MRM EXCLUSIVE: Restaurants’ Lockdown Lessons Are Key to Coping with Soaring Costs
4 Min Read By Eric Rosenthal
Restaurants must keep innovating to elevate the diner experience.
It’s a tough time to be in the restaurant business. Food prices are soaring amidst supply chain disruptions, increasing labor costs, and processing plant shutdowns. Poultry prices are up 15 percent to 18 percent; the cost of eggs has risen 73 percent. The food service industry is scrambling to keep up with these new costs, pushing the price of a restaurant meal to a 40-year high. At the same time, Americans are facing a cost-of-living crisis and consumer price inflation, leaving them with far less disposable income.
In other words: restaurants are facing higher operating costs — and are raising prices — at exactly the time when diners are least able to pay more. While increasing grocery costs could lead some consumers to eat out instead, it’s clear that restaurants need to do more to justify higher prices and improve the customer experience.
Fortunately, today’s restaurateurs have a playbook that can help them to do precisely that. During the pandemic, restaurants of all kinds embraced new technologies and innovative business models to deliver elevated service, curbside convenience, and a digitized consumer experience. To cope with their current challenges, food-service businesses need to look back on their lockdown experiences — and keep on innovating in order to keep customers coming back for more.
Delivering five-star customer service is perhaps the most important thing restaurants can do to make higher prices more palatable for cash-strapped guests. Seven out of 10 U.S. consumers say they’re happy paying higher prices for great service. A top-notch restaurant experience also leads to repeat visits and online recommendations – crucial for restaurants, given that a one-star Yelp rating increase can boost revenues by 5 percent to 9 percent.
The challenge for restaurants is adding value to the dining experience through superlative face-to-face service — while also dealing with high staff turnover and labor shortages. That’s a two-pronged problem: on the one hand, restaurants need to elevate the employee experience and ensure retention. And on the other hand, new employees need to be quickly and efficiently onboarded, and given the tools and know-how to deliver excellent service.
On both fronts, the new technologies that restaurants embraced during the pandemic can help. With digital tools — from task checklists, to smart POS workflows, to intelligent scheduling systems — it’s possible for restaurants to do more with less, and keep serving meals without compromising the customer experience.
Such tools can also help eateries to meet the evolving expectations of their employees: 77 percent of restaurant workers now prioritize connection with coworkers and managers, for instance, and 63 percent want to be able to work autonomously. To strike the right balance, many restaurants are now using digital tools not just to provide teams with bespoke training and more efficient workflows, but also to engage employees and empower them to share their ideas with each other, their supervisors, and even regional or national managers.
Customers missed the human interaction of the restaurant experience during the pandemic, but there are many features of pandemic-era dining that they want to keep. Ecommerce-style click-to-order food delivery and curbside collection became restaurant industry mainstays over the past two years, and customers have learned to love the flexibility and convenience such technologies offer. The trend shows no signs of fading: the National Restaurant Association’s 2021 report says 53 percent of adults now consider takeout or food delivery essential to the way they live.
Restaurants should now tap into the same spirit of creativity and convenience to keep engaging their customers. During the pandemic, for instance, some restaurants deployed food trucks to handle to-go orders, or opened ghost kitchens solely for delivery and pick-up. Those strategies remain powerful methods of engaging and serving customers in efficient and cost-effective ways,and aligning the restaurant experience to the evolving preferences and needs of today’s customers.
Beyond continuing to offer online ordering for take-out and delivery, though, restaurants now need to bring digital convenience into the eat-in experience. Instead of traditional paper menus, restaurants can offer QR codes and click-to-order options that simplify ordering and paying while also personalizing the dining experience for customers. Or go further still, and use AI customization to show customers personalized recommendations based on past orders – a feature four-fifths of diners say they want to see more of.
There's also growing demand for online ordering prior to arrival, so that restaurants can prep dishes before diners even reach their table. Once guests have eaten, meanwhile, QR codes can be used to enable contactless mobile payments, giving guests a safer and more streamlined experience. Such technologies can also help restaurant staff better manage and track tables, at a moment when half of those workers say they want tools that would make their jobs easier.
Embrace the New
Rising prices seem likely to persist for the foreseeable future, and many restaurants will need to charge customers more to stay in business. But that means restaurants will also have to work harder to keep patrons happy. As we enter the post-COVID era, restaurants need to lean into the digital innovations that helped them through the pandemic, be willing to adopt fresh technologies, and use them to deliver new value for diners.
Even at the height of the pandemic lockdowns, restaurants inspired incredible loyalty, with customers purchasing gift cards and take-out meals to support their favorite restaurants. Many diners are eager to continue showing their support, even if it means paying more — but they expect convenient, high-quality, and memorable dining experiences in return.
The best way of doing this is to embrace the new technologies and business practices that restaurants relied upon to weather the COVID crisis. Whether it’s improving the customer experience, elevating training and engagement for employees, or unlocking new business intelligence across networks of restaurants, digital tools have a vital role to play in today’s fast-changing restaurant industry.