2018 Predictions from Restaurant Industry Insiders

Modern Restaurant Management (MRM) magazine polled restaurant and hospitality industry insiders on their predictions for 2018. Their responses include the Instagram influence, experiential dining, increased data mining and integration in restaurant tech.

 Chris Adams, Principal of Ellis Adams Group

Hotels are once again becoming relevant in the food and beverage space. In 2018, the restaurants and bars within the hotel will be as much a destination as the hotels themselves.

Beverage programs are being designed with Instagram in mind – having a photo worthy cocktail is huge for restaurants and bars to reach that customer base that is driven on new experiences and then documenting it on social media. Finding the balance between creating that experience and offering true hospitality is key.

I also feel that guests in the United States are starting to embrace the European-style of drinking, with Aperitifs and Digestifs becoming increasingly common. I see more Amaro in the market than ever before and I think it will continue to gain popularity in the new year.

Gilbert Bailey, Vice President, Analytics, Customer Engagement & Stored Value, Heartland Commerce 

As we approach 2018, more and more restaurants will implement new, cloud-based restaurant management platforms that have a multitude of integrations capabilities. As a result there will be more data available that can be mined and then turned into actionable insights.

We anticipate that more restaurants will incorporate data analytics into their business models to better run their restaurants and provide a better experience for their guests. We’re seeing an evolution of customer loyalty into customer engagement where we can predict and provide value to customers even before they realize they have a need.

Viren Balar, Co-Founder and CTO, Ziosk

In 2018, we will see greater acceptance and inception points when it comes to loyalty and digital payments. When a guest returns to a restaurant they’ve dined at before, they are recognized, the menu they view reflects their preferences, and their points are automatically applied to their bill.

On the whole, loyalty programs will evolve to become more personalized and catch the customer at the right moment and at the right place to deliver a tailored experience. We’ll also see greater migration toward payment-on-demand and new payment forms with digital wallets. Instead of a ‘nice to have’ we’re now seeing restaurants pushing digital payment and loyalty as a priority and as part of their overall business models.

 Victoria Brady, VP of Caterer Partnerships, ezCater

The focus on off-premise will continue in 2018. One way restaurants are keeping up with demand is through commissary kitchens. We’re seeing more and more brands open these locations to help pump out delivery orders large and small. Breakfast will also continue to be a growing segment for delivery – meetings happen all day and businesses continue to feed their employees. 

Lindsay Bloom, Senior Manager at SessionM

It’s all about data-driven surprise-and-delight in 2018.

Loyalty and engagement continue to be top priorities for restaurants in the year ahead. But as martech stack integration improves in 2018, we’re going to see more advanced programs, powered by data-driven insights.

Restaurants will increasingly reward customers for non-transactional behaviors such as watching a video, visiting a store or following them on Twitter. And those rewards won’t just be loyalty “points” – they’ll also include experiences like exclusive access to company plans and new products, or complimentary perks.

It’s all about data-driven surprise-and-delight in 2018, which will fuel customer happiness and word-of-mouth marketing.

 David Cantu, Co-Founder, and Chief Customer Officer, HotSchedules

There is a trend of increased labor legislation on the local level (state and municipality) that restaurants and their employees must navigate together. We’ve already seen, for example, new predictive scheduling regulations enacted in cities like Seattle, San Francisco, and New York City.

We expect the trend to continue and additional municipalities to adopt similar rules in 2018. Which is why it’s imperative to provide hourly employees with tools to better manage their schedules, while also ensuring managers can continue to run their restaurant efficiently, effectively and in compliance with applicable labor regulations.

Intelligent back office platforms like Clarifi by HotSchedules enable restaurants to remain compliant with these new labor laws, helping to reduce potential compliance violations and empowering managers to schedule with confidence by setting and utilizing alerts which proactively identify potential compliance risks.  

Donna Cobb, Senior Director, Enterprise Marketing, Comcast Business

According to Pew Research Center, 84 percent of American households have at least one smartphone and they want to be able to use them anytime, anywhere. It’s imperative to understand that technology is changing the way consumers interact with businesses and the way businesses manage their end user’s experiences.

To continue to be relevant, restaurants must put a greater emphasis on technology to address their patrons’ appetite for connectivity and provide services to foster positive experiences. A major element of that technology is the network that supports it, which must be robust enough to handle the traffic demands from Wi-Fi, to applications such as:

• Text-based notifications to alert patrons when their table is ready
• Tablet ordering at tables to expedite service
• Offering QR codes to menus that include nutritional facts and other information
• Back-end support and data analytics to track patrons’ eating and drinking tastes

To implement these innovative experiences, restaurants will seek a secure, high-performance network that can be support bandwidth needs, up to one Gigabit speeds. Establishments that make their network, and end-user technology services, a priority will have a leg up on competitors and drive brand loyalty to ensure long-term success.

Jeremy Fall, Restaurateur and Founder of J. Fall Group

I really think we’re going to see a lot more experiential dining in the future. It’s something that the industry has had a taste of and different attempts have been made here and there, but it hasn’t been implemented on a larger scale.

