Technology

Restaurants can't afford to avoid contactless tech

In an entirely ironic sense, the COVID-19 situation has completely changed how restaurants think about digital technology, from "Well, I'll get it someday, don't need it now" to "If I had done this a year ago, I'd still be in business."

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July 30, 2020 by Breck Hapner — Director of Marketing, Chepri

The digital-forward "new reality" for restaurants has arrived. Contactless solutions are nearing salvation status while the industry seeks one app to rule them all.

At this juncture, the pandemic has forced restaurants to reconsider how they must adapt their business models and update digital technology in order to survive.Investing in technology is no longer part of a yearly one-stop, one-hit plan. It has become a daily struggle to have the right solutions in place as the guest appetite for convenient and seamless experiences evolves with the trials and tribulations forced upon us by the virus. Decontamination procedures and social distancing protocols aside, the ways restaurants use digital technology and the types of digital technology consumers demand have become focal points today, as the pandemic continues to ebb and flow in the U.S.

It is impossible to ignore how many of our choices have been conditioned by processes attached to the apps and platforms we use every day, without a thought. With the rise of the virus, many restaurants not offering contactless solutions have either closed or are on the verge of doing so, leading to an all-out assault on the innovative technology front. But, the "new reality" demands continuous, fluid change, not simply a hard, singular pivot.

Never before has the restaurant industry been required to embrace and understand the need for the fast implementation of operational safety measures and digital technology at such a huge scale. In an entirely ironic sense, the COVID-19 situation has completely changed how restaurants think about digital technology, from "Well, I'll get it someday, don't need it now" to "If I had done this a year ago, I'd still be in business."

Is the jury still out?

Clearly, there is no longer any economic viability cushion for restaurants who have fallen behind the curve. Jeff Myers, Chepri CEO, said consumers learned to control their restaurant digital experience during state-mandated stay-at-home restrictions, and are now demanding safer engagement methodologies as part of the dining experience status quo.

"This crisis is really accelerating the future," Myers said. "The implementation of current contactless digital solutions for the restaurant industry will move much faster now. We will also see the rapid development of new, innovative technologies that accommodate and counter the effects of the pandemic."

Restaurants need to view digital upgrades as an investment, not an expense. This is because providing guests a better, safer experience when ordering, paying and receiving their food will add to the bottom line now and beyond COVID-19.
So either way you look at it, the restaurant industry is going to operate in a very different fashion as it slowly rises from this crisis, and many of the technology changes will be enduring.

The devil is in the data

According to Technomic Foodservice Industry Insights, an estimated 20% of independent and micro-restaurants will permanently close. I believe that is low-balling it.

Industry data is steadily being collected, but definitive projections vary due to a wide range of COVID-19 statistical uncertainties. For an industry that once generated $900 billion a year and employed 15 million people, the party's over and the hangover has brought a sharp sense of sobriety.

At the time of this writing, the National Restaurant Association said the industry had lost $120 billion since the onset of the pandemic, with 75% of restaurant operators not expecting to make any profit for at least six months. The NRA survey said that industry losses are expected to reach $240 billion by the end of the year. Talk about sobering data.

Are there enough dine-in customers for operators of temporarily closed restaurants to justify reopening? According to a recent NPD Group report, 72% of restaurant units are now in areas that permit some level of on-premise dining, and that number was estimated to increase by 79% by the end of July.

This makes sense. As revealed by recent federal data, nearly 4.8 million Americans returned to work in June. One out of every three jobs added was in a restaurant. Owners have been rehiring employees to handle in-store guests and are now also weighing strategic options to restore some semblance of normalcy.

So, with dining rooms reopening according to social distancing parameters, restaurants have mandates to maintain public health by keeping employees, guests and suppliers safe.nStill in shock from the pandemic, customers are seeking reassuring convenience and the absence of physical contact at all costs. Guests want and expect solutions that allow them to engage with restaurants without touching anything.

The rise of digital technology

COVID-19 has been steadily reshaping the digital guest experience through an expanded focus on contactless applications like enhanced ordering and payment, mobile tableside and curbside delivery. Because these web app technologies function in-browser and are portable to all digital devices, they provide ultimately safe solutions that allow order fulfillment, but involve little to no human contact.

