Diving Deep into the 2024 Restaurant Tech Outlook

Welcome to a deep dive into the transformative world of restaurant technology! In this blog post, we're unpacking the key findings from Nation's Restaurant News' (NRN) 2024 Restaurant Tech Outlook report. This report serves as a crucial compass for navigating the ever-evolving technological landscape of the restaurant industry. We'll be exploring operator confidence, investment strategies, the importance of customer data, and even the debate surrounding whether restaurants can have "too much tech." This exploration complements the insights shared in our latest podcast episode, Dishin’ Out Data & Serving Up the 2024 Tech Trends for Restauranteurs, where we spoke with Christi Ravneberg and Joe Donnelly from Informa Connect about the report. So, buckle up as we explore what the future holds for restaurant technology and how operators can leverage these trends for success.

About the Nation's Restaurant News Report

The Nation's Restaurant News (NRN) Restaurant Tech Outlook report is a comprehensive survey and analysis of technology trends within the restaurant industry. It's designed to provide operators with actionable insights into how their peers are leveraging technology to improve efficiency, enhance the customer experience, and drive profitability. The report covers a wide range of topics, including:

• Investment Priorities: Where are restaurants allocating their tech budgets?
• Data Utilization: How effectively are restaurants using data to inform decision-making?
• Vendor Relationships: What are operators' expectations for their technology vendors?
• Emerging Technologies: What new technologies are gaining traction in the industry?
• Challenges and Opportunities: What obstacles are restaurants facing in adopting and implementing new technologies, and what opportunities exist to overcome them?

The report is particularly valuable because it is rooted in real-world data collected directly from restaurant operators. This provides a realistic and practical perspective on the current state of restaurant technology and its future trajectory. As mentioned in our podcast episode, the report is an ongoing annual effort of collaboration between Nation's Restaurant News and Restaurant Business, supported by the sponsor community, including QSR Automation. This helps make the report a reliable source for the industry.

Key Findings from the Restaurant Tech Outlook

The 2024 Restaurant Tech Outlook reveals several key trends that are shaping the restaurant industry. Here are some of the most significant findings:

• Increased Focus on ROI: Restaurants are becoming more discerning in their technology investments, prioritizing solutions that offer a clear and measurable return on investment (ROI). This shift reflects a growing need to justify technology expenditures and ensure that they contribute directly to the bottom line.
• Importance of Data-Driven Decision Making: The report emphasizes the critical role of data in informing strategic decisions. Restaurants that effectively collect, analyze, and utilize customer data are better positioned to personalize the customer experience, optimize operations, and improve marketing effectiveness.
• Evolving Tech Vendor Relationships: Operators are increasingly demanding more from their technology vendors. They are looking for partners who can provide not only cutting-edge technology but also exceptional support, training, and ongoing value.
• Digital Marketing Investments: Digital marketing remains a major area of investment. Restaurants are investing in online ordering systems, loyalty programs, and targeted advertising to attract and retain customers.
• Cautious Tech Investments: Compared to previous years, operators are more cautious and discerning investments in technology. This is likely due to the economic uncertainties and the need to carefully evaluate the potential ROI of each investment.

These findings paint a picture of a restaurant industry that is becoming increasingly sophisticated in its approach to technology. Operators are no longer simply chasing the latest shiny object; they are carefully evaluating their options and making strategic investments that align with their specific business goals.

Operator Confidence and Data Utilization

One of the most encouraging findings from the Restaurant Tech Outlook is the increasing confidence among restaurant operators in their ability to utilize data effectively. This is a significant development, as data has the power to transform every aspect of the restaurant business, from menu planning to marketing campaigns.

However, simply collecting data is not enough. Restaurants must also be able to analyze and interpret that data in a meaningful way. This requires having the right tools and expertise in place. Some of the key areas where data can be used to improve restaurant operations include:

• Menu Optimization: Analyzing sales data to identify popular and profitable menu items, and adjusting pricing and offerings accordingly.
• Inventory Management: Using data to track inventory levels, predict demand, and minimize food waste.
• Customer Segmentation: Identifying different customer segments based on their purchasing behavior and preferences, and tailoring marketing messages to each segment.
• Marketing Campaign Optimization: Tracking the performance of marketing campaigns and making adjustments to improve their effectiveness.
• Operational Efficiency: Identifying bottlenecks in the kitchen and service areas, and implementing solutions to improve efficiency.

Restaurants that embrace a data-driven approach are better equipped to make informed decisions, optimize their operations, and stay ahead of the competition. As Christi Ravneberg mentioned in our podcast episode, investment trends and operator behavior indicate that operators are increasingly confident in their use of data.

ROI-Focused Investments: A Shift in Strategy

The Restaurant Tech Outlook highlights a significant shift in strategy among restaurant operators: a growing emphasis on ROI-focused investments. In the past, many restaurants were quick to adopt new technologies without fully considering their potential return. However, with increasing economic pressures and a more competitive landscape, operators are now taking a more cautious and strategic approach.

