Restaurant industry tentatively embraces emerging mobile technology
Merchants over the years have been hesitant to embrace emerging technology for numerous reasons. In general, they ask themselves the same question: How will new technology help my business sell more goods and services?
The restaurant industry in particular has been slow to adopt new developments in mobile technology, but that is changing. And that may be because the industry has arrived at a point where it is a necessity for several reasons.
A recent Gartner study found that smartphone sales worldwide reached 1.4 billion units in 2015, up 14.4 percent from 1.2 billion the previous year.
A Pew study from 2015 found that some 66 percent of Americans own a smartphone.
The restaurant industry would be wise to take note of these trends and adjust their digital strategies to reach consumers on their most personal device.
Many discussions about this particular topic took place at the recent National Restaurant Association Show in Chicago. I was at the show for the first time this year and it was clear to me that connected consumers are driving this industry.
We’ve come to a point in time when a merchant must have a clear digital strategy in place or risk losing revenue, which could very well lead to the demise of certain brands. That might seem to be a bit of an exaggeration, but think about where certain technology is today and where it’s going — not only with smartphones, but also with wearables and the Internet of Things.
The brands and companies that comprise the foodservice industry recognize that challenges lie ahead.
“It’s a challenge because we know customers love smartphones and if we get it right, we can get space on that smartphone,” Scott Bradley, founder and CEO of mobile marketing company VMob, said during a panel discussion at the NRA show.
But sometimes that connection happens for restaurants long before their app finds its way onto a consumer’s smartphone. There’s no better recent example of this than Chick-fil-A.
The popular quick service chain earlier this month released a mobile ordering app to address a problem it identified in a recent survey of millennials. This demographic doesn’t take kindly to waiting in line for anything, so Chick-fil-A worked to create an app that would solve this issue. More than 1 million people downloaded the app in the first week of its release.
Of course, it didn’t hurt that Chick-fil-A offered consumers a free chicken sandwich for downloading the app before the end of June. But the allure of its food had struck a chord with consumers long before the company decided to release a mobile app.
Chains such as Domino’s and Starbucks also have experienced great success with their respective mobile apps. But they, too, had a strong connection to their consumers even before they created and tweaked their digital strategies.
“We have to change the way we think about our customer engagement,” Bradley said. “It used to be easy. We just needed to get people in the store. Then, restaurants had to balance the omnichannel effort.
“Let’s not worry about the channels and put the customer at the center of everything.”
Once this happens, it’s time to focus on how restaurants can better engage those customers.
Jennifer Bell, an associate partner and director of marketing at Lettuce Entertain You Restaurants, discussed during one session her brand’s efforts to better engage their customers through a mobile app.
“You need to set goals and look ahead with technology,” she said. “We’re very proud of our Lettuce Eat app. It enables us to have a direct communication with our guests and it’s been a wonderful experience for them.”
Lettuce expanded the app’s usefulness by incorporating its loyalty program after a few tweaks. Bell said there were two problems with the program before the company added it to the app — often, customers would forget their loyalty card and sometimes were unaware that they were eating in a Lettuce restaurant because the company owns and operates several different brands.
“We’re creating a hub of all the things a diner might want [in the app] and creating better loyalty with that guest,” Bell said.
While restaurants continue to integrate new technology into their customer engagement efforts, at least one executive told NRA attendees that brands still need to be careful to determine what works best in different situations.
“The times when [new technology] works best is when we ask what we want to get out of the tech,” Lauren Hobbs, director of marketing for Union Square Hospitality Group, said during a panel discussion about technology in the hospitality industry. “But that’s difficult because there are a lot of companies out there and we have to think about what we want to get out of it. One of the things we set out to do is get better guest feedback.”
Hobbs made an interesting observation about the state of mobile payments with restaurants, and it’s one that’s likely shared by other B2C segments.
“Mobile payments isn’t there yet because the user base isn’t there,” she said. “The promise is there, but until you have enough of a user base, restaurants are not seeing those kinds of transactions every day and it becomes a worse experience. That’s a reason why restaurants have been slow to adopt mobile payments.”