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12/05/2021 Article

Introduction

The COVID-19 pandemic has drastically sped up the digitalisation of the food and beverage industry. When restaurants stopped being able to serve their guests under their own roof, innovations in delivery and take out took the market by storm. Since these channels were and are still heavily reliant on digital technologies in order to work efficiently, a slew of technological innovation, evolution and revolution came with it. New digitally integrated strategies are popping up throughout the industry, changing the expectations of both guests and stakeholders. This makes it all the more important for anyone operating within the market to at least familiarise themselves with this new digital world. Not to worry though: within this article we will take you through the 3 main aspects of the digitally integrated restaurant, leading towards building up your very own digital infrastructure. 

 

Building up a digital infrastructure in and around your brand is paramount to keeping up with the rapid innovation that is currently happening in and around the F&B industry. The key here is to integrate technology into your brand and company in such a way that it is easily managed, talks to each-other and allows you to make decisions based on measurable facts instead of on gut feelings. We understand that this may be more easily said than done, so we have constructed a model to guide the process of setting up your own digital infrastructure. In this model we focus on 3 main aspects, quickly summarised below and worked out in detail later in this article:

 

“The key here is to integrate technology into your brand and company in such a way that it is easily managed, talks to each-other and allows you to make decisions based on measurable facts instead of on gut feelings.”

 

 

  • Digital Ecosystem & Data: As technologies become both more in number and in complexity it becomes more important to connect them to each other, forming a Digital Ecosystem. These all-round (holistic) digital solutions can both generate and utilise data to make things happen automatically in the restaurant, saving valuable time for your staff as well as reducing human error.

 

  • Fact Based Insights & Data Driven Customer Centricity: To make the most of the data generated by your newly founded ecosystem, you should implement processes that actually use the generated data in combination with both qualitative and quantitive external sources. This will allow you to get the complete picture on who your guests are, what they want and how they want it, as well as where and why your brand can thrive.

 

  • Hybridisation: Digital solutions not only allow you to gain more control over a single location or product, it opens up the possibility to retain control over many at once. The industry is moving from monolithic concepts, where product, concept and brand are bound to physical locations, to hybrid concepts, where brand, concept, products are tailored for use in multiple channels. Use your newly built Digital Ecosystem and Fact Based Insights to truly deliver whatever the guest wants, whenever they want it. 

 

1 – Building the digital ecosystem, its ability to automate and plan data-driven operations

 

Many restaurants utilise digital tools like point-of-sale and table reservation system, as well as increasingly more delivery aggregator tablets. Yet, due to the lack of overarching digital tools and the use of paper filing for business processes, restaurants are still spending time on time-consuming and redundant processes. New technologies have enabled the integration of all those processes into a single Digital Ecosystem. 

 
What is the value of a Digital Ecosystem?

A Digital Ecosystem syncs your systems with one another and allows business and staff to shift attention towards the value-adding tasks. A fully integrated ecosystem includes employing front and back of house systems and links it all into a management- and control dashboard. This means you no longer have to manually input data from one system into the other, which is not only a major timesaver but also allows for much more complex and complete data to be generated. 

 

“A Digital Ecosystem syncs your systems with one another and allows business and staff to shift attention towards the value-adding tasks, but also allows for much more complex and complete data to be generated.”

 

Digital Ecosystem in the Back of the House

Starting from the heart of your restaurant, most systems in the back of the house can now be digitalised and automated. Utilising these systems is crucial for better forecasting, increasing efficiency in operation and alignment throughout the business and the team. Some examples of these back of house systems are:

  • Inventory management system
  • Kitchen display system
  • Staff planning system
  • Connecting equipment (internet of things)
  • Loyalty management system. 

Syncing them together and automating tasks will increase operational intelligence and can solve issues like repetitive processes, communication and team misalignment.