People aren’t just looking at menus when they choose what restaurant to go to anymore, they want an experience and a story to tell. In the past, this kind of experience was usually reserved for fine dining, but now I think it’s going to trickle down to the fast-casual market.

I think 2018 is going to see higher quality fast casual restaurants opening that are building brands focused on experiential dining.

Reserve CEO Greg Hong

Integrations in the restaurant tech space are going to be the next big thing. There’s a lot of different pieces of technology in a restaurant right now and soon they will all start to talk to each other and create a seamless journey for restaurants and diners. Reserve’s building those integrations to help restaurants better understand its customers’ journey and to make sure that those diners have a great experience.

 Amit Jain, Founder and CEO, Bridg

Consumers now expect to be reached on their terms with personalized messages that resonate. 

In 2018, we expect more restaurant operators will adopt what e-commerce already does so well: use data not only to follow customer journeys in order to understand individualized behavior and buying patterns, but also predict who they are online and how to reach them. This allows operators to reach all customers and not just those who sign up for loyalty and similar lead generation programs. Operators can then engage those individuals with marketing messages that speak directly to their interests driving traffic and sales with increased cost effectiveness. That’s been our mission at Bridg; to give restaurant and retail chains the same level of customer insight (and revenue growth) as data-savvy online retailers like Amazon.

With the advent of social media networks, consumers – particularly highly sought-after Millennials – have come to expect personalized relationships and experiences with the brands they give their business to. Consumers now expect to be reached on their terms with personalized messages that resonate. Marketing that aligns with customers’ individual preferences, needs and behaviors are proven to create feelings of connection and relatability that result in increased visit frequency and sales. At Bridg, we use this strategy and technology to enable our restaurant partners to identify customers and their preferences, and reach them with tailored incentives and messages based on their predilections.

Ricki Kline, Founder and Principal Designer of Ricki Kline Design + Build

Design, for good or bad, will be all about Instagram. In 2018, more and more restrooms will be designed with Instagram in mind. You must put effort into the bathroom because patrons will want an Instagrammable spot for selfies, so lighting, colors, fun details, etc. will be incredibly important.

Danielle Lackey, General Counsel at Motus

The proliferation of mobile technologies is helping businesses be more connected. This connectivity, however, will likely make it increasingly difficult for restaurants to compete as solo or siloed entities.

We’ve already seen restaurants forming unconventional strategies and unlikely relationships (e.g., Domino’s teaming up with Ford to explore driverless pizza delivery, and restaurants like TGI Fridays partnering with Lash to experiment with delivering alcohol to your doorstep along with food), and this will continue to accelerate in 2018.

 Eddie Navarrette, Chief Consultant of FE Design & Consulting

I believe 2018 will further sustainable concepts such as local groceries, bakeries, coffee roasters, and small breweries. I don’t feel like these concepts have yet met their full potential. As federal government environmental protection policies get more derailed with its current administration, it will influence more sustainable local business. Additionally, mixed use support, or rather pedestrian-friendly smaller restaurant concepts, will start to gain recognition on what they bring to the (no pun intended) table.

The increase of minimum wage will also influence smaller ‘tight teamed’ restaurant concepts having less staff, while larger corporate restaurant concepts (and smaller millennial restauranteurs) may continue to look toward technology, such as robots making burgers and self-ordering systems to make their numbers. 

Eli Portnoy, founder and CEO of Sense360

Restaurant operators will continue to learn from and emulate the best practices of digital leaders like Amazon when it comes to using data to power their decision making. The field is too competitive and too saturated to build strategies on assumptions and gut.

In this environment just staying flat is a challenge, but growth is near impossible without true insight into how to steal share. I expect restaurant operators will also seek data sources that give them the ability and flexibility to execute precise growth strategies and determine, in real time, which tactics are effective and which should be eliminated. 

Jason Smylie, President of Capriotti’s

Kiosks. We saw it in the airline industry. Kiosks creeped into airports and it took a few years for agents to train customers this was a more convenient way to check-in. Today, kiosks outnumber live agents in airports. Brands like Panera, McDonald’s, and Wendy’s have done the dirty work for the restaurant industry over the last couple years. Their giant investments in hardware and FOH staff to train customers has been slowly reaching a tipping point. Today, POS companies are beginning to provide affordable and easy to implement kiosk options. 2018 may be the year that the touchscreen begins to replace the cashier.

Third-Party Order Injection. Like it or not, Third Party Ordering and Delivery Aggregators are here to stay. It is not uncommon for a restaurant to have multiple Third parties feeding them takeout and delivery orders. Technology solution providers have taken notice of the operational challenges. While restaurant managers struggle to keep on top of orders beeping from multiple tablets and accounting departments try to reconcile, POS and online ordering providers are coming to the rescue. In 2018, API’s that allow 3rd parties to inject orders directly into the POS environments will save the day, and our sanity. 

Doug Sutton, President of Steritech

A delivery model must provide the same food experience a customer expects to receive at a brick and mortar location. 

