MRM Research Roundup: Embracing Tech, Takeout Takeover and Friendly Fast-Food Staff

In this edition of MRM Research Roundup, we feature news regarding the increasing use of technology in the restaurant space, takeout trends, and friendly fast-food workers.

Restaurateurs Rapidly Embracing Tech

Technology use in restaurants is accelerating, creating new touchpoints between restaurants and the consumers they serve, according to the National Restaurant Association’s Restaurant Technology Landscape Report 2024. The report identifies the varying expectations consumers have regarding technology, depending on whether they are dining at a fullservice restaurant or ordering delivery to their homes, as well as generational differences in preferences.

"Restaurant operators have tremendous entrepreneurial spirit, and they are constantly innovating – sometimes through new dishes or flavors, and sometimes through new business practices,” said Michelle Korsmo, President & CEO of the National Restaurant Association. "More than three in four operators say technology gives them a competitive edge, and this research will also help operators find the right technology fit for their restaurant and their customers. In addition to valuable research on restaurant operator outlook, our research on the technology landscape in restaurants provides insights on consumer expectations that operators need to confidently evaluate their tech investments."

Key highlights include:

• Expect to see more technology in the coming year – 55 percent of operators are planning investments to improve their service areas, while 60 percent are looking for technology that will enhance the customer experience.
• 16 percent of operators plan to invest in Artificial Intelligence (AI) integration (including voice recognition) in 2024.
• 82 percent of Gen Z adults are comfortable placing an order at a limited-service restaurant with a smart phone app.
• 65 percent of all adult consumers would be comfortable paying their check at a fullservice restaurant with a computer tablet at the table.

Restaurant operators are getting creative in how they expand technology offerings, paying close attention to consumer preferences, but generational differences persist. When asked how likely they’d be to interact with a tablet at the table, a solid majority of Gen Z adults, millennials and Gen Xers say they’d use these options but fewer than half of baby boomers said they would.

Compared with fullservice and limited-service options, the use of technology in the delivery segment is already baked into consumers’ expectation. They expect to be able to access, order, customize and pay for delivery orders through their computers or smartphones and if they can’t, they’ll order from somewhere else.

"The data clearly show that restaurant operators and owners are rapidly embracing technology and integrating it into their daily operations," said Hudson Riehle, Senior Vice President of Research and Knowledge for the National Restaurant Association. "Understanding which technologies customers in each segment would like to have, really want, and consider essential, provides operators with substantial opportunities to enhance the customer experience, amplify marketing and operate more efficiently."

Americans Choosing Takeout

New research from TouchBistro reveals that Americans are choosing takeout over dining in, quality over flashiness, and human connection over AI and QR codes. Of the multitude of trends within the report, the overarching sentiment is that the rising cost of living, and subsequent tightening of purse strings, has made consumers across the country into more discerning diners.

By surveying over 1,500 diners from across the country, TouchBistro’s free 2024 American Diner Trends Report outlines how U.S. dining habits have shifted and what trends restaurateurs should watch.

Generational Divides

The report reveals many distinct differences between the dining habits of Boomers, Gen X, Millennials, and Gen Zs when it comes to both dining in and takeout.

Younger generations are more inclined towards utilizing technology and putting a higher priority on convenience when it comes to takeout. For instance, delivery is the preferred method of takeout for 46  percent of Gen Z, while 34  percent of Gen Xers prefer the drive-thru. The way consumers order takeout also shakes out along generational lines, with 38  percent of Boomers preferring to call in their orders, while 23  percent of Millennials and 23  percent of Gen Zs opt for the restaurant’s own app.

When it comes to choosing where to dine, each age group does it a little differently:

• 52  percent of Gen Z diners have made the decision to try a new restaurant based entirely on positive feedback on social media.
• 67  percent of Millennials have visited a new restaurant based solely on positive online reviews were the biggest motivator.
• 83  percent of Gen Xers have visited a new restaurant solely based on recommendations from friends or coworkers.
• 80  percent of Boomers have decided to try a new restaurant based on recommendations from family or a significant other.

“Our report shows that the perfect dining experience differs across various generations, and underscores the importance of cultivating an inclusive, welcoming atmosphere for every diner,” said Samir Zabaneh, Chairman and CEO of TouchBistro. “This involves recognizing that different age groups may have unique expectations and preferences. By putting this understanding into practice and bearing these generational differences in mind when integrating new technologies and offerings, operators can enrich the overall dining experience.”