 
Digital Ecosystem in the Front of the House:

Implementing digital front of house tools enables a new digital way of providing a seamless and personalised journey to guests. Providing flexibility and accessibility, guests can focus their attention on value-adding experiences rather than needless actions such as waiting. In addition, systems also drive operational productivity by solving bottleneck situations like having only one sales input. On the backside of this, operators assemble valuable information on their guests which also allows for more personalisation in communication and offerings. Some examples of automated front of house systems are:

  • Online ordering via website
  • Mobile application
  • Self-service kiosks
  • QR-code enabled ordering system
  • Table reservation system
  • Digital payment system that inputs into the main POS system
 
Real life examples:

For some major brands the Digital Ecosystem becomes more and more business as usual. For example Kentucky Fried Chicken (KFC) Canada is planning to use data to gather insights on its operations, guest satisfaction/feedback, and marketing. Creating a dashboard with consolidated insights, KFC is aiming to make strategic and operational decisions data-driven. Therefore, they are rolling out a well built digital ecosystem for management dashboards and future data-driven decision making.

 
How to set a Digital Ecosystem up as an operator:

Restaurateurs should start by looking into different tech solutions that provide a suitable ecosystem for their restaurants. In order to build a well-functioning ecosystem, the technologies, generated data and connections within the system should be carefully planned. With these digital schematics, the business can properly make use of digital tools and generated data to improve operational processes and decisions. The Digital Ecosystem can include many different technologies, including: inventory, heatmapping, planning tools, bluetooth beacons, RFID tags, geofencing, temperature sensors, weather data, payment solutions, POS to the kitchen display system, automated loyalty management, staff wearables and consolidation of delivery platforms

For all that to be able to work together, it is critical to work from a clear architecture and a step by step implementation plan.

 

Generating Data through your Digital Ecosystem:

With the data sources from the digital infrastructure, businesses can start leveraging the in-store data that is being generated daily. In-store data can be coming from point-of-sales, inventory, staff planning, table reservations or even kitchen display systems. In order to make proper use of this data, a  management & control dashboard should be set up, with in-store data sets visualised for better forecasting and decision making. 

 

For example, as a Saturday approaches, the restaurateur can look into the previous sales data to understand the most sold items, check the expected number of guests to make a fact-based forecast for the number of dishes expected to sell. The real-time inventory status will give an up-to-date overview for the manager, suggesting only necessary stock orders based on sales. Finally, with the planned capacity of guests, staff planning can be made accordingly or even automatically. Through predictive analytics, fact based decisions can be made to achieve a data driven operation.

 

2 – Fact-based insights and taking on the data-driven customer centric approach

Currently in the F&B industry, it is assumed that we know who our guests are, what their reason is to use our restaurant and products, what their patterns and routines are and what their position is towards the concept and brand. We make decisions based on that feeling, not only about guest related topics, but also in finding the right habitat for new physical locations. We believe the industry places too much trust on instinct and high level data, even though there is a lot of (anonymous) data available which can assist in validating these assumptions. While we don’t want to underplay the restaurateurs sixth sense or gut-feel, we advocate strongly to complement this with internally available and externally obtainable data. Not because we think it works, but because we see it works.

 

The effect of Data-driven Customer Centricity:

Many success stories during COVID-19 were from companies that were using data to perform predictive analysis. Fact-based insights helped them to make better decisions. These decisions, in turn, boost businesses’ profits by 10% on average. Chainstore analytics company Dgenious, however, still reports that only 12% of companies take advantage of fact-based insights and make decisions upon it, which only highlights the potential profit still to be gained within the industry.

 

“Fact-based insights helped them to make better decisions. These decisions, in turn, boost businesses’ profits by 10% on average. Chainstore analytics company Dgenious, however, still reports that only 12% of companies take advantage of fact-based insights and make decisions upon it, which only highlights the potential profit still to be gained within the industry.”

 

One example of a company who does use their data effectively is Deliveroo. With the help of data analytics, Deliveroo established various dark kitchens around Europe. It analysed the data from its consumers and identified the gaps in the market. With this, Deliveroo took a data-driven decision to establish a dark kitchen at optimal locations and with the most demanded menu items, demonstrating the power of basing business decisions on fact-based insights.  

 

Gathering the Data you need:

So, aside from our own ecosystem, where is all this data coming from? Currently we all walk around with our personalised beacon, allowing app developers and social networks to use our anonymous data. Different service providers are available to help you to mine this valuable data asset, providing almost real-time data on your guests, footfall, traffic drivers and catchment areas. This data is used in Retail & FMCG and slowly is starting to find its way into the food service industry. Not only for the major branded concept operators, but also for the one-offs, start-ups and scale-ups. This anonymous and quantitative data can be used as a starter, providing a strong foundation of insights. In turn, these insights can then be complemented by targeted qualitative research using panels and online queries more in the traditional sense. All these data points eventually lead to a true understanding of both the guest and the brand itself, which allows you to make much more optimised decisions regarding either.

