Restaurants face a tougher environment

The restaurant business has become more challenging in recent years, especially for casual-dining. In the second quarter of this year, many chains saw flat or falling sales.

Competition appears to be increasing, with many new fast-casual chains, grocery store restaurants and a larger number of independent restaurants in many markets. Stagnant incomes for many Americans makes eating out a luxury for many.

Online shopping is reducing foot traffic at malls and brick-and-mortar retail outlets, resulting in fewer diners at many restaurants. Workers have even less time for a full-service lunch.

In total, restaurants face greater pressure to improve their efficiency and profitability given declining top-line revenues.

Technology can increase productivity in order to mitigate these challenges. For example, by reducing wait times, increasing table turns, allowing diners to order and pay, and allowing wait staff to serve more tables. In so doing a casual restaurant can be more competitive against a fast casual restaurant that has a lower cost structure.

Technology can also help raise sales in new ways. For example, games can provide a new source of entertainment, social interaction, and repeat business. The experience of dining is extended beyond the meal to include the social interaction. Diners who are “hooked” on a particular game may come back frequently just to play it.

Imagine also a new “event” enabled by technology. For example, a “Trivia Tournament”. Over a 3 day holiday weekend diners could vie to be the “Restaurant X Trivia Champion”. A tournament could be played in a single restaurant, or across a nationwide chain. Players would come in just to participate in the event, generating game revenue and incremental food and beverage sales. Some diners may even return multiple times to play additional times in order to raise their scores and ranking.

Information gathered via technology can be applied to customer recognition programs. Then leveraged to drive repeat business. More exhaustive and rapid data collection can also help identify popular new menu items or niche opportunities that can help pull in new diners.

A better experience can also drive repeat business in other ways. Consider the case where a restaurant operator can identify wait staff that consistently deliver the best service, as indicated by overall tip percentages earned or customer survey ratings. These top performers can be rewarded with the best shifts. As more diners receive this improved service overall customer satisfaction and repeat business increases. Such information can be difficult or impossible to gather manually, but easy to produce using technology.

Technology is a tool that restaurants can employ to take on today’s tougher environment.