On the Cusp of a Restaurant Revolution: Tech & Hospitality

Technology is playing a key role in the success of the hospitality industry today. (Restaurant Technology)

By Chip Klose, Chip Klose Creative and Restaurant Strategy Podcast

Restaurants as we know them were basically invented in Paris in the mid-18th century, and yet surprisingly little has shifted about the way we do things. A guest arrives, sits down and is presented with a menu. The guest considers their options and selects their meal. They then convey that information to the waiter, whose job it is to coordinate the timing of each course. At the end of the meal, the guest pays for what they’ve consumed and off they go on their merry way.

Sure, reservation software has replaced the big book at the front door and, of course, POS terminals have enabled better communication between the kitchen and dining room. But these digital stand-ins are simply being inserted into a system that was invented more than 200 years ago. Meanwhile, technology continues to redefine just about every other aspect of our modern world – including retail, banking, music, journalism, education, travel and more. And still, many in the hospitality industry resist the call. Now, you might say there’s something quite refreshing about that: “We are carrying on a centuries-old tradition, providing an analog oasis in a digital desert.”

But I’m going to make the case for technology. If properly integrated, I believe technology can make restaurants more hospitable. It can help us cut expenses, drive more revenue and (most importantly) provide a better guest experience. We are on the cusp of a restaurant revolution, and I believe we have the opportunity to create business models that are more sustainable, defendable and profitable to the ones we’ve known for the past two centuries.

Technology Can Help Us Cut Expenses
From the beginning, waiters have played a crucial role within the restaurant ecosystem. The diners are seated at a table; the chef is standing at the pass. I’m sure it was obvious to those early restaurant operators that an intermediary was needed — someone who could help manage communications between the dining room and the kitchen. But think of how inefficient a waiter’s job is. How much of their shift is spent either taking orders or putting those orders into the computer? These are huge chunks of time when they are ostensibly ignoring their other duties, not to mention the other guests in their section.

However, we now have technology to replace waiters. In fact, each of us has a device in our pocket that can efficiently and effectively communicate our needs to the different stations within a restaurant. If I’m ready for another glass of wine, shouldn’t I just be able to open my phone and order it? If I know what I want to eat, shouldn’t I be able to plug it into the iPad that’s placed on my table? Instead of 10 waiters a night, a restaurant could run with just five. The owner saves on payroll, the patron gets to order what they want when they want, and the waiters have larger stations and thus make more tips. Best of all, the staff can then focus on all the things that the computers can’t do, such as engaging with our guests, answering questions, doing table maintenance and driving sales.

Technology Can Help Us Drive More Revenue
When Subway first opened their doors in the 1960s, there was something novel about watching a “sandwich artist” prepare your sub. Over the years, tons of other restaurant concepts adopted that same model — Chipotle, Cold Stone and Sweetgreen, to name just a few. But is that experience really worth the additional payroll costs? Yes, if those employees can help drive more revenue. But think about the last time you visited a Subway. Would you say the guy behind the counter was interested in upselling?

There is now a considerable amount of data that shows kiosks and mobile ordering platforms can drive 15 to 20 percent more revenue per order than a human being standing at a register. Saleem Khatri, CEO of Lavu Inc., explained on the Restaurant Strategy Podcast how his company was able to help NYU increase sales in a matter of weeks, simply by implementing a new kiosk ordering system at their dining hall. Apply that sort of increase to Subway, a company with more than 42,000 individual restaurants. Even if they achieved just a 10 percent increase in sales, it would add approximately $1 billion to their top-line revenue. Is it right for every restaurant? Absolutely not. But for certain kinds of concepts, it could make a profound difference in overall profitability.

Technology Can Help Us Provide a Better Guest Experience
Of course, none of this matters if it doesn’t make for a better guest experience. We are, after all, in the hospitality industry, and guests return to places where they feel taken care of. So how exactly can technology help us take better care of our patrons? I’ve already given you a couple ideas, but let’s stop for a second and talk about the customer journey. What happens when someone makes a reservation online? They typically get a generic, auto-generated e-mail confirming the details of the reservation. Four people on Thursday night at 7 p.m. Thanks. But what a wasted opportunity! Instead, what if we embedded a video into the body of that e-mail with a slideshow of some of the dishes, or a two-minute welcome video where the chef talks about her culinary inspiration? That communication is a perfect opportunity to introduce ourselves to the diner, to get them really excited for their upcoming meal.

And what about the confirmation e-mail that goes out the day before their reservation? Instead of just asking the diner to click a button to confirm, what if we started serving? The script might go like this: “We’re partnering with Chartogne-Taillet all month long by offering a half bottle of their award-winning champagne for $XX. Click here to have a bottle waiting for you at the table.” They click, their credit card is processed, and we’ve found a way to extend our hospitality beyond the four walls of the restaurant.

Companies like Sevenrooms and Wisely are creating robust CRM platforms to complement their table management software. They integrate with many of the big POS systems to track not just frequency of visits, but recency and monetary spend as well. This allows operators to better segment their guest list to send out more targeted communications. If a guest only ever joins you for brunch, there’s probably no reason to inform them about the Winemaker Dinner Series you’re launching next month, right?

In the end it’s about serving our guests – meeting them where they are and nurturing those interactions to build stronger relationships. The restaurant revolution is here and if we let it, technology can play a key role in our success.

Here are just a few of the many technology companies that are leading the restaurant revolution.

Reservation Software and CRM:
SevenRooms (SevenRooms.com)
Wisely (
GetWisely.com)

Branded App Development:
Craver (
CraverApp.com)

Website Development:
BentoBox (
GetBento.com)

POS with Tableside Ordering:
Toast (
Pos.ToastTab.com)

Kiosk Software:
Lavu (
Lavu.com)

Chip Klose is based in NYC, where he runs the marketing agency Chip Klose Creative, working with chefs and restaurant owners to help them grow their brand presence and increase revenues. Klose is also the host of a weekly marketing podcast, Restaurant Strategy, where he talks about many of the strategies and tactics he uses day-to-day in marketing restaurants. To learn more, visit ChipKlose.com.