savvy restaurateurs were among the first to seethe potential of the iPad after it was released lastyear. Already, some restaurants have explored thepossibilities of replacing menus with iPads, turning alaundry list of entrees into an interactive experiencefor guests.These iPad menus feature entire albums of picturesspotlighting each entrée from many angles, the in-gredients before they go in, and even video of thedish being prepared. And after a guest has exploredall of this digital eye candy to their heart’s content,they can even order directly from their iPad menuwith a simple touch of the screen.For now the cost of the iPad makes it apretty expensive menu, but the time is not The menu is thevery far off where a handheld device simi- mostlar to today’s iPad could be affordable importantenough to make it a very compelling op- piece oftion for restaurants. Like most technology, advertising ahigh-end establishments will probably be restaurantthe first adopters, followed by the rest of possesses.the industry as price points fall.An interactive digital menu has many intriguing ef-fects on the operation of a restaurant, effectivelydigitizing the marketing of entrees and automatingthe ordering process. This could free servers to focuson achieving top-notch customer service for every 5
  6. 6. Just as surely as an unshod horse will go lame, un- attended customers will leave your restaurant angry. Luckily the frontiers of technology have advanced to the point where servers and POS systems can truly become one. A case study released by Motorola last year showed how one pioneer in San Francisco’s Bay Area benefitted from complete integration of person and POS machine. Sam’s Chowder House, a high volume seafood restaurant that seats about 280 people achieved a return on investment on the hand-held devices in one month. That’s because check averages went up and table turnover times and labor costs went down. With this system, servers no longer have to write down orders and then re-enter them into the POS system. Instead, they enter orders directly into the handheld device. This allows servers to focus on customer service and sales, which explains the check averages and improved table turnover times. Labor savings were realized by Sam’s because more efficient servers means less front of house staff could serve the same amount of people in the restaurant. That makes the servers happy because they get more tables and therefore moreStore Location: tips. Staff turnover rates have plummeted since the introduction of the handheldSams Chowder House ordering devices as a result. Finally, these devices can also process credit cards,Half Moon Bay, CA allowing servers to run customer checks while standing tableside, further improv-Applications: Wireless infrastructure and mobile ing turnover times and customer service.computers used by servers to take customer The handheld ordering device is obviously the future in restaurant technology,orders. but for now the cost of the system is still prohibitive for most operations. Yes, Sam’sWirelessly send orders to the bar and kitchen realized an ROI in one month, but Sam’s also does A LOT of business ($6 million inSwipe credit cards tableside annual sales). The benefits listed above are admittedly direct from Motorola, whoMotorola Products: has an interest in hyping the good points, but they also make good logical busi-WS2000 wireless switches ness sense. Just imagine if your servers never had to leave their tables. Of courseAP300 access portsMC50 enterprise digital assistants (EDA) sales and table turnover times are going to improve.MSR5000-00R magnetic strip readers If you’re a smaller operator, wait for the day when these devices are much moreBenefits: affordable. It’s just like any new technology (HD TV, cell phones, iPads): they’re• Achieved ROI in one month always extremely expensive at first and then eventually become affordable to• Increased sales 30%• Turned tables 10 to 15 minutes faster the masses.• Increased per-person average $4• Improved employee retention & productivity• Reduced front-of-house labor by 12%
  7. 7. When the transcontinental rail- in life size, and the connection speed is fast road was completed in 1869, a enough to eliminate any lag between au- golden spike was used to secure dio and visual. Already businesses looking the final piece of track. Overnight to save on airfare have booked these suites communication and travel be- despite the steep price ($500 an hour). tween East and West became much, What’s in it for restaurants? much faster. The coast-to-coast rail- Well, if a hotel can generate stays with tel- road of our day is teleconferencing econferencing, then a restaurant can cer- – the ability to communicate visually tainly sell some meals to the same crowd. and verbally with someone else far Morton’s Steak House is on the cutting edge away in real time. of this trend, with teleconferencing capabili- hand, people are connecting online now Until recently teleconferencing was ties in dozens of its locations across the U.S. more than ever, and giving them a venue to largely unavailable to the pub- Of course, like most new technology, the do so while providing a great meal may be lic. Marriott Hotels has begun to cost to implement teleconferencing is be- a trend to watch in the future. change that with state-of-the-art yond the budget of most restaurants. But teleconferencing suites in select As communicating with other people re- over time, those costs will come down, and locations across the country. The motely becomes even more ingrained in our more and more restaurateurs will be able to investment started to make a lot of culture than it already is, communal meet- take advantage of teleconferencing as an-sense when the recession hit last year and ing points like restaurants will become a other service they can offer customers.businesses started looking for ways to slash more and more popular venue for remotetravel budgets. Even so, the market for expensive, quality tel- communications. We’re not quite there yet, econferencing between high powered busi- but the restaurateur who makes their restau-This isn’t choppy video on a laptop screen ness people isn’t exactly a large, untapped rant technology friendly is going to succeedbacked by lagging audio either. Three large resource for most restaurants. On the other in the new era of communication.screens display the people on the other side
