Report:
Gen Z Embracing Restaurants' New Tech, Experiential Offerings
Restaurants
are picking up the pace regarding innovation for their offerings.
After an era
of low-contact transactions due to coronavirus fears, an increasing number of
consumers prefer the tech-based service restaurants are now offering. The
National Restaurant Association's latest state of the industry report found
that many restaurant owners are embracing changes to their services to
incorporate more digital interactions.
Younger
consumers clearly embrace such innovation.
Of Gen Z and
Millennials, approximately 70% say they prefer today's mobile pick-up orders
and food deliveries. Meanwhile, only 44% of Baby Boomers say they're more
likely to order delivery from a restaurant today than they were prior to 2020,
according to the National Restaurant Association.
Younger
Demos Welcome Array of Restaurant Offerings
It's not
just new technology young consumers are more open-minded about, results showed
that they're also more interested in purchasing things like chef's
table-experiences, restaurant meal-kits and retail products, and restaurant
merchandise.
Ultimately these
kinds of changes are here to stay with more restaurants embracing digital
systems for taking orders and handling transactions. While companies invest in
these newer systems, it's important to ensure the transition process happens
smoothly for the sake of the employees and the customers.
"Some
systems may require ‘training' of consumers, needing signage or perhaps an
employee to explain how these systems work, but ultimately, the experience will
remain largely the same," Maria Hossain, employment lawyer and
restaurant industry expert, told The Food Institute.
Ideal
Examples
Virginia-based
franchise Ynot Italian Restaurants has
introduced a digital ordering system with iPads placed at every table. Founder
and president Tony DiSilvestro says that the iPads
not only allow for real-time pricing adjustments to help with operational
costs, but also for flexible font sizes on the menu which can be helpful to
older customers.
The Ynot chain has also seen success adopting Apple Pay as an
option.
"This
technology has allowed us to market our brand and products in unique ways, such
as showcasing videos of our suppliers and the production process of our food
and wine," DiSilvestro said. Food
Institute Focus
How QSRs
Can Cope with Post-Pandemic Pressures
Restaurant
owners are scrambling to improve their bottom lines amid pandemic hangover,
inflation, and labor challenges, with half predicting 2023 will be less
profitable than prior years. This is especially true of the quick service
sector.
The National
Restaurant Association calculated in August restaurants were operating on a
roughly pre-tax profit margin of 5%, with food and labor costs accounting for a
third of expenses; utilities, maintenance, and other costs ate up 29% more.
Eighty-five percent of restaurant operators said their eaters were less
profitable than in 2019.
But those
numbers are likely to change significantly this year as inflation hammers
ingredient and utility prices, people look for more lucrative employment, and
consumers find they have fewer discretionary dollars to spend on restaurant
prepared meals.
"It's no
secret that the pandemic forced consumers to rethink how and when they ate out
at a quick-service restaurant," Michael Jaszczyk,
CEO of GK Americas, told The Food Institute. "[A] recent survey
from the National Restaurant Association [indicated] 50% of restaurant
operators believe their business will be less profitable in 2023 than in years
prior. This statistic is alarming, and it emphasizes the importance of
innovation within QSRs to bolster steady relationships with consumers."
The NRA
survey found 93% of QSR operations called food costs a significant challenge.
Almost 90% said they already have increased menu prices and 59% said they had
changed their offerings. When it comes to labor costs, 87% said it's a problem,
and 48% noted it had forced them to reduce their hours of operation. Almost 40%
said they had shelved expansion plans.
"A majority
of both full-service operators (63%) and limited-service operators (61%) say
their restaurant does not have enough employees to meet customer demand," NRA
said.
QSRs are
increasingly turning to innovations like dynamic pricing and greater use of
technology.
"QSRs can
rely on customer data to determine pain points in the customer experience and
find new ways to improve ordering, fulfillment and checkout," Jaszczyk said. "This can enhance the value the consumer
sees in visiting the restaurant, which can improve long-term relationships,
regardless of economic conditions."
He said
dynamic pricing can be used in restaurants in the same way it is used in
grocery stores.
"This
[artificial intelligence]-based strategy can be used to offset inflation and
rising costs of key ingredients like eggs, which are now 70% more expensive
than this time last year. With dynamic pricing, foods with shorter shelf lives
nearing their expiry date can automatically become cheaper, strengthening
profits, and helping consumers get more for their money," he said. Food
Institute Focus
Summer
Preview '23: Inflation Alters Vacation Plans
Inflation is
lingering like an in-law overstaying their welcome. As a result, consumers are
demanding deals as they make vacation plans for summer 2023.
Judging by
recent research, consumers plan to hit the road in droves this summer and
cookouts could be less frequent and elaborate as in the past. Consider the
following recent findings:
A Bankrate
survey revealed that, among the 37% of American adults unlikely to take a
vacation this year, most of that group – 58% — indicated they simply can't
afford to. That's 10 percentage points more than in 2022 (Gen Xers were the
most likely demographic to say they couldn't afford a summer vacation this
year, at 69%).
That same
survey showed that 26% of respondents who are taking at least one vacation this
year are planning to drive rather than fly to cut costs.
"There's a
cumulative toll to both inflation and the higher interest rates that are meant
to combat it," Bankrate analyst Ted Rossman said in a statement, adding:
"Prices were
rising much faster last year at this time, but fewer travelers were adjusting their
plans."
Vibenomics recently
gauged sentiment among more than 1,000 shoppers as Memorial Day – the
unofficial start to summer – nears. The findings revealed 74% of shoppers plan
to search for sales in the days ahead.
As inflation
persists this summer, businesses can nevertheless win customers by taking a few
careful steps.
Promotions
Heat Up
SpotOn's
advisory council said a few rather simple measures can help businesses like
restaurants capitalize on summer crowds. Their tips are applicable to various
industry segments, too.
The council
reminded business operators to appeal to day-time crowds with seasonal and
social media friendly offerings (like colorful menu items, for example). The
experienced business leaders also noted that it's imperative to add new
offerings with the changing season, such as the latest in healthier-for-you
beverages.
JB Balingit, owner of The Hideout Kitchen, said businesses must
carefully consider their pricing strategy in the current climate.
"Don't be
too greedy with your pricing strategy – we can't price ourselves out of repeat
business," Balingit warned.
Road
Trips on the Rise
With the
uptick in road trips on the horizon this summer – as indicated by Bankrate –
businesses like convenience stores must take a few specific measures to meet
customer needs.
Michael Jaszczyk, CEO of GK Americas, said C-stores can improve the
customer experience through innovative technologies by enabling mobile
payments, investing in loyalty programs, and combining fuel and in-store
offerings.
"Families
making a pit stop for fuel will also be looking for refreshments and foods that
don't require any extra preparation," Jaszczyk noted.
"Retailers must have a unified POS." Food
Institute Focus
