As we near the last quarter of 2019, it’s time to take a sneak peek into the future of foodservice. Will 2020 be the year waiter paging systems become commonplace at every corner bistro? Imagine buzzing your waiter for a drink refill. He’s at the other end of the room but knows the thirsty patron at Table 421 just asked for a third refill. How about robot hostesses who can take your order and chat about the weather? More importantly, how will a food service macro trend (like any of the two we just described) impact your business?
Our crystal ball tells us 2020 will be a watershed year for the restaurant industry. A few months ago, we dived into specific use cases of AR and VR in restaurants. However, these disruptive technologies haven’t yet been implemented on a wide basis. Instead, 2020 will introduce other significant trends.
For restaurants, the way forward isn’t always a cut-and-dried affair. After all, the entire food industry is built upon trend prediction. Restaurants want to know when to sell bacon burgers and when to switch them up with portobellos. Those are all micro-trends, however.
We’re interested in the big fish today, the massive trends on the horizon. Most importantly, we’re interested in how to leverage those trends to win more customers.
Below, we list 3 ways the restaurant industry will evolve in 2020 — whether we like it or not.
1. IoT In The Food Supply Chain
After the romaine lettuce recall early this year (and last year), dire warnings about foodborne illnesses are increasing in intensity.
In all, food recalls have jumped 10% over the last 5 years. Specifically, meat and poultry recalls have increased by more than 80%!
To make matters worse, FDA inspections are occurring less often, and standards are in freefall. Presently, the average food recall cost is $10 million per incident, while 10% of recalls cost over $100 million. If your restaurant relies on a key ingredient that’s under recall — you have a big problem!
Restauranteurs may think these costs are primarily limited to the supply chain framework and restaurants with hyper-specialized offerings. However, a significant layer of threat exists for all restaurants when food gets recalled. Sick customers can negatively impact your brand image. As 2020 looms, branding is set to outpace prices and product offerings as your key assets.
That makes finding ways to combat potentially weak links in food supply chains critical for businesses that want to preserve their brand image.
Technology As A Leverage To Get More Customers
Technology is the magic key that will unlock the doors of food quality control for restaurants.
Smart QR codes and IoT tracking capabilities can give you insights into the origins, quality, and touchpoints of your produce, meats, and grains. Meanwhile, smart thermostats can assess food quality throughout the entire supply chain journey. Essentially, IoT technology facilitates the monitoring of cold chain shipments, reducing your production costs and ensuring the quality of your end product.
Today, restaurants have limited optics into the origins of their food sources, outside of brand promises and nutrition labels. IoT will unlock an entirely new layer of visibility for all restaurants — helping them improve their food quality and reduce the incidence of foodborne illnesses.
How This Food Service Macro Trend Can Help Your Restaurant:
- Smart food labels can alert you to expiring products.
- IoT can automatically keep temperatures consistent throughout the food lifecycle.
- Smart labels will help restaurants understand the origins of their food products — which offers an extra layer of value for marketing, branding, and consumer trend predictions.
2. The Fracturing of The Online Ordering Framework
Online ordering is here to stay. 60% of US consumers order delivery or takeout from a restaurant once a week. Additionally, 31% of consumers use 3rd party delivery apps 2x per week. We’re well past the “this is a trend” stage of online ordering. That said, the rapid progression (online ordering is growing 300% faster than dine-in) of online ordering is introducing some unique dynamics into the restaurant space.
By all indications, the 3rd party delivery market will begin to see some intense pushback from in-house ordering systems in 2020. Don’t get us wrong. There’ll always be a place for 3rd party delivery platforms. However, between intense competition from other 3rd party apps and shrinking in-restaurant patronage, 3rd party apps are in a pickle. They succeeded at a time when restaurants were unable to leverage expensive new technology to step into the digital age. These 3rd party platforms served as a conduit to help restaurants access the digital market.
But, as labor costs rise and intra-industry competition increases, restaurants are struggling to justify the 25% cut these 3rd party apps take — especially when the average restaurant’s net margins are only around 5%.
So, 2020 will see restaurants developing their own online ordering systems to remain competitive, lean, and agile. This state of affairs will ultimately lead to a fracturing of the current online ordering framework.
