TOP RESTAURANT TECHNOLOGY TRENDS R E I M A G I N E D D I N I N G E X P E R I E N C E ABDULRAZAQ ALHARBI Talabat Menu CEO & Co-Founder 2023 www.talabatmenu.com 40% M O R E S A L E S E C R E T F O R Introduction 3 The Tech Upgrade 4 Integrated System to the rescue 5 Kitchen automation for efficiency 6 Increased data intelligence 7 The Future Dining Experience 9 Automated order-taking 9 cryptocurrency as payment option 10 Conclusion 11 After the chaotic 2020 and 2021, 2022 brought some normalcy to businesses. Among the most heavily impacted industries by the COVID-19 pandemic, restaurant and hospitality businesses remain at the forefront. The industry weathered lockdowns, staffing shortages, business shutdowns, and now rising inflation. The COVID-19 pandemic has been a major disruptor for the restaurant industry, so much so that it would be difficult to talk about any trends ahead without any mention of it. Fortunately, technological innovation has allowed us to overcome these obstacles. Restaurants of all sizes were quick to embrace technology, and so did the customers. We saw an increase in food delivery, and more and more brands pivoting to the cloud kitchen or ghost kitchen model. There hasn’t been a time in history when technology and the restaurant world was this intertwined. It is safe to say that technology will also help us sail through the uncertain times ahead of us. While we may be years away from dining in the metaverse having digital burgers and digital drinks, here are some of the key technology trends that can help you future-proof your business in 2023. Introduction 3 | Top Restaurant Technology Trends for 2023 The tech upgrade Back in 2020 and 2021, as the world reeled under lockdowns, the restaurant operators had to fast-track solutions allowing diners to order online and serve unique digital experiences. The restaurants had to change their entire way of existence while adhering to government protocols. Though the journey was heroic, this change was not without issues. In restaurants of all sizes - from quick service to fast food to fine dining, the digital tools adopted during those times were often different vendors. These tools struggle to seamlessly pass information from front-of-house to back-of-house while also creating several operational issues and security concerns. As we step into 2023, new priorities have emerged, such as interconnectedness and the need for a unified platform. As per a report by SpotOn, 75% of restaurant operators are likely to adopt new technology in the year ahead.[1] The fine-dining restaurants are ahead of everyone with 85% likelihood, followed by fast-casual at 83%, and QSRs at 78%. Likelihood to adapt new technology systems in the next 12 months Overall Quick Service Fast Casual Family/midscale Casual Dining Fine/Upscale/Gourmet 34% 41% 18% 6% 44% 34% 14% 9% 3% 14% 58% 27% 22% 44% 24% 10% 39% 31% 24% 6% 35% 50% 15% Very Likely Somewhat Likely Neither likely not Unlikely Unlikely 4 | Top Restaurant Technology Trends for 2023 The research also indicated that traditional POS is the most widely used technology piece by nearly 9 in 10 operators (87%). Things, however, are set to change. POS remains at the heart of restaurant operations. It solves many issues but has been the cause of many, especially in recent years. There are disparate solutions for food ordering, QR code ordering, kiosks, payments, and many others. All these tools are built differently and have varied take on restaurant operations, and ultimately cause silos. It seems like a natural progression only for the restaurant industry to adopt a cloud POS strategy. That being said, it remains to be seen how this implementation will look in practice. An increasing number of enterprises are interested in acquiring new technologies. At the same time, there is also a significant number of CIOs and CTOs who feel stuck with their existing technology because of its limitations. While there is no right or wrong answer when it comes to the comparison between building vs. buying the restaurant technology stack. It all depends on the unique requirements of a business and how it operates. We’ll see a lot many conversations happening around the topic, and more enterprises will be much more likely to invest in centralisation of technology in 2023 than before. Integrated systems to the rescue 1 In a research conducted by Talabat Menu in collaboration with various Hospitality Associations, it was found that 71% of respondents plan to make POS purchases for improved integration with other systems and cloud migration.[2] A similar sentiment echoed in an innovation forum hosted by Leap Saudi Arabia Conference 2023 in Riyadh[3], where it was found that around 45% of restaurant operators struggle with a lack of integrations and agility in their legacy technology. What are the most unbearable challenges of Legacy Technology 30% 15% 11% 7% 8% 8% 5% 16% Integration lock of Agility Solution Completeness Scalability Data Latency & Inaccuracy System Downtime Upgrade Process Hardware Dependence 5 | Top Restaurant Technology Trends for 2023 In the restaurant industry, there is no shortage of solutions to help with daily operations. However, the real challenge lies in ensuring that all of these different systems are able to integrate and communicate effectively. With so many providers vying for attention, it can be difficult for restaurants to select the solution that best fits their needs and will work seamlessly with their existing technology. Restaurants will seek tightly integrated systems across all areas of operations including the front-of-house (FOH), back-of-house (BOH), and out-of-house (OOH). Brands will strive to simplify operations to cut down on redundant administrative tasks and reduce cyber risk. Having a standalone POS (point of sale) platform would not suffice. The front-of-house technology will drive guest experience and play a significant role in business management and strategic decision-making. From order-taking to payment processing, there will be an increasing shift towards technology that does not require much hand-holding and reduces the room for errors. Ahmed Almuwallad, CTO & Co-founder, Talabat Menu says, While an increasing number of restaurants are already working on bringing orders from all food delivery aggregators, it is crucial to know that true seamlessness requires going deeper than this. Restaurants must keep the menu at the center of their operations and strategies. Only with this kind of central control, the POS can ingest changes to pricing, menu items, configuration, and menu structure while also providing dynamic insights on customer behavior and preferences across all touchpoints. Kitchen Automation for Efficiency 2 The restaurant industry has been greatly impacted by the increased demand for delivery and takeaway orders. With this, restaurants are now facing a challenge to keep up with the demands of their customers while still delivering a consistent guest experience. This can only be achieved if they streamline their kitchen operations to ensure they remain efficient and effective in their service. Restaurants have started equipping their kitchen with digital technology that helps improve their back-of-house processes and reduces inefficiencies. A streamlined kitchen that is connected in real-time with the front-of-house operations, results in increased efficiency. With the use of technology, you can automate tasks 6 | Top Restaurant Technology Trends for 2023 "We need to change how we look at data. Today, customer data is not all about marketing; it’s about intelligence. It is about knowing how a customer consumes the menu, the frequency of visits, ticket prices, and other indicators." Ahmed Almuwallad, CTO & Co-founder, Talabat Menu like organising orders from different sources, inventory tracking, resource optimisation, food preparation, and order management across all locations from a central location. Increased data intelligence 3 The restaurant world has historically been lagging in terms of its ability to use data analytics, but it is catching up. Restaurants collect data from various touch points - from supply chain to the table i.e., farming data, shelf life data, inventory data, kitchen efficiency data, sales data, and much more. Other than this, there are other kinds of data that go beyond logistics, such as demographics, engagement, and behavioural markers. 7 | Top Restaurant Technology Trends for 2023 Doing so, helps you cut costs and frees up your staff and cooks to provide improved customer experiences. It’s a win-win for your customers, staff, and business. This data is used in various ways - some are visible to customers while others are not so much. The insights derived from customer data help in marketing, levelling up customer service, increasing engagement, making strategic business decisions, bench-marking, and so much more. In the year to come, there will be an increased focus on consolidating different streams of data. Having a unified data stream will significantly lower the need for manual data audits, reconciliation, and scope of errors. It will also make it easier for decision-makers to access real- time insights across the data flow. In the 2023 POS Software Trends Report by Hospitality Technology, it was found that restaurant operators are keen on using data for digital engagement, menu optimisation, and streamlining payments followed by the loyalty program, up-selling, and personification of offers.[3] 1 Percentage of survey respondents 71% 71% 71% 57% 43% 43% 29% 14% Digital Engagement Menus optimization Streamline payments Loyalty program Upsell or discount offers Personalised offers Optimize staffing Dynamic Menu 8 | Top Restaurant Technology Trends for 2023 57% 57% Optimize inventory Line busting at drive-thru Using data to understand customer behaviour has become a top priority, and it is also driving businesses to upgrade their tech stack, highlighting the need for real-time business intelligence and predictive analytics. Other factors include the proliferation of online payments, self-service, and online ordering. "After 80 percent of a restaurant's revenue come from 20 top- selling items, investing in and using a restaurant customer data platform can improve your garnered consumer satisfaction and help you achieve stronger advertising results. Marketing and customer data tools can help you identify and address the most- qualified customers, which will stimulate successful branding and marketing." Ahmed Almuwallad, CTO & Co-founder, Talabat Menu This tech upgrade requires the centralisation of all key operations to deliver consistent customer experiences across all touch-points, such as drive-thru, self-ordering kiosks, curbside pickup, delivery, and more. The Future Dinning Experience Expect the use of technology to become more prevalent as the restaurant industry continues to evolve. Customers are already looking forward to restaurants suggesting menu options based on their order history. To continue providing the personal touch, restaurants are also exploring technological additions to curate experiences based on trends, promotions, or even weather. Research by Fast Casual found that 8 out of 10 U.S. consumers use voice search to find restaurants.