  8. 8. In the last year, and a whole array of other discount coupon websites have stampeded the internet like buffalo in front of a prairie fire. These sites operate by getting large discount vouchers from restaurants (usually in the 50% range) and then marketing them to a large list of potential customers through email and the internet. The argument made to restaurants goes like this: bite the bullet on this deep discount coupon and you’ll earn a repeat customer who comes back for more, making you money in the long run. It’s a compelling argument, and already many restaurants have tried it. There is still quite a bit of debate about how effective these deep discount coupons actually are at getting a restaurant repeat business.The first school of thought is that butts in seats are better than empty Unfortunately, statistics are spotty on breakage rates. Many restau-chairs, no matter what it took to get them there. These restaurateurs rants hope for 30% (i.e. 30% of customers who bought a Grouponare indeed biting the bullet and hoping for some repeat business coupon for their restaurant never redeem it), but since it takes up todown the line. a year to find out exactly who is redeeming these coupons, business owners may have to wait awhile to find out how high their breakageThe second school of thought takes a more skeptical approach. The rate actually is.biggest fear with bringing in customers on such deep discountingis that all the new business is there because of the once-in-a-life- Thus it comes as little surprise that many restaurant owners view thesetime deal being offered by the restaurant, not because they have deep discount sites with a healthy dose of skepticism. That’s not toor plan to have any connection say these coupons can’t ever be an effective tool forwith that establishment. Without restaurants.repeat business, the Groupon Some restaurateurs have used deep discounting sitesconcept is completely sunk, be- The X factor in making a calculation like Groupon or BlackBoardEats to promote grandcause there’s no money in that about using a deep discounting openings or significant additions like a new dining roomfirst visit for restaurants. coupon service for your business: or patio or a new menu. In situations where it’s impor-Naturally, Groupon claims a 90% tant to build a lot of buzz very quickly because you’rereturn rate for customers who offering something new, a deep discount program can Number of guests whouse their coupons. That number be a great way to reach customers en masse.hasn’t been independently veri- use the coupon In these cases, you’re not as worried about gettingfied. It’s also a bit of a logisticalproblem to track customer visits VS. repeat business as you are about filling your establish- ment for a specific reason.after they redeem their Groupon Number who bought The jury is still out about deep discounting, but in cer-coupon. The fact that couponsare good for a year on average the coupon tain situations, like opening night, it can be a surefiremakes it difficult for restaurants way to pack your restaurant. For restaurants with an es-to know exactly how successful This is known as the “breakage rate” tablished brand and customer base, deep discountingtheir discount program is, since it and can really help a restaurant get appears to be a much more risky proposition.can take a long time for all cou- back some of the money they’repons to be redeemed. giving away on coupons that are redeemed. 8
  9. 9. The internet doesn’t always have to be a raw deal for restaurants.You just have to know when to hold ‘em, know when to fold ‘em, Too many customers. A great problem to have, right? Here are some key lessons the bigknow when to walk away…you get the picture. One gamble you chains have already learned:can certainly bet to win is online ordering - if you’re holding the rightcards. Be prepared. Internet sales aren’t going to come in during the af- ternoon lull. They’re going to pour in when everyone else is hungry:As some restaurants have discovered, however, you can also shoot right at lunch and during the dinner rush. When you first start out,yourself in the foot. assign extra staff. You don’t know how online orders are going toOne national chain launched online ordering a couple years ago shake out, and the last thing you want is to compromise serviceand it proved to be far too successful. Orders poured in and staff try- because you can’t keep up with online to fill online orders frequently got in the way of staff trying to take Manage order flow. As others have learned the hard way, hav-care of customers in the store. Customer service suffered, which is ing two teams, one working on walk-in customers and the otherthe last thing any restaurant can afford. devoted to internet sales, is a great idea in theory, but when those two teams are competing for the same food prep resources, prob- lems and inefficiencies arise. Make sure you develop a way to either give both teams their own resources or a way to integrate orders from both sources that allows your staff to deal with them in a timely manner. Be flexible. No matter how well you prepare, something is going to go wrong. Be ready to make adjustments and continue to tweak your service until you get it right according to your circumstances. For many restaurants, online ordering seems like a distant prospect. Don’t be fooled: this is a trend that will sneak up on the food service industry faster than most realize, and when the day comes for your restaurant, no matter how large or small, to accommodate custom- ers coming in from the internet, Be prepared. 9