Takeout Takes Over

Ordering takeout instead of dining in has become increasingly convenient and cost effective. As a result, over 2-in-5 (43  percent) of U.S. diners are ordering takeout at least once a week, compared to just 39  percent who say they dine in with the same frequency.

What may be a surprise is that many prefer to keep it old-school when it comes to ordering, with 72  percent of diners preferring to order takeout directly from a restaurant as opposed to using a third-party app. When ordering directly, 29  percent of diners noted they usually order over the phone, 24  percent directly through the restaurant’s website and 19  percent through the restaurant’s own app.

Notable takeout trends:

• When it comes to delivery, diners report that they will wait a maximum of just 30 minutes, on average, for their order.
• Nearly a third of Americans (30  percent) prefer to go into a restaurant to pick up their takeout orders and the drive-thru ranks a close second, with 26  percent preferring this method.
• The number one desired takeout innovation is the option to pre-schedule pickup/delivery orders (23  percent). At the bottom of the list, only 2  percent wanted AI-generated order recommendations.

This highlights the importance of integrating the right technology for restaurants to maximize their takeout offerings, while balancing speed and quality of service.

360-Degree Experience

The dining experience begins far before the consumer steps foot into the establishment. Before deciding on a new restaurant, 85  percent look at the menu online first, while 80  percent look at the restaurant’s website. In addition, 64  percent of U.S. diners conduct a Google search before visiting a restaurant. When doing this research, 67  percent are looking for food quality, 54  percent for a specific type of cuisine, and 54  percent are searching for value for money.

Once Americans reach the restaurant, personalized service is paramount. Only four percent of U.S. diners want to order from a QR code, whereas a whopping 85  percent of American diners prefer to order from a physical menu and speak with a server.

While technology is essential to making restaurants more efficient, it’s clear that operators need to ensure that technology never gets in the way of hospitality.

“Consumers certainly have mixed feelings about the role of tech in their dining experience, with their main concern being that it will take away from that personal, human-led experience," said Samir Zabaneh. "There is ample opportunity for operators to utilize technology without disrupting the guest experience by leveraging it in the back of house or to create digital touchpoints to draw consumers to the restaurant. At TouchBistro, we’ve seen firsthand how solutions such as inventory, invoicing, and email marketing automations can all help to make operations faster and more efficient, ultimately allowing staff to better focus on the in-venue guest experience.”

Looking Ahead

As dining habits continue to be heavily impacted by economic conditions and generational differences, here are five emerging diner trends to watch:

Menu Price Increases Due for a Pause: While inflation has slowed, diners are still feeling the effects of cost of living increases. 31  percent say a price hike would significantly impact their choice to dine at a particular restaurant – and that number jumps to 40  percent among Gen Zs, which is the group that dines out the most.

Rethinking the First Touch: This year’s data shows that a lot goes into the decision-making process before a diner visits a new restaurant. Since a potential customer’s first experience with a restaurant is now a virtual visit, restaurants need to make sure they are giving their digital footprint proper attention.

Speed Without Sacrifice: The ease and speed of ordering takeout has significantly impacted diners’ expectations. Twenty-one  percent say they won’t even wait a full 15 minutes for takeout/delivery and this number jumps to 43  percent among Boomers. However, it is important to note that the biggest takeout frustration among U.S. diners is receiving the wrong order. As a result, operators need to strike the right balance between speed and quality.

Restaurant Tech with a Human Touch: Technology has become an integral part of the dining experience, but consumers still crave a human connection. As Americans have concerns about how technology may alter their dining experience, restaurants need to ensure they prioritize customer service.

Loyalty Programs Built for Power Users: Nearly half (46  percent) of Americans say they are currently part of a loyalty program, which is up 10  percent from 2022. This trend is particularly noteworthy as some of the most frequent diners are loyalty program members. In 2024, all restaurants – especially QSRs – should focus on engaging their power loyalty users to reap the most rewards from loyalty programs.

QSR Demand for Apps and Kiosks

Investments in mobile apps and in-store kiosks continue to drive demand among quick-service restaurants (QSRs), with growth in third-party delivery showing no signs of slowing down, according to Delaget’s annual QSR Operational Index report. 

Delaget’s 2023 QSR Operational Index includes the latest findings and trends in sales, delivery channel growth, losses, staffing, customer experience, and more. Among the key findings in the report:

• Third-party delivery is up 29.8 percent year over year.
• Mobile app sales are up 57.2 percent year over year.
• In-store kiosk sales are up 66.9 percent year over year.
• For every dollar in sales, the average QSR operator is spending about 28¢ in food costs and 22¢ in labor.
• Channels like kiosks, mobile, and delivery climb, while drive-thru have dipped 8.1 percent year over year. This represents a 6-year low for drive-thru, which hit an all-time high in 2020 when dining rooms closed due to COVID-19.
• Turnover rates are down from an average of 169 percent in 2022 to an average of 139 percent in 2023. However, this may be an indication of less employees being hired.