Consumer behavior has undergone multiple shifts in recent years, with consumers staying in more, ordering meal kits, embracing the healthier foods movement, and turning to the internet for at home grocery shopping to save dollars. At the same time, restaurant competition has increased – from both the restaurant industry and others, as grocery stores and convenience stores evolve to serve today’s on-the-go customer. According to Nation’s Restaurant News, between 2009 and 2016, the number of locations reported by the Top 100 restaurant chains in the U.S. increased by 13 percent. These trends are hitting the restaurant industry in the wallet, with several straight years of declining same store sales and guest traffic. These persistent trends have left executives scrambling for ways to boost the bottom line. 

Many chains are looking to delivery as a way to “save the day,” appealing to the consumer trend of convenience and getting the food that they want, whenever and wherever they want it. Delivery is showing signs of hope, and Steritech predicts that 2018 will see chains continuing to merge into this space, in both traditional delivery models and high-volume restaurants starting up virtual restaurants to cater to delivery-only orders. However, delivery doesn’t come without risks to a brand. Brick and mortar locations give restaurants control over food – quality, temperature, presentation, and more. To be successful, a delivery model must provide the same food experience a customer expects to receive at a brick and mortar location. 

We are a company specializing in food safety and service excellence assessments and are currently testing a model for delivery assessments. Below please find delivery model insights to organizations looking to institute delivery services or upgrade their existing programs: 

• Add staff to accommodate orders at peak hours. If you notice a big uptick in delivery requests at your peak hours, you may need to bring additional staff in to keep up.
• If phone orders are accepted, ensure that the process is clear and seamless; a quick answer, clear communication, friendly tone, and helpful upsells should all be considered.
• If you’re working with third-party delivery, develop a process for drivers and clearly communicate it to the those companies and their drivers. Some restaurants have begun designating special parking spots for delivery drivers, allowing the restaurant staff to easily identify drivers and get orders out the door fast.
• Packaging for transport is quite different than the usual “doggie bag.” These aren’t leftovers and shouldn’t look like that. The order needs to be compartmentalized so that each piece still looks great after transport.
• Develop and implement standards for maintaining the hot and cold chain, and ensure that all delivery partners have the tools and materials needed to deliver quality products.
• Examine – and re-examine – your packaging and be sure that it’s designed to maintain the integrity of your product.
• If there are items normally prepared by wait staff (salads, shakes, etc.), it can be important to consider how those are handled for delivery orders where the wait staff isn’t tipped. 
• In today’s world, we do have to worry about security. Some companies are looking at security seals (i.e. tamper seals) on the packaging, especially if using third-party delivery.
• At the delivery point, whether in-restaurant pick-up or at the front door (if self-delivered), replicating the friendly interaction of wait staff is key to making the process an extension of a restaurant’s brand experience. 
• If you are using a third-party delivery service, establish clear standards for acceptable quality and safety, and what actions will be taken if those standards are not met. Continually evaluate and update these standards as your delivery products and model evolve and change. 

Vernon Tirey, Founder and CEO of LeaseQ

Financing will become a necessity for food and beverage distributors. According to Forbes, because of tough legislation and high operating costs, 60 percent of restaurants fail within their first year and 80 percent fail within five years. Selecting the right financing options helps restaurants survive business fluctuations and save cash for day to day operations.

Only a handful of food and beverage manufacturers today offer finance programs, so it’s up to the channel to bring financing into their solution set. Distributors must use financing as a sales tool and to capture customers more effectively – or fall behind other channel players.

“Unbankable” customers will become a thing of the past. The National Restaurant Association states that seven in 10 restaurants are small business single-unit operations. More and more, these small business will be turning to alternative lending solutions for better financial products that meet their requirements. The idea that “unbankable” businesses and consumers need to be serviced is catching on. There is money to be made in the sector, but like the internet bubble, we expect to see some consolidation of alternative lenders.

Equipment-as-a-Service (EaaS) will pick up steam. 

We will continue to see the “uberization” of equipment with businesses choosing to rent equipment versus leasing or buying it. We expect the first areas of rapid growth for Equipment-as-a-Service (EaaS) to be more industrial applications than restaurants. But, it’s only a matter of time until commercial stoves and refrigeration manufactures jump in and figure out ways of monetizing equipment use in restaurants. In trucking, EaaS is called “pay by the drip”, where operators rent a truck for a project or other length of time to avoid the large upfront cost and preserve cash. Regardless of vertical, equipment vendors must find innovative ways to finance the equipment being rented.

John Waldmann, Co-founder and CEO of Homebase

Restaurant software–from online scheduling to the POS–will get smarter in 2018.

With the rapid advances of machine learning and AI, I expect that more smart tools will emerge to help busy managers and owners make better decisions, faster.

There is so much data created in a restaurant. It’s not long before affordable technology can parse that data to improve efficiency, consistency, and the customer experience.

I also expect we’ll see more restaurants continuing to shift their back office documents from paper to digital.

As we saw after hurricanes Harvey and Irma hit the US mainland, paper documents are endangered by natural disasters from rain, broken windows or flooding. Add the possibility of a kitchen fire, and paper documents can easily be destroyed. Valuable paperwork can be lost forever. By moving your important documents from paper to digital, all your key restaurant information is safely stored in the Cloud.”