Domino’s is trialing delivery by drone in Australia, while restaurant chains including Itsu, Bill’s and the Cheesecake Factory are letting customers pay via their mobile phones.
Such innovations enhance the dining experience while boosting convenience for guests and delivering a wealth of insight on customers’ habits that help brands further refine their offerings.
“Technology is a game-changer, both as an enabler and a disruptor,” says Adam Griffin, Director of Foodservice Consulting at JLL. “Well-conceived and executed technology is generally enhancing operational efficiency, and consumer engagement.”
Digital evolution, real-world changes
Nowhere has technology had a more profound impact on the food retail industry than in the development of on-demand delivery apps.
“Around the world, the biggest technology trend in food has been in building that connection between restaurants and guests,” says Griffin. “Apps like Deliveroo and UberEats have been able to connect the desire for restaurant-quality food with the capability to deliver it.”
For restaurants, the change is significant: On-demand delivery apps significantly increase the amount of food orders but restaurants don’t need the manpower nor space to cater for more guests.
“This is an inspired business model – businesses may pay 20 percent of profits to an on-demand delivery app, but they increase their customers by 30 percent without needing to pay for the real estate for those customers,” Griffin says.
Yet the growing popularity of food-to-go apps comes with challenges, especially for shopping centres which usually lease spaces to restaurants based on turnover. Because the additional turnover afforded by on-demand delivery doesn’t go through the physical space, restaurants don’t pay more on their lease, but the shopping centres must deal with the additional load of the turnover – for example, the extra waste generated, or the traffic of couriers coming to pick up orders.
It will fall to restaurants to adapt, Griffin believes. “Restaurateurs absolutely must redesign their spaces to accommodate the rising use of on-demand delivery apps,” he says.
For example, a restaurant could designate a service entrance and make a couple of new hires especially for packaging food-to-go. For shopping centers, a service bay would allow couriers to park their motorbikes. Major on-demand delivery companies might even invest in their own branded service area.
“There’s a lot of growing up around technology in food retail that needs to happen,” Griffin says.
The power of getting personal
Other food retailers are making use of technology to fine-tune how they attract guests. In London, Maxwell’s Bar invested in making itself a location in Pokemon Go, increasing revenues by 26 percent. Paris’s Wall Street Bar plays to its finance-centric demographic by updating the price of drinks every 100 seconds.
For shopping centres, fast, consistent Wi-Fi is the backbone of modernizing retail spaces. “Constant connectivity allows retailers to build digital connections with guests – in other words a relationship,” Griffin says.
Not only does solid Wi-Fi boost convenience for customers, connecting to customers’ smartphones as soon as they enter the mall delivers a wealth of insight to improve offerings – from understanding where shoppers may bottleneck, to streamlining visitors to food and beverage outlets.
For example, shopping centres might design an app that lets visitors virtually join queues at their restaurants, or push personalised discounts to their smartphones to direct the flow of diners. Specific restaurants could, like Restaurant Tang in Stockholm, have apps that let customers see meals before ordering them.
The risks of high-tech improvements
Technology can increase retailers’ potential – but as Griffin notes, it also increases their potential to fail.
Hyper-personalization of offers that turns out to be inaccurate can be irritating, and even deter guests from logging into networks or using apps. As well, making too much available – such as information about menu items – could end up drowning guests in unnecessary detail.
“The biggest risk is that technology makes a promise, but the physical world prevents the promise being kept,” Griffin says. A guest may be happy to wait 45 minutes, but not when an arrival time of 15 minutes has been promised.
Food’s future technology
Yet tech has a key role to play in the future of food retail. From self-ordering to automated serving to 3D printed food, fast-food restaurants are a good barometer of where technology can take food retail. Wendy’s and Panera are rolling self-service kiosks where customers can order and pay – with zero human interaction.
Self-service kiosks are now in use at every one of McDonald’s 14,000 U.S. locations – and even the deep-frying of its French fries is controlled entirely by automaton.
“The innovations that seem fun or unique now – like ordering from iPad, robotics, drone delivery – will become the dividing line between two types of restaurants: those that are more experiential, and lower-end restaurants whose service is fully automated,” says Griffin.
Rising labor wages mean that for fast-service restaurants to stay cheap, automated processes that replace human staff are likely to be adopted. Higher-end restaurants will therefore evolve to focus more sharply on an experience: from highly trained waiter service to sleek apps and virtual reality technology, all designed to enhance the on- and offline richness of a meal.
“The thing about technology is that it is inherently unpredictable but there’s no doubt that in 10 or even five years’ time, the physical and digital worlds will be much more intertwined than they are now,” Griffin says. “And food is as susceptible to advances in technology, and the structural change it brings as any other industry.”