“2023 proved to be a transformative period for the restaurant industry, building upon the digital acceleration witnessed in previous years. As our 2023 Operational Index report shows, the QSR industry is still going through a period of reinvention, with third-party delivery, mobile app and kiosk sales continuing to change the game,” said Jason Tober, CEO of Delaget.

St. Patrick's Day Demand

On Premise Impact Report One Pager which uses BeverageTrak data to check performance across both chains and independents throughout mainland USA, takes a deep dive into the St. Patrick's Day weekend. 

Some key findings for you from the full report:

• With St Patrick’s Day 2024 taking place on a Sunday as opposed to a Friday in 2023, it is unsurprising that velocity is down vs last year on the day (-10 percent). However, when looking at the Friday-Sunday weekend, this year performs well compared to 2023:​
  • Velocity over the St Patrick’s Day weekend was up +11 percent vs last year, seeing increases in both ticket count (+7 percent) and average check value (+4 percent).
• The average US outlet experienced a velocity uplift of +6 percent on Sunday March 17, vs the average Sunday of 2024 so far. This was due to increases in both traffic (+1 percent) and average check value (+5 percent).
  • Performance in Chicago was particularly strong, with trends of +57 percent on the Saturday (the day of the parade), and +47 percent on St Patrick’s Day itself.

Order Cancellation Impact

A recent study conducted by Otter revealed figures on the financial impact of takeaway order cancellations for UK restaurants. The study found that the last hour of operation is a critical time for cancellations, with restaurants experiencing a 1.74x higher cancellation rate than those operating beyond this hour. On average, 20 percent of orders and 31 percent of cancellations occur within the last hour before closing time. In response to this challenge, Otter advocates for a review of restaurant operating hours and calls on businesses to establish buffer times to mitigate the clash between last-minute orders and closing schedules.

Based on a comprehensive analysis of 30 million orders processed in the UK from January 2023 to December 2023, Otter has identified key patterns and trends that reveal strategies to reduce cancellations and protect revenue. The research shows that cancellations predominantly happen during peak ordering periods. The evening rush from 6 to 9 pm witnesses the highest proportion of cancellations, accounting for 27 percent of the day’s cancellations among 36 percent of orders. Off hours between 10 pm to 10 am account for 28 percent of cancellations, but only 13 percent of orders.

The impact of order cancellations is felt across the country, with UK restaurants facing a loss ranging between 0.66 percent and 1.33 percent of their weekly takeaway sales due to cancellations. For a restaurant generating a weekly revenue of £10,000, this translates to a loss ranging from £66 to £133 per week, or between £3,564 and £7,182 per year.

The impact of order cancellations extends beyond immediate financial losses. As delivery apps increasingly prioritise high-performing restaurants, most platforms will automatically pause stores who experience two cancellations or non-acceptances in a row, resulting in increased downtime and decreased order volume.

Friendliest Fast-Food Workers

 A new study has revealed the country’s that are home to the friendliest fast food workers – and the US comes in 68th place. 

Despite its renowned love for fast food, with the very first fast food chain being established 103 years ago, the USA ranked below the top 50, with an average rating of 3.68 out of 5. This is compared to the likes of Indonesia, Tanzania and Algeria, where the average rating for nearby fast food restaurants was at 4.4 out of 5. 

The research, conducted by Spin Casino, looked at five of the most popular fast food chains; McDonalds, Burger King, KFC, Subway and Starbucks, in each capital city across the globe, analysing customer ratings while taking into consideration quality of service and general visitor experience.

The USA was succeeded by Indonesia, which came top with the highest customer satisfaction rating of 4.48 out of five on Google Reviews. 

In the USA, Starbucks employees were the friendliest, with a rating of 3.96 out of five, according to the research. 

The top 10 cities with the friendliest fast food workers in the world

1. Jakarta, Indonesia
2. Dar es Salaam, Tanzania
3. Algiers, Algeria
4. Karachi, Pakistan
5. Guatemala City, Guatemala
6. Nairobi, Kenya
7. Bogota, Colombia
8. Santo Domingo, Dominican Republic
9. Alexandria, Egypt
10. New Delhi, India

Sustainability Is Top Priority

Blue Yonder released its third annual Consumer Sustainability Survey, which polled U.S.-based respondents on their habits and preferences for environmentally-friendly shopping. Sustainability remains a top priority for consumers, with 78 percent of respondents reporting that sustainability concerns are very or somewhat important to them when choosing to buy a product or shop at a retailer.