Adoption has been swift, and the smartphone has risen to prime importance in the virus-food pyramid. Restaurants are racing to implement these mobile digital solutions and are seeking technology partners they can trust to provide value and mitigate risk, while solving real-time problems.

Though hit hard, restaurateurs are moving beyond mere survival, centralizing efforts around creating a stronger post-virus business model. With each strategic recalibration, centralized themes emerge.

The NPD Group's data shows that overall restaurant traffic has declined by 25%, but digital and delivery orders have increased to 65%, indicating that guests are unwilling to abandon restaurant convenience despite enormous obstacles. NPD findings also state that restaurant digital orders are projected to triple in volume by the end of this year.

For restaurateurs, this means the "new reality" will require the ability to offer guests an enhanced technology experience with apps positing solutions, such as streamlined digital ordering and easy contactless payments.

The NPD Group said the week that ended June 30 was the twelfth consecutive week of increased restaurant revenue, in part due to the cessation at that time of dine-in restrictions in almost every state. In addition, 67% of consumers surveyed by The NPD Group stated their top priority was to physically re-engage with their favorite restaurants.

Obviously, in addition to off-premise, there exists a growing public demand for dining on-premise, fueled by the promise of safe, convenient, contactless technology. As the potential for capacity grows, the main topic of discussion surrounds steps restaurants must take to protect against virus resurgence during reopening procedures, and beyond.

Consumers expect the same precautions whether using curbside delivery or when dining in, and restaurants need to have digital solutions in place that address a wide variety of pandemic-related concerns. Traditionally, restaurants have lagged behind on technology adoption and innovation, so it's no surprise that the industry is attempting to rapidly compensate for longstanding problems subsequent to the pandemic.

At the core, restaurants must be able to provide a technology blanket of digital assurance and confidence related to safety, so that the dining experience can be enjoyed without threat of exposure. By strategically future-proofing their digital technology tools, employees and guests can remain in good health and helping to increase profits and keep brands viable despite any disruptive impact from the environment.

Contactless solutions — the keys to the kingdom

Contactless app solutions allow in-store guests to view menus, order and pay directly from their smartphones, eliminating person-to-person interaction, which cuts risk. Guests no longer have to look at physical menus that have been held by other people or worry about exchanging credit cards, pens and receipts.

When in tandem or in a group, ordering and payment can be accomplished by each person using his or her own device while applying each person's respective rewards & loyalty points. This is also important from a data perspective since restaurants that provide their own ordering solutions, integrated with their own CMS and loyalty provider, are privy to all business intelligence gleaned from their guests. That information can, in turn, be used to form targeted marketing campaigns to promote the restaurant and improve operations.

But what are these digital solutions, and how do they work?

It is easy to become overwhelmed by the task of figuring out which technologies are right for your restaurant or the daunting task of understanding how to upgrade your digital systems to best serve your business model. First and foremost, it is about guidance. It is about transformation.

It is important to find a trustworthy digital technology partner able to offer the expertise and support needed to provide a roadmap outlining solutions best-suited for your restaurant. One-size-fits-all solutions run by agencies and shops that outsource the work end up being disasters that can be avoided by aligning with a technology company that is willing and able to work with your restaurant on all levels on a continual basis.

Once you have chosen your partner, your restaurant can move forward with the development and implementation of digital solutions that are specific to your wants and needs. As always, choose a company that can help you determine the best ways to use definitive technologies to reduce operational impact while providing proven, dependable and scalable results.

Remember, this is an investment, and your partner should be equally invested in working to provide ongoing innovative solutions, not just another sale.

"Partnering with an agile technology company that can quickly pivot and aggressively address your pain-points will improve solution quality and time-to-market," Myers said. "Speed and efficiency directly improve value and ROI, which should be primary considerations for any restaurant."

Let's face it, some restaurant concepts have been and are currently better positioned to survive in the new reality, and in some cases, even prosper during the pandemic. If you consider why certain restaurant business models are more successful than others during the crisis, you often find they are focusing on providing similar contactless digital technologies:

An enhanced digital experience

Increasing guest demands for convenience and safety have fueled a thrust toward better customer experiences through brand-specific, integrated digital app solutions. With contactless digital ordering, payment, delivery and text notifications built into your restaurant web app, providing an enhanced solution ensures a seamless, omni-channel experience from desktop to mobile to tablet to kiosk to KDS.

