Technology

Operators report correlation between profitability increases, technology deployments

June 19, 2024

Known for operating on notoriously thin profit margins, the restaurant industry faces a triple threat of rising costs, increasing regulations and reduced consumer spending, requiring restaurants to leverage industry-specific technology. That strategy is working, according to results from a survey reporting that 61% of operators said online ordering platforms provided them a way to drive greater customer loyalty and repeat visits.

"The Restaurant Operator Intelligence Report," commissioned by SpotOn — a software and payments partner for restaurants and small businesses — surveyed more than 300 restaurant owners and operators of which 63% said their profitability increased in 2023. Many correlated technology deployments with faster customer service, better loyalty engagement, increased check averages and decreased labor costs as major contributors to their bottom lines, said Kevin Bryla, CMO at SpotOn.

"In today's tight economy, technology can be the key difference between a restaurant barely making ends meet and thriving," he said in the release. "Restaurants that utilize an integrated tech stack, which includes handheld devices, online ordering, order kiosks, QR codes, and more, will be turning over more tables, pushing through more orders, and making life easier for staff. Restaurant technology designed to enhance the experience for both staff and guests has a positive bottom-line impact, and the results of this survey prove it."

Moving the needle
According to the survey, a majority (51%) of independent restaurants reported increased profit margins, with small restaurant chains (79%) seeing the greatest increase in profit margins during the survey period. Survey respondents pointed to the benefits of technology in several key areas, including faster service, greater customer loyalty, higher check averages and overall higher profits. Highlights included:

• Online Ordering: 61% reported that having an online ordering platform led to greater customer loyalty and repeat visits, and 55% said it also contributed to higher check averages. It was also the top-ranked tech tool for increasing profits among respondents.
• Handheld devices: 58% said that handheld devices provided faster service, and 48% reported that they led to higher average check sizes
• QR codes: 61% said QR codes provided faster customer service, which in turn led to more tables turned, more guests served and higher profitability
• Order kiosks: 70% said they provided faster customer service, which resulted in more customer transactions and higher customer check averages. 57% also said that the technology helped lower labor costs.

Employee retention
Outside of the operational benefits of technology, respondents indicated that digital systems play an integral role in employee retention, which is a priority considering that:

• 56% said employee engagement was moderate or low in their restaurants;
• 20% said staff turnover is one of the biggest challenges in the first half of 2024.

Respondents indicated that increasing employee earning potential is the key to retention. With increased check sizes and faster table turnover, servers equipped with tech-like handheld point-of-sale devices could net larger tips and serve more customers, increasing their take-home pay while making their shifts run smoother. In research among SpotOn clients, restaurant operators found a 4.2% average increase in tables served when using SpotOn handhelds.

Technology adoption is increasing.
The use of technology in the restaurant industry is becoming more widespread, and a majority of operators surveyed expected to increase their investments in technology in 2024. Areas for investment included online ordering capabilities on owned websites and apps. Only 22% of respondents reported that they currently used a point-of-sale system that offereed delivery integration, but one in four said they planned to invest in owned-delivery technology in the next year.