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09 Jul 2020 / Outsourcing

The Future of Technology in Hospitality

James Middleton

by James Middleton

tech in hospitality

Like many, I started my working life in the hospitality sector – waiter, bar staff, KP, restaurant manager. Eventually I transitioned into running nightclub events.

What do these jobs have in common? Long hours and hard work for relatively low pay. Would I change it for the world? Absolutely not!

At that time, technology was an order pad, watch, calculator and a PC running Windows 98 that’s probably in a museum now! Technology has exploded since I stopped working directly in the sector but ‘Hospo’ still holds a special place in my heart, so my eyes are always drawn to the tech scene.

To emphasise this explosion, VC investments in restaurant technology grew from $800 million in 2018 to $1.9 billion in 2019!

What has traditionally been a slow sector in adopting new tech is now approaching a Technology Revolution. While I don’t believe Covid-19 is the catalyst, it could certainly be an accelerator.

The sector has always been led by consumer trends and preferences. This, in turn, is going to lead to the adoption of certain technologies. Like most people, I access almost all the information I need and carry out most of my “life admin” tasks using my phone. What’s more, at work I lean on data to drive decision-making.

So, why is this same tech not heavily present throughout the Hospitality Sector?

The future direction of tech adoption will be fuelled by several factors:

  1. A consumer preference for digital
  2. Safety
  3. Labour
  4. Sustainability

Customer Attraction & Engagement

For operators to be successful, particularly with Generation Z, they need to accept many current and all future clients will have grown up with smartphones. Those that can play on this with well thought-out marketing will be off to a strong start.

This intelligent marketing can be as simple as promoting specific events, new menu item launches, the venue’s sustainability mission, promotions or even rewarding loyalty with exclusive offers.

Ordering, Personalisation & Delivery

This is a huge topic when you dig into it but can be broadly broken down into convenience, data insight, labour management and – now top of most customers’ priority lists – safety.

Customers want convenience and they want it NOW! This is why delivery is popular, however the big aggregators on the market charge huge commissions on orders that simply don’t make the margins feasible for a lot of operators. There have been a number of tech companies coming out with fantastic low-cost alternatives to provide delivery whilst protecting profits.

This week’s hot topic (and not much of a prediction): Order & Pay through mobile solutions. This will be massive for several reasons:

  1. It’s very convenient for the consumer and easy for the operator – orders are fed straight to the kitchen or bar, payment is already taken, risk of incorrect orders are greatly reduced
  2. Reduces labour costs
  3. Staff can focus on customer experience
  4. It helps with social distancing
  5. Boris basically just told operators to get one

Not only does a digital solution streamline ordering and FOH workflows, but data can also be captured and connected to an individual. Operators can glean real data-driven insights into what menu items work and when they work, and use that data to build personalised customer engagement strategies.

Personalisation doesn’t just stop at engagement either. Requests like “No onions please” or “I want my fried egg very well done (because I am a heathen)” are as old as time. However, you can go further than that with tech, provide visibility on allergens and special dietary requirements. You’re even able to tweak meals based on Macro Nutrients, which for health nuts is pretty cool.

Back of House Digitisation

By digitising the Front of House (FOH) and Back of House (BOH), you can optimise the speed of order capture and streamline kitchen workflows. Not only that; at-table digital ordering saves staff a huge number of steps!

When BOH captures data, powerful things begin to happen. Initially, the kitchen workflow can run more smoothly, insight pictures on menu preferences can be built up and it’s far easier to keep track of the profitability transparency of different meals and the restaurant’s operations overall.

Stock control is optimised & far less time consuming, this in turn can be tied into the supply chain communicate efficiently with the producers, technology supporting the supply chain is also an area on the rise.

Visibility of the supply chain for the consumer is likely to be seen as increasingly important, not only from safety concerns but responsibly sourced produce (often local) is a hot topic.

When I worked in restaurants we threw out a disgusting amount of food and it’s something that really gets under my skin, my mum never let me leave the table when there was food on my plate – you get a dirty look if you take that approach with your section!

Approximately 1.3 billion tons of food is wasted each year, and yet we still have families struggling to feed themselves. Some of the best technologies I have come across recently have been food sharing or redistribution apps tackling both the sustainability and social issues of this topic.

Solutions that help kitchens to reduce the amount of food wasted with accurate inventory management will help operators stop wasting product and, in turn, improve their margins – seems like a no-brainer to me.

The Rise of Robotics & Automation

It sounds a bit sci-fi and futuristic, but we’re already close to this becoming a reality. The likes of Amazon, Deliveroo etc are already working on drone tech and robotic delivery solutions.

Just last week, Canada’s first fully automated restaurant opened in Toronto. Whatever your personal opinions are on the risks of AI, you can’t deny that’s pretty cool!

With rising labour costs and smaller margins, it makes sense that some operators go at least partially down this path. I particularly see this happening in QSR’s where convenience is preference over experience.

I am personally a fan of low-tech “old man” pubs where I can sit in the corner with a pint. There will be many that share this view, so whilst there is a technical revolution for some, there will still be venues providing a traditional experience… so all you Twitter hipsters can stop complaining!

Change presents challenges

All this shiny software is great but how is it powered? And where is it hosted?

I’m no technical infrastructure specialist but surely venues are going to have to upgrade their infrastructure, network and internet speed to power all of this technology.

There is a danger that all this technology removes part of the experience of dining in a restaurant or drinking in a pub, so it’s crucial that operators use this tech to support their staff to provide a better customer experience and focus on human interaction. There will be places where pure convenience and automation makes sense, but if I’m going down the local after work I want to talk to a person!

The Future?

The savvy operators will have spent the last three months reviewing all areas of their business and will now be looking to leverage technology that can attract and engage more customers, streamline workflows and increase profitability. As such, I expect we are going to see some of these tech providers grow exponentially.

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