Lessons in Elevated Service, Convenience and Curation from the Restaurant Industry

The COVID-19 pandemic upended the business and service realities of the restaurant industry in a historically unprecedented way. Regulations limiting the dine-in experience forced a rapid adoption of contactless, mobile-first, and automated digital omnichannel experiences as the consumer dining journey underwent a decade’s worth of recalibration in just a single calendar year, blurring the lines between traditional business models and the onset of new ones. 

Digitally driven sales and delivery enabled the survival of restaurants during the pandemic, and these new capabilities, powered by cutting edge technology like AI, robotics, and best-in-class customer intelligence platforms, as well as innovative fulfilment and last-mile delivery solutions, have reshaped the industry landscape and created new opportunities for restaurants to win loyalty and differentiate. Automated and contactless solutions offer consumers convenience and safety without human contact; while the ability to leverage data from vast troves of digital order histories has allowed restaurants to reshape and enhance the consumer experience by providing more customizable and tailored options. 

The transition to a digital-first economy is providing restaurants with new opportunities to activate the consumer’s path to purchase. Fueled by the prevalence of at-home dining, an entirely new ecosystem of virtual restaurant brands with no brick-and-mortar footprint has arisen, powered by ghost kitchens and third-party delivery apps and promoted through a growing influencer marketplace. The digital-first practices of today’s consumer have also given rise to greater flexibility, transparency, and speed regarding restaurant’s end-to-end  fulfillment practices, delivering on both safety as well as convenience through a combination of contactless, digitally-led mobile ordering and payment solutions, as well as geo-fenced pickup practices, innovative new store designs, and autonomous final handoff. 

To differentiate while balancing the rapid adoption of technological innovations, restaurants are also prioritizing consumer interest in climate-friendly practices, plant-based options and locally sourced goods. As restaurants learn more about their consumers, consumers are also learning more about restaurants’ own business practices and policies, examining closely how they contribute to larger societal issues like climate change, and making dining decisions based on a wider variety of factors than just personal preference and short-term wants. 

Consumer Insights Driving Innovation in the Restaurant Industry

Automation and contactless solutions are driving innovation across the restaurant and food services industry. 

It’s estimated that digital ordering will overtake in-person ordering at quick service restaurants (QSRs) by 2025, with 54 percent of sales going digital.
Limited Service Restaurant Digital Maturity Benchmark. Incisiv, 2020

Customer data is leading to enhanced CX, as digital ordering becomes commonplace across the restaurant industry. 

One-third of restaurants’ digital customers ordered online for the first time during the pandemic, representing ​​some $100 billion in sales.
The $100 Billion Digital Lifeline for Restaurants. Boston Consulting Group, 2020

The growing at-home economy is furthering the need for flexible and convenient fulfillment.  

68 percent of consumers say they’re more likely to purchase takeout from a restaurant than before the pandemic, and more than half of adults say that takeout or delivery meals are now “essential to the way they live.”
State of the Industry Report. The National Restaurant Association, 2021

To differentiate within a competitive industry, restaurants are prioritizing consumer interest in climate-friendly practices, plant-based options and locally sourced goods. 

54% of Americans have tried the fake meat menu at fast-food chains; with 70% giving it a thumbs up. 60% say they would continue to eat fake meat at fast food chains, primarily for health reasons.
Fake Meat As Fast Food: How impressed are Americans? Piplsay, 2021

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Deep Dive with PSFK’s latest report… Restaurant CX Innovation

It is a pivotal time in the restaurant industry, and the way establishments deliver value to their customers has never been more important or diverse. To help our members better understand the near-constant disruptions at play in this must-watch space, PSFK has built a report and identified 9 key trends highlighting the elevated services, platforms, and solutions that are changing the restaurant industry landscape and reshaping the customer journey.

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Restaurant and Food Service Trends With Broadly Applicable Learnings

Automated Customization 

Advanced robotics are changing the game for grab-and-go dining and vending solutions, which typically rely on pre-packaged items that aren’t always healthy or fresh. These automated solutions offer the speed and convenience of made ahead with the customization and quality of made-to-order in a small footprint that requires little to no human intervention.

In an effort to offer contactless food options, Walmart has rolled out Blendid kiosks in multiple locations. The automated smoothie-making kiosk utilizes machine learning, robotics and artificial intelligence to store, measure and finally create nutrient-dense customized drinks. Customers are able to order ahead of time within the Blendid app, or at the in-store kiosk.  

Tailored Recommendations 

To provide customers with curated experiences, restaurants and QSRs are offering AI-enabled decision support that asks customers questions about their preferences and requirements and/or leverages shopper data to help narrow down choices and suggest the best options. Guided selection systems support customers in selecting items based on their own tastes, past orders, and even current weather conditions. 

Technology company Intel and fast-food chain Burger King are collaborating on an end-to-end deep learning recommendation platform for Burger King’s customers. The new ordering system uses touchscreen menu boards powered by Intel’s artificial intelligence platform, which recommend items to customers as they’re about to order. It can predict whether a customer will order a hot or cold drink or light or large meal, potentially saving time and leading to a better customer experience. The solution has already been piloted in over 1,000 Burger King locations.  

