Technology
3 low-cost technologies that will increase restaurant profits
May 2, 2023 by By Zayn King-Dollie, Product Officer, Ordrslip, Zayn King- Dollie — Product Officer, Ordrslip
As restaurant operators enter 2023, most are still grappling with the delicate balance of costs versus revenue. According to research from the National Restaurant Association at the end of 2022, inflation is still greatly impacting restaurants, despite the vast majority having increased menu prices. The same study found 50% of operators think 2023 will be less profitable than the year before.
The coming months will mark a time when operators must consider how they can increase their profit without turning customers away, or making investments while managing tight margins. Many are looking at how different technologies can meet this balance, and 75% plan to invest in new technologies this year. The following restaurant technologies can help improve service, create more efficient processes at the front-and-back-of house, and have an overall positive impact on profits.
1. Streamlined ordering system
Simple technology additions can lessen labor burdens and help staff serve customers faster. Last year, customers reported feeling that they were getting less value at restaurants, and while this is mostly attributed to rising food costs, nearly 10% also attributed it to poor service. Implementing tech can help improve labor and the customer experience, and addressing some of these pain points can translate into more profits.
Streamlining back-of-house communications reduces food wait times and speeds up customer service. Kitchen display systems modernize the analog ticket system, allowing orders to instantly be sent to the kitchen where they are autonomously organized. This removes any confusion and the chance for miscommunication for those preparing the meals, which can lead to mistakes or slow service.
With a KDS, menu items are directly sent to their respective lines, so the salad, grill and fry stations each receive their parts from one order simultaneously. KDS often use visual cues like colors to show how long an order has been in the kitchen, notifying staff to focus on certain orders if others are taking a longer time to finish. These systems create a more efficient and effective kitchen staff that can work faster, focusing their attention on serving customers. This fosters a high standard of service that prioritizes experience and eliminates obstacles to that goal, leading to better outcomes that can surely deliver a high return that has customers coming back on a regular basis.
2. Smart Tech to reduce food waste
92% of operators today say that food costs are their most significant challenge. Rising food costs and chronic supply chain disruptions continue to impact menus. About three out of five restaurants have made changes to their menus to address this ongoing issue. With tight margins and operators hyper-aware of their budgetary restraints, smart technologies can help restaurants refine their menu to avoid waste, increase profit and eliminate needless costs.
Data is everything. Having systems that gather insights on customer ordering trends to understand how ingredients are being used are vital to reducing kitchen costs. KDS and POS systems can each respectively provide insights that can calculate ingredient usage based on the menu items ordered by customers. Operators may learn from these systems, for example, that over the past two weeks, customers have been opting for soups more often than salads as their sides. As a result, operators can make informed decisions based on this trendline and make informed supply ordering decisions to maximize revenue. By having access to real-time data and creating projections, restaurants are able to pivot when necessary to satisfy customer demand.
3. Native ordering apps
Mobile ordering and delivery have exploded in popularity the past few years — but are enough restaurants taking advantage through their own channels? Letting customers order for pickup and takeout through popular third-party apps has its benefits, but the drawbacks can cut into a restaurant's bottom line. These apps can take anywhere from 15-30% commission on every order. Menu prices are often inflated on these apps, which can be a major deterrent to customers when food prices are already higher than ever.
Restaurants that adopt their own native ordering app instead of using third-parties will experience higher returns on investment. Custom apps are priced with flat fees and provide a predictable monthly cost. Unlike third parties who are taking a cut from every order, a custom app can provide a tangible path for restaurants that will make the application pay for itself. After a certain number of orders, the rest for the month is pure profit for the business. It's also much easier for operators to control what people can order and when, avoiding issues when a menu item is unavailable or the kitchen needs to focus on on-premises orders. Restaurants today need to be able to justify budgets, and resources/tools need to be additive toward operations. These apps can often be an inexpensive way to create an additional digital line of revenue that creates operational efficiency and customer loyalty.
In tough economic times, it can be difficult for operators to feel like they can safely invest in new technologies and processes. In reality, when thoughtfully selected for a restaurant's needs, tech can very quickly pay for itself, and help restaurants operate at a new level. Ensure that staff are properly trained in using new tools and processes, and the value of tech will reveal itself in no time.
About Zayn King- Dollie
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