 

Data-Driven Customer Centricity summarised:

In short, businesses should combine externally sourced qualitative and quantitative data with the data they generate themselves through their Digital Ecosystem. Once combined, the data can be analysed in order to understand their guests and their brand. This, in turn, allows the company to make data-driven decisions that optimise their overall brand to fit better towards their target audience, increasing profits in the long run.  

 

3 – Multi-channeling the delivery of restaurant’s products and services

With COVID-19’s unprecedented implications on the food and beverage industry, guest preferences and expectations have changed. According to a survey conducted by Deloitte, 50% of respondents responded that their dine-out frequency would not return to pre-COVID-19 level. Dine-in is no longer a must-have but is becoming a nice to have for consumers. Additionally, 62% of respondents answered that convenience is the main factor when searching for restaurants. With consumers demanding convenience, restaurants need to rethink their offer to accommodate different ways of guest interactions. Providing the consumer the option to buy your product in a multitude of channels (or multi-channeling) is thus becoming a key aspect of the modern restaurant. In order to of this successfully, a well-integrated Digital Ecosystem is required. 

 

“Dine-in is no longer a must-have but is becoming a nice to have for consumers.”
 
Large brands are stepping in:

Big restaurant chains have been among the first acting on this new consumer demand. Take Burger King, for instance: with the reveal of their new store design, the chain has shifted its focus to alternative service-types such as curb-side pick-up, mobile only pick-up, and food wall pick-up. The introduction of off-premises service options provides consumers with choices on how to receive their product, playing further into the demand for convenience. Furthermore, multi-channelling is increasing stores’ capacity as the product is available through more options. For renowned restaurant holders this translated in ready-to-heat meal delivery and even DIY meal-kits through online channels and retail.

 
Why you should consider multi-channeling:

With the shifting demand of consumers and increasing implementations by competitors, restaurants must too look into multi-channelling their products and services. Through digitalisation, new channels have opened both for communication and fulfilment. Connecting with the guest in the virtual market space has become a must. This requires the use of new technology, further use of personalised (anonymous) data and different ways of productising, communication and branding/storytelling. 

 
How to start multi-channeling:
  • An important first step is to start redeveloping your business into a hybrid business model. Switching to a well balanced approach between on- and off premises service and retail vs foodservice delivery requires insights in guest preferences and behaviour. With previously mentioned fact-based insights, restaurateurs can investigate what alternatives attract guests to restaurants and make less risky business decisions. 
  • The second step is creating a digital or virtual brand. The experience driven by a physical location, where brand values are expressed through service, design, atmosphere needs to be translated into a clear digital strategy were you can stand out between multiple competitors. 
  • Third, to enable multi-channelling through digital means, restaurants need to reach their consumers through digital communication and digital branding. In addition, by consumers ordering products and services digitally, restaurants can gather consumer data to contribute to their predictive analytics that enriches their consumer knowledge.

 

In conclusion

Digital ecosystem and data driven operations planning, fact-based insights and data-driven customer centricity and multi-channeling may sound like rocket science at first, but these elements are the way towards sustainable competition in the industry in a much larger (virtual) market space. Digitalisation will allow businesses to leverage the power of digital tools, letting restaurateurs do what they do best, cook great food and make guests smile.

 

After exploring the potential of digital tools, restaurateurs can pursue concept/brand/product optimisation and growth potential. By using insights gained from all the elements of digital infrastructure, entrepreneurs can discover clearly and safely where and for whom they can add value, again a win-win situation. 

 

As a result, these steps will lead to better guest and business alignment, continuous management control, increased transparency and accountability, better compliance, optimised performance, and lastly, fact-based growth potential and business decisions, and unlock multiple new sales channels to grow. This allows you and your brand to not only maintain pre-Covid levels of sale, but to truly excel and grow your business quickly, sustainably and profitably.

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