[4] Another report says that, 9 | Top Restaurant Technology Trends for 2023 Here’s how the dining experience at restaurants may look like in 2023. Automated order-taking 1 64% of U.S. consumers are interested in using voice AI to order food.[5] Noticing these trends, QSRs and fast casual restaurants especially are adopting voice-based technology and working to make the food ordering experience more seamless. Among these restaurants are popular chains like Domino’s, KFC, Pizza Hut, and Chipotle. Menus are being served up by voice assistants on their mobile apps, drive-thrus, and drive-ins, making it easier to order meals for customers. These interfaces are a faster and more user-friendly substitute for long menus and frequent substitutions to the order-taking process. Instead of having to use the keyboard to access menu items, customers can simply ask the voice assistant, customize what they want, and have it ordered in seconds. Another key element of voice-enabled interactions is personalised experiences. With a few voice commands, the voice assistant can pull past order history and preferences and offer relevant results that engage the customer in a better manner. The restaurant industry understands customer preferences quite well, and we will see more and more brands leveraging the complete range of automation technology in food ordering and delivery experiences. While consumers continue having mixed feelings towards cryptocurrency, its use has become widespread in recent years - and several restaurant enterprises are taking note. Among other top brands that have started accepting crypto are Subway, Yum! Brands, Chipotle, and Starbucks across a few locations. 10 | Top Restaurant Technology Trends for 2023 New age payment options 2 As per a survey conducted by PYMNTS in collaboration with BitPay, 56% of crypto owners are likely to use cryptocurrencies for restaurant or food delivery purchases or services.[6] The restaurants foraying into the crypto are experiencing some benefits. The biggest benefit being it increases speed and reliability in transactions. As the currency is decentralised, people can make transactions without worrying about the bank’s approval. On the other hand, restaurant owners can avoid bank fees for accepting cryptocurrencies. The main risk with cryptocurrency lies in its price volatility. Because of this, the restaurants have started putting a cap on the transaction amount and limiting the number of transactions. Another challenge is that most cloud-based POS today are not built to handle crypto payment, making bookkeeping more difficult. This, however, is changing as an increasing number of tech companies are building solutions for this need. Reduced food fraud Reduced food waste Improved consumer information Increased food safety Increased profitability Reduced cost for the consumer While it is true that blockchain technology is in its infancy, it has the potential to replace manual paper records with electronic data that is much more secure and boost traceability in the food and beverage industry. Other key benefits include, How this technology will impact the food industry at large, remains to be seen. There might be some steep learning curve among early adopters, however, this technology holds the potential to alter how we, as consumers, dine or purchase food. The Future Dinning Experience No matter what 2023 brings, it’s important to keep track of the biggest changes that are happening around. Most of these changes are taking place in how customers interact with restaurants and how restaurants operate day in and day out. 11 | Top Restaurant Technology Trends for 2023 As technology advances, we will see a lot of changes in the traditional concept of restaurants. It is set to change even more in the year to come. The parking lot is set to become the new dining room. QSRs will heavily invest in drive-thru experiences. Cloud technology will become a central part of restaurant operations. As long as you are aware of the changes happening around you, you can be confident that you’ll be ahead of the curve. Conclusion Refernces 1. Garrett Calcaterra. (2022, November). 2022 State of Restaurant Tech Report. SpotOn.com. https://www.spoton.com/blog/2022-state-of-restaurant-tech-report/ 2. Talabat Menu. (2022, December). Cloud Technology for 10x Enterprises 3. Hospitality Tech. (2022, December) 2023 POS Software Trends Report: Leveraging Data & Analytics. Hospitality Tech. https://hospitalitytech.com/2023-pos-software-trends-report 4. FastCasual.com. (2018, August 15). Study: 1 in 4 consumers who gets a restaurant result in voice search visit that restaurant. FastCasual.com. https://www.fastcasual.com/news/study-1-in-4-consumers-who-get-a-restaurant-result-in-voice-search-visit-that- restaurant/ 5. Eric Hal Schwartz. (2019, October 17). 64% of Americans Interested in Ordering Food Via Voice Assistant: Survey. Voicebot.ai. https://voicebot.ai/2019/10/17/64-of-americans-interested-in-ordering-food-via-voice-assistant- survey/ 6. PYMNTS. (2022, November 22). Crypto Contagion Sends Coins and Companies Tumbling. PYMNTS.com. https://www.pymnts.com/cryptocurrency/2022/crypto-contagion-sends-coins-companies-tumbling/ Talabat Menu Our platform is built to increase profitability for restaurants and improve the diner experience utilizing data driven approach. Trusted by 1000+ resturants For more information about Talabat Menu, Please contact us: KAUST Thuwal 23955, Saudi Arabia W: www.talabatmenu.com | E: info@talabatmenu.com T: +966 56 585 6593