This means carefully evaluating the potential benefits of each technology investment and ensuring that it aligns with their specific business goals. Some of the key factors that restaurants are considering when evaluating ROI include:

• Cost Savings: Will the technology help to reduce costs in areas such as labor, food waste, or energy consumption?
• Revenue Growth: Will the technology help to increase revenue by attracting new customers, increasing order sizes, or improving customer loyalty?
• Efficiency Gains: Will the technology help to streamline operations and improve efficiency in the kitchen, service area, or back office?
• Customer Satisfaction: Will the technology help to enhance the customer experience and improve customer satisfaction?

By focusing on ROI, restaurants can ensure that their technology investments are delivering tangible results and contributing to the long-term success of their business. As Ben discussed in our podcast episode, ROI (Return on Investment) is becoming increasingly important, and operators are focusing on making pointed investments that provide clear ROI rather than adopting new technologies hastily.

The Value of Key Customer Data

In today's hyper-competitive restaurant industry, understanding your customers is more important than ever. The Restaurant Tech Outlook emphasizes the critical role of key customer data in driving business growth and improving customer loyalty. By collecting and analyzing data on customer preferences, purchasing behavior, and feedback, restaurants can gain valuable insights that can be used to personalize the customer experience, optimize marketing efforts, and improve menu offerings.

Some of the key types of customer data that restaurants should be collecting include:

• Demographic Data: Age, gender, location, income level, etc.
• Purchase History: What customers are ordering, how often they are ordering, and how much they are spending.
• Feedback: Reviews, comments, and suggestions provided through surveys, social media, or in-person interactions.
• Loyalty Program Data: Points earned, rewards redeemed, and engagement with the loyalty program.
• Online Ordering Data: Order frequency, order size, and delivery preferences.

This data can be used to create personalized marketing campaigns, recommend relevant menu items, and provide exceptional customer service. The goal is to create a more personalized and engaging experience that keeps customers coming back for more. As the podcast episode highlighted, business growth is dependent upon understanding the guest and aiding the experienced operator in efficiency.

Tech Vendor Relationships: Expectations and Changes

The Restaurant Tech Outlook reveals that restaurant operators are increasingly demanding more from their technology vendors. They are looking for partners who can provide not only cutting-edge technology but also exceptional support, training, and ongoing value. This reflects a growing recognition that technology is not a one-time investment but rather an ongoing relationship that requires close collaboration between the restaurant and the vendor.

Some of the key expectations that operators have for their tech vendors include:

• Reliable Technology: The technology must be reliable, user-friendly, and capable of delivering the promised benefits.
• Excellent Support: The vendor must provide prompt and effective support to address any issues or questions that may arise.
• Ongoing Training: The vendor must provide ongoing training to ensure that staff are able to effectively use the technology.
• Value-Added Services: The vendor should provide value-added services such as data analytics, consulting, and integration with other systems.
• Partnership Approach: The vendor should be a true partner, working closely with the restaurant to understand their needs and provide customized solutions.

Restaurants are also increasingly willing to switch vendors if they are not satisfied with the service they are receiving. This puts pressure on technology vendors to deliver exceptional value and build strong, long-lasting relationships with their clients. According to Christi's data from the podcast, there is a notable interest in replacing unsatisfactory tech components with better-performing ones, for example in Mergers and Acquisitions and food waste management.

The Great Debate: Too Much Tech in Restaurants?

As the restaurant industry becomes increasingly reliant on technology, a debate has emerged about whether restaurants can have "too much tech." On one hand, technology can help to improve efficiency, enhance the customer experience, and drive profitability. On the other hand, technology can also be impersonal, disruptive, and even detract from the overall dining experience.

Some of the potential downsides of over-relying on technology in restaurants include:

• Loss of Human Connection: Technology can replace human interaction, leading to a less personal and engaging dining experience.
• Technical Difficulties: Technology can be unreliable, leading to frustration for both staff and customers.
• Cost: Technology can be expensive to implement and maintain, potentially outweighing the benefits.
• Complexity: Technology can add complexity to operations, making it more difficult for staff to manage.
• Security Risks: Technology can create security vulnerabilities, exposing restaurants to data breaches and cyberattacks.

Ultimately, the key is to strike a balance between technology and human interaction. Restaurants should use technology to enhance the dining experience, not replace it. This means carefully considering the needs of their customers and staff and implementing technology in a way that is both effective and unobtrusive. Our podcast episode debated the restaurant industry’s growing reliance on technology, and whether too much tech might overshadow the heart and soul of the business. We concluded that technology and AI can play an essential role across operations – from boosting kitchen efficiency and reducing errors to enhancing customer engagement.

Conclusion: Navigating the Future of Restaurant Tech

The 2024 Restaurant Tech Outlook provides valuable insights into the evolving technological landscape of the restaurant industry. From the increased focus on ROI to the growing importance of customer data, the report highlights the key trends that are shaping the future of restaurants. By understanding these trends and making strategic investments in technology, restaurant operators can improve efficiency, enhance the customer experience, and drive profitability.

It's clear that technology will continue to play an increasingly important role in the restaurant industry. However, it's also important to remember that technology is just a tool. The key to success is to use technology in a way that enhances the human element of the restaurant experience, not replaces it. Be sure to check out our podcast episode, Dishin’ Out Data & Serving Up the 2024 Tech Trends for Restauranteurs, for even more insights on this important topic. Thanks for joining us on this deep dive, and we look forward to continuing the conversation!