Technology is often cited as a solution to the problems plaguing the bar and restaurant industry, whether it’s labor issues, supply chain woes, rising costs, or something else. However, according to a recent survey by SpotOn, which provides all-in-one software for restaurants, 56% of surveyed restaurants said they do not currently use technology to manage all aspects of their businesses. Family/midscale restaurants (64%) and casual dining restaurants (62%) are especially behind in utilizing technology. So there is room to grow with this solution.
The SpotOn survey studied 300 operators from independent restaurants and small restaurant chains across both full-service (FSR) and limited-service (LSR) concepts to determine the challenges they’re facing and how they are using technology to help tackle those challenges.
As for their top challenges, surveyed restaurant operators listed increased food costs (29%), higher labor costs (24%), and employee retention (21%) as the top three challenges they expect to face in the next six months. 23% of restaurants cited rising operational costs as the primary area where they’re using technology to manage challenges.
Overall, 75% of restaurant operators said they plan to adopt new technology in 2023, with 71% indicating they plan to increase spending on technology in 2023. With so many operators seemingly planning to make 2023 the year of tech, we spoke with a few providers about how to best use these solutions to tackle some common problems in the industry.
Staffing Shortages
In SpotOn’s survey, staffing shortages were in the top three concerns, with 12% of restaurants listing this as their primary concern.
Retta Kekic, chief marketing officer of Qwick, a professional platform that connects businesses with talented industry freelancers to fill shifts in real time, puts it into perspective, “According to the U.S. Travel Association and data from October’s U.S. Bureau of Labor Statistics report, leisure and hospitality has experienced a surge in ‘job quits’ as a result of the pandemic, and the sector’s ‘job quits rate’ remains substantially higher than that of the overall economy. More than 840,000 leisure and hospitality workers quit their jobs in September, representing 21% of the 4.1 million Americans who quit their jobs overall. Such high quit rates within the industry, combined with other job options, has made it difficult for restaurant and hospitality businesses to find workers.”
So, how can tech help? In two ways: finding staff and automating processes so restaurants can do more with less.
Finding Staff: It can be a tedious and expensive process to find and hire new staff members—especially given the lack of experienced workers in the current market. “Overall, restaurants and bars are becoming more open to adapting technology to bolster operations and trusting a shift-based solution to staffing,” says Kekic. “Traditional hiring processes take up valuable hours and resources to find, interview, vet, and train talent, with turnover in the industry remaining extremely frequent. And staffing agencies are inefficient and typically can’t keep up with the speed of the industry.
“By turning to tech and a proven marketplace of vetted, qualified, and skilled freelancers, businesses can staff shifts easily and flexibly with talented individuals and without investing time and money into onboarding employees that have a high likelihood of dropping off.”
Kekic says while bars and restaurants use technology like Qwick to fill shifts in a pinch when someone calls out, they also use it when looking to fill times of increased labor needs (the holidays, for example). “Many restaurants have also switched to using Qwick to fill recurring shifts instead of hiring permanently for roles such as dishwashers, which is a great way to rethink roles within a restaurant or bar and provides more flexibility,” says Kekic.
To ensure a good match, when bars/restaurants post shifts, the platform guides them to provide specific details so they can be paired with freelancers who are a good fit for each specific shift, business, and needs/skills.
Automation: The other solution is to use technology to work more efficiently with the staff a bar/restaurant does have.
“What we’re hearing now from our restaurants is I tried to raise the salaries, I’ve offered benefits, I still can’t fill my staff up,” says Peter Dougherty, general manager of Hospitality for Lightspeed, a commerce platform for independent retailers and independent restaurants with complex workflows. “So now they’re turning to automation because that’s really the only way out. How do I do more with less people on my floor? How do I maintain the same level of service?”
One of the ways tech like Lightspeed enables restaurants to do more with less is enabling waiters to use mobile payment/order systems so they can manage more tables without having to run back to a central POS system. “[They] can manage five instead of four tables—that’s a 20% reduction in front-of-house labor costs, which is a meaningful impact to the bottom line for restaurants on thin margins.”
Technology can also provide staff with powerful data insights to enable them to more effectively serve guests. For example, Dougherty says Lightspeed has the capability to inform a server that a guest is more likely to return if they recommend a certain entrée over another. “In a world where diners can’t afford to eat out as often because of inflation, making sure you’re pulling that customer back to your restaurant becomes that much more important,” he says.
Guest Experience
Which brings us to guest experience. Alongside quality food and drinks, guests are demanding an experience when they go out, and it can be challenging to provide the expected level of service when a restaurant is faced with rising costs, staff shortages, and more.
Austen Asadorian, senior vice president of Sales at SevenRooms, a guest reservation and management tool, explains that technology can help in building and maintaining relationships with guests to help drive loyalty and increase profitability, “A direct guest relationship not only allows an operator to create a personalized, incredible experience for their guests, but also helps create a better way for restaurants to re-engage with their most loyal guests to drive repeat business and revenue.”
Tools like marketing automation can help drive customer engagement by giving operators the ability to reach every one of their guests via email and encourage them to come back in for a perk like a free appetizer or their favorite cocktail.
Other tools, like requiring deposits for larger parties during the busiest shifts, can help reduce no shows and cancellations, as well as the resulting lost revenue.
Capturing guest data and making the most of it is also important for guest relations. “To ensure they are maximizing profits, it’s crucial that operators realize the importance of prioritizing ownership of guest data to enable a direct relationship with their customers,” says Asadorian. “Technology provides staff with the information needed to make connections with guests and understand who they are and what their preferences are.”
Operators can then use those preferences and that data to offer personalized experiences, like the option to pre-purchase a bottle of champagne for a celebratory event, or the option to add on a special experience like a wine-pairing with the meal.
Barriers to Tech Adoption
Despite the many benefits to tech, there is obviously something keeping restaurants from investing in it, and according to the SpotOn survey mentioned earlier, the top three barriers are concerns about cost, staff training, and speed of service/repairs. So it’s important operators choose a system that is both easy-to-use and reliable.
Another frequent concern of bringing in technology is that it will fundamentally change the experience of visiting a restaurant by removing the human element. But Sevenrooms’ Asadorian argues that this is not the case. “The role of tech in today’s industry is not to replace the human factor or eliminate jobs, rather it is to amplify the human role in hospitality and to help operators enhance the guest experience. Hospitality is inherently a human-first industry and is rooted in delivering a special and memorable experience no matter what—even something as basic as having the wait staff know you by name at your favorite restaurant. Technology can only make this better.”
Plan to Attend or Participate in Bar & Restaurant Expo, March 27-29, 2023
To learn about the latest trends, issues and hot topics, and to experience and taste the best products within the bar, restaurant and hospitality industry, plan to attend Bar & Restaurant Expo, March 27-29, 2023 in Las Vegas. Visit BarandRestaurantExpo.com.
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