This type of enhanced digital experience injects the ease of use and confidence consumers are seeking to maintain health and safety considerations when engaging with restaurants to order food, increasing sales. Restaurants should focus on complete control of the digital brand experience to be successful in the industry. In today's environment, the digital experience restaurants provide guests defines success versus failure.

The core audience for most restaurants is comprised of young, tech-savvy individuals who have little patience for dinosaur-apps that frustrate rather than delight. Their time is precious and they don't like to wait. Moreover, they have grown up using technology and sometimes don't feel comfortable at restaurants without it.

Brand-specific digital app solutions drive bigger orders, increase operational efficiencies and allow first-party data capture so that higher-margin guests can be segmented and targeted for subsequent outreach. White-label solutions that push guests from the brand to third-party platforms may provide a poorer customer experience and, as a result, decrease revenue, so seek out a custom digital guest experience solution for superior financial results and market presence.

Mobile tableside

During the pandemic, we have seen how significantly mobile devices have influenced the development of contactless solutions, becoming an instrumental digital tool to use the power apps provide. Mobile tableside provides a standalone, contact-free way for restaurant guests to order and pay for food selections on-premise.

Unlike a kiosk, tableside ordering can provide a safer solution because guests interact with the restaurant digital experience through a surface only they touch without engaging a server, handling paper menus, providing credit cards or signing receipts.

When using a mobile web app, the guest can navigate digital menus, make food and drink choices, apply loyalty and rewards points and/or promotional offers, and pay. With on-premise mobile tableside capability in place, guests will come back to restaurants where they feel safe because the concern for a healthy environment is evident.

Curbside delivery

Like takeout or drive-thru, curbside delivery offers contactless convenience, as guests can order, checkout and pay before having food brought to them while seated in their cars. Putting an app in place that allows digital ordering and payment with SMS updates via push notification provides isolated food contact while communicating pickup and delivery times via location, whether that be off-premise pickup/delivery areas or on-premise entryways.

In addition to safely controlling socially distanced interaction, restaurants can use curbside delivery to help alleviate many costs associated with third-party delivery. Further, an enhanced digital guest experience solution can include ownership of direct ordering, payment, and delivery data, providing real-time access to business intelligence analytics allowing guest engagement insights that can be used to enhance operational protocols and marketing strategies.

Enhanced loyalty, rewards

According to a recent study by Bain & Company, "A 5% increase in customer retention produces more than a 25% increase in profit (because) return customers tend to buy more from a company over time."

Using a digital guest experience app, restaurants can use loyalty and gift card programs to grow relationships and keep guests connected and coming back for more. Restaurants can make recommendations, offer special promotions and provide add-ons while offering other benefits to personalize and enrich the customer dining journey.

Enabling the application of loyalty and gift card points and payments provides a contactless way for patrons to interact with restaurants, encouraging higher sales while capturing guest data that can be used for restaurant marketing and audience outreach initiatives to drive further business.

So, what's next?

To ignore the pandemic, or worse, rationalize reasons to avoid acting will only cultivate decay in the industry. For too long, many restaurants have resisted using potentially business-saving technologies. The window of opportunity is passing, while the burden of responsibility is growing. It's now or never.

The new reality dictates that economic endurance be tested by innovative flexibility. We have all seen how contactless solutions have accelerated digital development to provide a safer restaurant experience, while increasing the fortunes of those restaurateurs who've planned ahead.

Many insiders have pointed out that restaurants were in trouble long before the pandemic added a new layer of malaise, but right now the stakes couldn't be higher. The industry is drastically different now, but innovators and early adopters are not treating the disruption as a mortal wound, but as an opportunity.

"Like everyone else, I miss eating out at my favorite restaurants," said Myers. "I know things will never be the same, but it's my hope that through the smart use of technology we can mitigate the threats brought by the virus, ushering in a new phase of productivity and profitability for all."

"Normally the custom development process takes many months, sometimes years. What we are seeing is what happens when a pandemic collapses the technology adoption curve."