Is 2020 The Year Third-Party Platforms Lose Their Relevance?
Netflix launched in 1998. It became wildly successful because it allowed existing networks to unlock streaming profits without jumping into the digital space. Now, all of those networks understand the value of their content. They’re creating their own systems and pulling shows from Netflix.
After all, these networks don’t want Netflix to profit off THEIR shows. Similarly, many restaurants can no longer justify their partnerships with 3rd party platforms.
2020 will be the year that thousands of restaurants break away from 3rd party apps and create their own online portals. In turn, this will inspire a renewed interest in local SEO marketing and website development services.
To be clear, 3rd party apps will still grow in 2020. However, we’re going to see the increasing adoption of individual portals as the market fractures into smaller, more compacted ordering systems.
How This Food Service Macro Trend Can Help Your Restaurant:
- SaaS businesses like 9Fold can help you create hyper-branded online ordering systems.
- Shifting users from 3rd party apps to your online ordering system will give you more control over your marketing strategy.
- Driving traffic to your own portal can create new branding opportunities.
- By attracting users into your funnel, you can automate marketing campaigns and use that data to build better analytics algorithms (and extract better insights from your data).
3. Fighting Turnover with The Right Culture
Sure, technology is likely to play a massive part in your restaurant’s success in 2020. That said, gadgets alone won’t increase your brand prominence or market share.
Instead, “culture” is the magic word for restaurants hoping to reduce bloated turnover rates (over 70% for the restaurant industry). It isn’t that restaurants aren’t aware of how brand culture can drive supply chain momentum and agility. They’re just not sure how to really fit them into their existing schemas.
Your restaurant’s culture is the culmination of every employee’s unspoken words, feelings, and thoughts. Unfortunately, these elements make “culture” an incredibly difficult thing to define. Still, that culture is the glue that holds your restaurant together. It affects worker engagement and directly impacts every customer’s perception of your restaurant — which ultimately reflects on the diner experience.
In other words, your culture is your restaurant. That said, does your restaurant have a positive or negative culture? Additionally, is that culture supporting or hampering your revenue objectives?
The Importance Of Creating The Right Culture
Creating a solid culture in a world where 59% of restauranteurs grapple with staffing as their primary challenge can literally keep your doors open. In fact, 89% of prospective employees maintain they won’t work for a brand that has a negative reputation with previous employees. But, here’s the problem — creating an optimum work culture isn’t easy.
You have to juggle multiple challenges. First, you have to hire the right people. Next, you have to create an environment they can thrive in. Above all, you have to ensure that environment delivers an authentic diner experience.
That said, there’s a silver lining among the weeds. The rewards for creating a vibrant culture are abundant. Having a great culture attracts better talent, which results in lower turnover and profit increases of up to 33%.
Increasing margins and reducing turnover rates will certainly be the two biggest growth concerns for restaurants in 2020. Ultimately, the right culture will help deliver both objectives.
How This Food Service Macro Trend Can Help Your Restaurant:
- Creating a positive culture today will help your restaurant stay competitive in a tight labor market.
- The vibrant culture you create will positively impact your diners and create better dining experiences.
- Culture is the key to authenticity and higher revenue takings.
Leverage The Right Food Service Macro Trend To Win More Customers In 2020
We could have discussed 20 or 30 important microtrends. However, those only impact you TODAY. Meanwhile, the above food service macro trends will carry you forward into the future. IoT is coming (and staying). The food supply chain is about to undergo a drastic change, giving restaurants more power and visibility than ever.
Meanwhile, the online ordering market is set to fracture, giving restaurants the ability to win back some of their own customers from 3rd party platforms.
Finally, restaurant culture will become a primary driver of success in a white-hot economy low in unemployment and high in consumer expectations.
While we may not be able to help you create smart food labels or improve your supply chain, we can help in one very important way. We can help you create the most engaging, interactive, and branded online ordering system you’ve ever seen this side of the universe. And, best of all, we won’t take 25% of your profits to do it. In fact, we won’t take any profits off the top of any of your orders.
Here’s the bottom line: We’re here to help restaurants win more customers — one plate at a time. So, if you’re interested in stepping up your online ordering game, don’t wait. Contact us to learn how you can leverage 9Fold’s online portal system to exponentially increase your revenues!
