This article will talk about a digital revolution in the bars and restaurants business. We will also look at how COVID-19 has affected the digital transformation of the hospitality industry.
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If you have been to a restaurant or a bar recently, you might have scanned the menu through a QR code, placed your order online, and paid through digital channels. As such, it might be safe to say that the pandemic may have expedited technological acceptance and innovation in the hospitality industry. Digitalisation is potentially being used in nearly every aspect of a restaurant’s operations, from the cash register to the kitchen to customer service.
Is digitalisation important for the restaurant industry?
According to a report by Statistica, the online food delivery market is expected to generate revenue of US$17,711 million in 2022 in the UK. Keeping this in mind, a digital revolution can possibly help restaurants and bars move beyond traditional dine-ins and expand to services like online ordering, digital kiosks, contactless payments, digital menus, food tracking etc. Digitalisation can also potentially help by collecting customer data like their name, phone number, and email address, which bars and restaurants can later use to send personalised food suggestions and target them for repeat purchases.
The way customers engage with businesses could also be changing dramatically due to new digital developments in the food industry. According to an article by Publicis Sapient, Domino’s revenue is up 160% in the last five years, all thanks to their focus on digitalisation. Domino’s operates on a delivery and takeaway model, promoting online ordering through their app and utilising in-house technology such as GPS-tracked deliveries.
The article also states that according to 74% of respondents surveyed for the Publicis Sapient’s Digital Life Index, one of the top three criteria affecting people’s restaurant choices is health and safety. Meanwhile, contactless technologies are ranked as one of the top three factors affecting restaurant choice, with 55% of respondents indicating that digital technology may make the customer experience safer and more efficient.
Benefits of digitalising the hospitality industry
Now that we have discussed why a digital revolution may bring about a change in the way the hospitality industry works, let us look at some of the benefits of using technology in the bars and restaurants sector.
Contactless ordering & payment
Since the pandemic started, most customers have begun placing the highest premium on hygiene. It’s reasonable to assume that most consumers may be more cautious while ordering food through a physical menu and making payments via a POS (point-of-sale) machine. In such a scenario, customers may be looking towards contactless modes of ordering and payment. In fact, a Square survey report states that 79% of customers prefer to buy through online kiosks rather than through restaurant staff, with 78% indicating that they like the convenience of using QR codes to order.
According to a report by Statistica, the interactive kiosk market value reached US$26.63 billion globally in 2020. The report also states that self-ordering kiosks —some of which can collect important customer data, cut staff expenses, and minimise the number of wrong orders— are one way that adopting technology has helped restaurants. This technology may also free up employees’ time to focus more on customer service and engagement.
Better customer experience
Using technology to serve customers may speed up and ease processes. Writing a manual bill of a customer’s order will likely not only take more time than printing a digital copy, but it may also be prone to human error and miscalculations. As a result, digitalising the order fulfilment process may lead to greater transparency and better customer service whilst also maintaining social distancing norms.
Automating mundane, tedious or repetitive tasks and procedures is potentially one of the biggest advantages of digitalising the hospitality industry. As per Square’s The Future of Restaurants Report, nearly two-thirds of restaurant owners believe automation would cover significant gaps in managing online orders. It also states that almost three out of every four restaurants report a labour shortage, believing that automated tools and applications can provide a solution. The report further states that 90% of restaurants surveyed think that automation would allow their employees to focus on more important tasks.
Challenges of using technology in bars and restaurants
Although technology has the potential to solve operational problems, it can also —at times— pose challenges, some of which are discussed below.
Lack of human touch
No matter how much we try to automate and digitalise the world around us, we humans may always look for either human gestures or the presence of another human around us. Technology may replace a major chunk of manual tasks around us, but finding the right balance between the co-existence of humans and automated technology can likely be a challenge.
Technological lapses and mistrust
Technology can never be 100% accurate, and there could always be scope for error. Since online transactions are dependent on digital devices and internet connections, people may also have concerns about transaction fraud. According to an article by The Morning Advertiser, 44% of Brits find it frustrating when QR codes and apps do not show the entire menu at hospitality venues. The article also states that 32% of respondents find ordering from QR codes in bars, pubs, and restaurants to be unreliable.
Restaurants and bars would most likely continue to undergo a digital revolution. That being said, the right mix of technological advancement coupled with diligent customer service may offer a sweet-spot for the hospitality industry in the times to come.