  10. 10. In the old days, ifyou wanted helpwith the heaviest,toughest work dayin and day out, youused a mule.Some restaurants are finding that a good computer is just like a good up the lights and equipment all at the same time. All of these thingsmule was back then – dependable and ready to work hard every mean wasted energy and therefore wasted to save you a passel of money. The energy savings alone from having an automatic thermostat thatSome restaurants have discovered a great mule in the form of a drops the heat in winter and the cool in summer during off-businessfully automated energy management systems (EMS) to help reduce hours is usage in their restaurants. An energy management system goes much further. An alarm willEnergy management systems have been around for a couple dec- sound if the door to the walk-in has been left open for more thanades, but recent technological advances have really improved 10 minutes. Employees walk into work in the morning with the lightswhat an EMS can do. A modern EMS system can control air condi- already on and the equipment powered up and ready to go. Thesetioning, hood exhaust fans, lights, and even equipment power-ups increased efficiencies not only reduce the headache factor, theyautomatically via a central computer that doesn’t even have to be can translate into some real the same building. Granted, most smaller operations probably can’t afford a compre-Why is that good? Imagine an employee deciding it’s too hot and hensive EMS just yet. But as the technology gets cheaper and ener-dropping the thermostat to 50 and leaving it on overnight. Idle cook- gy expenses continue their inevitable rise, the day may not be far offing equipment getting well ventilated by a hood fan on full blast. when it makes sense for even a small restaurant to have a compre-Or maybe the morning shift manager arrives a little late and cranks hensive, automated system managing their energy consumption. Why not set up your own energy management system? It may not have all the same cool computer-powered features of a modern EMS, but it can be just as effective. Consider setting up some guidelines for your staff on how to power up equipment and turn on lights in sequence when opening your restaurant: 1. Train kitchen staff to dial back ovens, ranges, and broilers during downtimes and cut back the hood exhaust. 2. Post guidelines and expectations for energy usage like closing refrigerators, and hand out rewards for energy efficient practices. 3. And most importantly, buy an Energy Star rated automatic thermostat! It’s much less expensive than a fancy EMS, and accomplishes the same goal: automatically adjusting the thermostat during non-business hours.
  11. 11. he technological advances of the past decade have certainly made for a wild ride. Every business out there is still trying to figure out how to incorporate all of the new ways to engage and serve customers made possible by those advances. However, one thing is certain: the pace at which new technology becomes available is only going to get faster, not slower, and that means restaurants don’t have a moment to lose. This is the point where a skeptic might say, “Wait a minute, my restau- rant is doing just fine – the past couple years have been rough, but we got through it and now just as things are looking up you want me to spend a bunch of money I don’t have on new technology that won’t necessarily give me an immediate return on investment?” The truth is that a steady investment in technology can mean real returns for your restaurant – just look at what online ordering has done for some cutting edge national chains or how iPad menus have changed the way customers order food. Some of these trends can seem a little far-fetched, like hosting teleconfer- encing events for customers or employing robot servers. At the same time, 10 years ago a site like Groupon seemed equally implausible, and yet the restaurant industry finds itself grappling with how to deal with mass internet discounting today. Maybe robots and video phones aren’t all that far off after all. No matter how you look at it, the game is changing, and that leaves the food service industry with two choices: get on the train or get left behind. Those that choose to venture to the frontiers of technology will find themselves in green new pastures, where they can stake out the best homesteads and wait for the rest to catch up. 6 ways technology is changing A Brave New Front of the House 4. The Internet Deals A Short Hand The Server’s Favorite Six-Shooter 5. And Can Also Give You A Full House Give Your Menu A Golden Spike 6. Computers Are Like A Good Mule Like what you LeaRned here? Follow us! KNOWLEDGE IS {FREE}The Back Burner A restaurant blog Learn Renew Manage Market Protect FollowGo to Specialties Tundra 888.594.4183 Go to 11