“We’re encouraged to see that the majority of consumers take sustainability into account when making purchasing decisions,” said Saskia van Gendt, chief sustainability officer, Blue Yonder. “It’s especially promising that so many respondents are willing to spend more for sustainable products, given that price concerns, exacerbated by the ongoing challenge of inflation, have marked conversations around consumer behavior over the last year. Their willingness to spend more should send a clear message to brands and retailers that investing in sustainable solutions and practices is worthwhile, not only for the planet but also for maintaining consumer loyalty and trust.”

Sustainability Remains a Key Priority for Consumers, Especially Gen Z and Millennials

Survey results also showed that consumers not only have a continued interest in sustainable shopping habits, but also they are willing to pay more and opt for greener shipping options.

A healthy majority (70 percent) of consumers indicated that they have shopped at a retailer promoting their products as sustainable at least once or more in the past six months, which closely matches the 74 percent who reported doing so in 2022 and 2023. Interest in sustainability is also growing at a steady pace: 47 percent of consumers reported that their interest in shopping sustainably has greatly or slightly increased in the last year. That interest is underscored by consumers’ willingness to spend more for sustainable products, with 40 percent of respondents saying they would pay up to an additional 5 percent, and 25 percent saying they would pay an additional 10 percent or more.

An impressive 83 percent of consumers reported that they are willing to delay deliveries if an incentive is given to do so. However, this flexibility has its limits. Only 23 percent of respondents said they were willing to delay a delivery by a week or more. Nearly half (47 percent) of consumers also said they would be likely or very likely to pay more for greener shipping options such as lower carbon footprint delivery and sustainable packaging. Sentiments toward sustainable delivery differ slightly by generation1. Millennials (85 percent) are the most likely to delay product delivery, followed by Gen Z (79 percent), Gen X (76 percent) and Baby Boomers (67 percent). More broadly, Gen Z and Millennials are most concerned with sustainability, with 85 percent and 84 percent, respectively, reporting that sustainability considerations are important to them.

Consumers Prefer Certain Products, Methods For Prioritizing Sustainability

The products consumers eat and bring into their homes are top of mind when it comes to sustainability. Over half of consumers reported that they incorporated sustainable food products (60 percent) and household products (55 percent) into their shopping habits in the past year. Respondents are also cognizant of the methods brands use to improve sustainability: 61 percent of consumers said reducing food or inventory waste was the most important environmental practice a retailer or brand should adopt. An equal number (61 percent) said using recycled content or recycled packaging.

“Consumers are looking closely at exactly how brands are executing on their sustainability goals,” said van Gendt. “With more than one-third (35 percent) of respondents reporting that they don’t trust brands’ sustainability claims, it’s more important than ever for companies to have full visibility into their supply chain operations so they can back up their sustainability claims with tangible data to strengthen consumer trust.”

Other Key Findings:

Consumers Value Sustainability from Delivery Companies: Consumers are looking at sustainability throughout the entire end-to-end supply chain, including last-mile delivery. More than half (59 percent) of respondents reported increased purchasing sentiment toward online shopping with delivery companies who invest in electric trucking to deliver orders.

Electric Vehicles: Consumers’ sustainable mindsets are extending to their car shopping habits as well, which is important as personalization continues to become a trend in auto manufacturing. When it comes to electric vehicles, 40 percent of respondents would be likely or very likely to consider purchasing one. Of those who would purchase, 55 percent were Millennials, 48 percent Gen Z, 36 percent Gen X, and 20 percent Boomers. The top concerns shared by respondents around owning an electric vehicle include range anxiety, i.e., fear of running out of battery charge (62 percent), limited charging infrastructure (58 percent), and the initial cost of the vehicle (58 percent). The top benefits shared by respondents influencing consumers’ interest in EVs include cost savings on fuel (55 percent), range on a single charge (46 percent), government incentives (40 percent), and environmental impact (40 percent).

Skepticism Toward Sustainability Claims: Consumers’ enthusiasm for sustainability isn’t superficial, and they tend to think critically about brands’ claims. Nearly half (48 percent) of respondents said they can only “sometimes” trust a brand’s sustainability claims, depending on its message, brand reputation and history. More than one-third (35 percent) of respondents said they do not trust brands’ claims, citing the need for their own additional research (21 percent) and the belief that brands tout sustainability regardless of whether it aligns with their actions (14 percent).