AI in the Restaurant Industry: Unlocking Opportunities to Reduce Costs and Increase Efficiency

Artificial intelligence (AI) is transforming companies across all industries including the restaurant sector.  Restaurants are integrating AI in many facets of their operations to gain a competitive advantage. Raydiant’s “The State of AI in Restaurants” report found that 62 percent of restaurant leaders believe that AI offers a significant competitive advantage to restaurants that adopt it, with 67% feeling well-positioned to leverage AI for market differentiation.

Restaurants are increasingly harnessing AI technology to boost efficiencies and reduce costs. While there are a host of compelling use cases for AI in the restaurant industry, many restaurant operators today are leveraging AI to transform back-of-house operations. Some of the ways AI-powered technologies are helping restaurants elevate back-of-house efficiencies and reduce costs include detecting and preventing fraud, providing actionable data and insights, optimizing credit card processing, enhancing staffing and scheduling, and creating content.

Detect and Prevent Fraud

Payment card fraud led to $33 billion in losses worldwide in 2022, with $13.6 billion of those losses occurring in the United States. AI technology can help restaurants protect themselves and their customers from financial losses stemming from card-related fraud.

To detect and prevent fraud, machine learning and AI algorithms continuously monitor and analyze massive amounts of transaction data in real time. These algorithms work to identify suspicious activities and anomalies in transaction data and flag and block potentially fraudulent transactions at their start. 

Using AI to detect and prevent fraud not only helps restaurant operators avoid the business costs associated with fraudulent transactions but also protects their customer base which results in increased brand loyalty and sales. 

Surface Actionable Data and Insights

One of the best use cases of AI in the restaurant industry relates to the real-time data and insights surfaced by the technology which can help restauranteurs make more informed decisions.

While human-powered data discovery and analysis is time intensive, these same tasks can be accomplished in minutes using AI. The technology can rapidly surface data and identify and analyze patterns related to customer habits and preferences, track sales trends, forecast demand for ingredients, and identify operational bottlenecks. These types of actionable insights are valuable in helping restaurants improve operational efficiencies to reduce costs and enhance profitability.

Optimize Credit Card Processing

Credit card fees represent a major cost center for restaurants. In fact, credit card processing fees rank as thethird highest cost of doing business behind the cost of food and labor. While these fees can be a growth inhibitor for restaurants, AI technology can optimize payment processing to help restaurants increase profitability, and drive growth.

Restaurateurs can leverage AI technology to analyze financial data and identify potential cost-saving opportunities. For example, AI can audit monthly credit card statements in seconds – a job that can take restaurant owners between three and 21 days depending on the size of the business. Because this task is such a time sink, many restaurants conduct quarterly statement audits, leaving money-saving opportunities unidentified for months on end.

Innovative AI technology designed to review and analyze credit card statements uncovers hidden processing and merchant fees within these statements, showing restauranteurs where they could be saving money when processing cards. Leveraging AI tools to audit monthly credit card statements is a tool restaurant operators can use to improve their financial health for long-term success.

Enhance Staffing and Scheduling

Staff scheduling is one of the most challenging tasks for restaurant operators. Overstaffing increases labor costs while understaffing can negatively impact customer experience. By analyzing historical sales data, AI can predict customer volumes and optimize shift allocations for adequate staffing. Scheduling the right number of staff for each shift enhances operational efficiency and productivity, leading to smoother operations, happier employees, and more satisfied customers.

Create Content

AI is also a great tool to help restauranteurs develop content tailored to their business. The technology not only can create content but also optimize it for SEO purposes to help target customers. It can also generate promotional copy based on customer preferences, personalizing the communication to boost sales and enhance customer satisfaction. Blog posts, newsletters, social media posts, and menu item descriptions are other ways restaurant owners can use AI to reduce labor costs and easily generate engaging content.

AI technology is transforming the restaurant industry, providing tools that prevent and detect fraud, surface actionable data and insights, optimize credit card processing, enhance staffing and scheduling, create content, and more. The right AI tools can transform restaurant operations, unlocking operational efficiencies and cost savings that can drive growth and profitability.