We’re now well into our third year of a new restaurant era. After a year of dramatic (and traumatic) shutdowns, and two years of supposed recovery plagued with supply chain complications, labor shortages and inflation, it’s become disparagingly clear that running a restaurant today will continue to be more challenging than in pre-pandemic times. The pandemic can no longer be used as an excuse, either: consumer demand is surging once again, but people are no longer willing to compromise on guest experience like they once were. The perfect storm sweeping the restaurant world keeps reinventing itself, and that metaphorical weather will continue well into 2023.
This isn’t to say that restaurants will struggle next year. Quite the contrary, 2023 holds wild growth potential for both new and legacy restaurant concepts adopting technology solutions to combat these industry-wide problems. After nearly three years of patchwork, innovative restaurants are embracing digital transformation—integrating technology into every possible touchpoint for guests and staff alike—as a long-term fix to their operational and financial challenges. Driving digital transformation is artificial intelligence (AI), which has shifted from testing behind closed doors to broad rollouts affecting food prep, ordering, delivery and management across millions of transactions every day.
If 2022 was a year of discovering and testing new technology, 2023 is the year that the best ideas begin to stick and reshape what the modern restaurant looks like moving forward.
Restaurants are allocating 65% of their IT budgets to maintaining existing solutions, according to HT’s 2022 Restaurant Technology Study
2023 will be a defining year for restaurants embracing digital transformation and AI to scale those innovations nationwide, and for consumers to begin developing a long-term relationship with AI. At the same time, restaurants that haven’t yet invested in technology and automation will either start doing so or risk the industry’s ongoing obstacles closing them down for good.
Relief In Sight
The labor shortage will see welcome relief, but not from hiring more workers. An uncertain economy and resulting layoffs from other fields may ease some pain around the labor shortage by increasing demand for restaurant jobs, with newly unemployed workers trickling back to restaurant roles they may have held prior to switching paths amidst initial COVID lockdowns. The key word here is ‘uncertain,’ however, and understaffed restaurants shouldn’t rely on a spike in job applications anytime soon.
Even if restaurants find do themselves flooded with worker demand, rising minimum wage laws could make hiring even more challenging than in years past. California restaurants will be especially impacted, with minimum wage reaching $22/hour for some restaurants. Grouped with inflation, rising food costs and naturally low-margin business model, many stores can’t afford to be what was previously considered ‘fully staffed.’
On the other hand, the clock has run out for businesses that restricted their hours, menus and attention to each guest due to labor constraints. Enough competitors have restored their operations to pre-pandemic levels and can accommodate this less-forgiving clientele. Understaffed restaurants that once took solace around safety in numbers will now be forced to find a solution or risk their guests choosing more appealing options.
That solution lies in automation, where savvy operators have delegated previously time-consuming and repetitive tasks to technology, freeing up their limited staff to focus on high-touch responsibilities. Voice AI, for example, automates the order-taking process at the drive-thru and over the phone, letting staff focus solely on fulfilment and in-person service and nearly doubling peak-hour productivity.
Top Priority: AI
Quick-service and full-service restaurants alike, encompassing menu types from across the globe, will invest heavily in automation for both front-of-house and back-of-house operations, serving both on-premise and off-premise dining. For most of these brands, which have been testing AI-driven solutions through much of 2022, this investment will go toward scaling these solutions across more, if not all, of their stores.
Using AI as much as possible to automate mundane or physically difficult tasks, so that staff can focus on the business of true hospitality, and gain real-world experience with cutting-edge technologies, was a theme echoed at MURTEC.
AI is already embedding itself into the DNA of many of the country’s leading restaurants, each gearing up for brand-wide rollouts to take their stores to the next level as quickly as possible:
- Chipotle is testing a kitchen management system to maximize production while minimizing food waste. It uses AI to predict demand and instruct staff on how much to prep and cook, as well as when to start cooking
- Jack in the Box is automating its fry stations using Flippy and plans to adopt a drink-making robot called Sippy.
- Domino’s has automated its phone orders at nearly 1,200 locations, where guests speak with a virtual assistant in the same way they’d speak with a physical team member.
With AI solutions demonstrating exemplary results in key metrics around customer satisfaction, staff productivity and same-store sales growth, 2023 will see expansions from pilot phases into mainstream rollouts. Widespread consumer adoption will be the critical next step. And while restaurants can expect to see a slight dip in performance during this transition period, when consumers are getting their bearings under them, they can expect to see the same increase in long-term performance demonstrated in their pilots.
About the Author
Ben Brown is VP Marketing at ConverseNow.Prior to joining ConverseNow, Brown served as Founder and CEO of TastePro, a restaurant marketplace platform that pioneered the category of self-guided food tours. He has held advisory roles for multiple startups in the foodservice and technology sectors. He oversaw content strategy and development for Princess Cruises during their MedallionClass app and program launch. He also served on the MGM Resorts International strategic operations team, working with the company’s restaurant portfolio.