Business Model Innovation

While the core of any restaurant’s revenue is its daily food and beverage sales, the pandemic demonstrated how quickly this business can go away. In an effort to create additional income streams, while deepening their relationship with their top customers, many restaurants are implementing subscription and membership-based models that include insider access alongside lifestyle-related offerings like meal kits and merchandise.

Table22 is a digital platform to help restaurants launch compelling subscription offerings, creating a more predictable recurring revenue and continuing to grow brand loyalty with customers. The software company handles technical logistics while member restaurants design their own tiered membership programs for loyal local fans. Given that subscribers are purchasing products ahead of fulfillment, restaurants can reduce waste and get better deals from suppliers and in exchange, Table22 takes a 10 percent commission on sales. New York City restaurants il Buco, speakeasy PDT, ALTA and The Four Horsemen have created their own unique offerings using Table22 ranging from subscription boxes with high-end pantry items, gourmet pre-cooked meals, cocktail kits, and meal kits. 

Social Commerce 

As content dominates the online sphere, brands and platforms are taking notice, turning simple discovery occasions into shoppable ones. Restaurants and DTC food and beverage brands can leverage established and burgeoning social platforms alike to facilitate casual interactions with their content as well as streamline consumers’ path from inspiration to purchase. 

Pizza Hut partnered with streaming service Twitch to host a live gaming series where gamers, celebrities and musicians play video games, compete in pizza-themed challenges, and unbox their pizza orders. The partnership shows how brands can use the streaming platform to engage with consumers in target demographics.

Contactless Convenience 

Driven by necessity, contactless solutions have positioned mobile-connected and touchless experiences as an expectation across retail, hospitality and dining. Combining ordering, payment and fulfillment within a contactless setting, digitally-led restaurants and QSR locations are delivering on both safety as well as convenience. 

Fast-food restaurant chain, Taco Bell, opens a digital-only location in Times Square. In order to get one of their tacos or Crunchwrap Supremes, customers must order in advance online or on the app, or use one of the self-service kiosks. In addition to the edible menu items, customers can purchase souvenirs. The store layout features a separate entrance for mobile orders, where customers use touchscreen kiosks to retrieve their orders by typing in their order number and proceeding to a corresponding cubby once it lights up and unlocks.

Multi-Use Locations 

Digital-first consumers that have embraced the ease of a mobile-first and contactless retail setting now expect an omnichannel experience across every touchpoint. To support all customer journeys, from discovery to fulfillment, no matter the channel, restaurants are adopting flexible formats that serve mobile, online, drive-thru and in-store customers equally. 

Multinational restaurant chain Burger King has created a prototype redesign focused on the mobile customer and speed of delivery, with triple-lane drive-thrus. The kitchen and dining room will hang above the drive-thru lanes, cutting down on the restaurant’s overall physical footprint. For drive-thru guests, orders are delivered via a conveyor belt system. The particular concept design also includes a dedicated drive-thru lane for delivery drivers and is, according to company’s press release, “a 100% touchless experience.” 

Ghost Franchise 

Ghost kitchens have become a staple in the restaurant industry, reducing friction and wait times for customers in search of at-home delivery. As restrictions continue to limit social outings and visits to local favorites, ghost locations and partner restaurants or franchises are supporting entirely virtual restaurants to connect with customers and fulfill their online orders. 

Fast food chain Wendy’s will open 700 delivery-only, virtual ghost kitchens through a partnership with start-up REEF Technology. The ghost kitchens will be dedicated to fulfilling delivery orders placed through third-party apps. REEF Technology helps restaurants with virtual kitchen logistics, which can help fast-food restaurants cut real estate and labor costs and address the demand for off-premise dining. 

In-Step Fulfillment 

The digital-first practices of today’s consumer have given rise to greater flexibility, transparency and speed regarding fulfillment practices, from at home delivery to curbside pickup. To deliver against consumer expectations, and provide end-to-end convenience, online delivery platforms are expanding beyond just food-related orders, autonomous robots are completing final handoff, and geofencing tools are being incorporated into delivery platforms to provide ease of mind for both consumers and associates. 

Food delivery service DoorDash’s new service DoubleDash will now allow its customers to shop from multiple stores all in one order, without an additional delivery fee. Through partnerships with local restaurants and convenience stores, DoubleDash allows customers to select their favorite drinks, snacks, groceries and other items to be included in their order. All items will be delivered by the same “dasher,” and there is no minimum order size.  

Carbon Calorie Menus

As climate change continues to become a central concern, consumers are examining how businesses and their policies are contributing positively or negatively. To help educate consumers on both the impact of their own choices as well as a company’s, businesses are providing easy access to climate footprint tools and environmental information as it relates to specific orders, items and food groups. 

In an effort to inform and educate its consumers, fast-casual eatery Chipotle released an environmental calculator that can generate what they’ve deemed the “foodprint” of a customer’s order. Upon visiting the brand’s site, consumers can build their exact order, and see the carbon, water saved, improved soil health, organic land supported, and antibiotics avoided through their order, in comparison to industry standards. 

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Deep Dive with PSFK’s latest report… Restaurant CX Innovation

It is a pivotal time in the restaurant industry, and the way establishments deliver value to their customers has never been more important or diverse. To help our members better understand the near-constant disruptions at play in this must-watch space, PSFK has built a report and identified 9 key trends highlighting the elevated services, platforms, and solutions that are changing the restaurant industry landscape and reshaping the customer journey.