We often hear people saying that automation “replaces jobs” but we want to quickly dispel that nonsense. Does a hammer displace a carpenter, does a tractor replace a farmer, does a POS system replace a sales merchant, the answer is no—they are tools that make the job easier, the work more efficient, and the final product better. The steam engine or the calculator…there are tons of examples that prove this point. However, there is often a stigma that comes with automation, and we want to help educate you as a business owner (and the general public) about the real benefits of automation.
This article will include some case studies of both major restaurants/chains as well as small local favorites that have begun to use restaurant automation technologies to increase ROI for your restaurant.
Let’s start by giving you a few examples of “automation” (which is a very broad term):
Chatbots and Apps – Restaurants are using virtual assistants to respond to customer inquiries and to process and customize customer orders.
Robots – Restaurants are using AI-driven robots to increase capacity and speed of food preparation and delivery.
Recommendation Engines – Developers are designing applications which use AI to help consumers choose meals based on their eating preferences.
Kiosks – Restaurants are integrating AI-driven Kiosks to reduce customer waiting time and enhance the customer ordering experience.
Restaurant Chatbots / Conversational Interfaces
One major issue for restaurants or other service based companies is that you typically do not have a robust ‘customer service’ department… That’s why companies like Say2Eat use text based communications - also known as chatbots - that function through Facebook Messenger, Alexa, and SMS. The move towards integrating more mobile solutions to enhance the customer engagement experience is consistent with industry research.
CASE STUDY: Domino's
During the 2017 Super Bowl, Domino’s pizza added a Facebook messenger chatbot that allowed you to order pizza simply by typing “pizza” into the messenger window. Domino’s has continued to add new features and increase both the Messenger and mobile Apps. Even allowing you to voice order via iPhone.
Domino’s has attributed $4.7 billion in ‘global digital sales’ due to its investments in technology. The stock performance of Dominos over the last 7 years has gone from about $13 to well over $200!
Chatbots and conversational interfaces save your restaurant time and staff. Instead of wasting your hostesses time with 10-minute phone calls, let a chatbot or form on your website delivery the request for information to your hostess so she can respond that day and provide all the details in a quick 1 minute call. This not only saves your staff time but makes your customer happier because they are NEVER put on hold.
Food Service & Restaurant Robots
In most industries, automation has so far been hidden from the consumer’s view —no one sees the machines on an assembly line putting together their car or the robots that pick and move items through a cavernous warehouse after their online order. However, in the food service industry you may be surprised that the United States is far behind the trend when it comes to automation. Other countries have been aggressively embracing new technologies since the mid-1990s.
Most of you may not remember, but before the true innovations of recent technology, Taco Bell introduced a product called the Automatic Taco Machine in 1992! This robot would take a tortilla, fold it, and fill it with beef, lettuce, tomatoes, and cheese without having to rely on human workers, and in a fraction of the time. It could make 900 tacos in one hour.
The resurgence of automation is back, and unlike the “Taco-Matic,” one of the most well-known examples of restaurant automation is Flippy the Robot from Miso Robotics that is a food-safe burger flipper. Although it only lasted one day on its CaliBurger debut in Pasadena, CA, Flippy is back having signed with the Dodgers to start wowing fans this month at Dodger Stadium..
Another automated robot launching this month is Somabar, the automated cobotic bartender for bars, restaurants hotels, salons and lounges. With Somabar, any business with a liquor license (even with a Wine & Beer license) can enhance their operations with increased revenue and efficiency, by assisting staff and delighting customers.
Through automating the process of crafting over 300+ different cocktails, Somabar hardware and software work alongside staff during the busiest hours drastically cutting down wait time for drinks and more than tripling the efficiency of your bartender. However, Somabar also has the ability to provide any establishment with the functionality of a professional bartender even if your location does not have a full bar. And service is available 24/7 so your wait staff never needs to venture behind the bar to mix cocktails. Simply tap a button - and voila - a perfect Manhattan is poured in 10 seconds.
The allure of automation in the ‘coolest’ sense is doing real tasks that saves time and effort. And unlike a chatbot or a kiosk, the output is a tangible physical product. Automation that makes the lives of your staff easier allows them to focus on what really matters, the customer!
Food Service Apps & Recommendations
This is a sector that has been normalized by everyday products such as Google, Netflix, and Pandora. A truth about the human brain is that we like information synthesized before it reaches us, this reduces our personal cognitive load and allows us to save that function for more important processes.
In today’s world, we are inundated with choices on a second-by-second basis! It is the embodiment of the psychological phenomenon first described by American psychologist Barry Schwartz, which brief summarized is that by eliminating consumer choice, anxiety for shoppers is thereby greatly reduced.
“A new meta-analysis, conducted in 2015 and incorporating 99 studies, was able to isolate when reducing choices for your customers is most likely to boost sales. The study identified four key factors—choice set complexity, decision task difficulty, preference uncertainty, and decision goal—that moderate the impact of assortment size on choice overload. It also documented that when moderating variables are taken into account the overall effect of assortment size on choice overload is significant—a finding counter to the data reported by prior meta-analytic research.” - Journal of Consumer Psychology
Some of the benefits include:
- “Improving with use” (retention): The more you use one service, the more you stay with that single service because it ‘knows you well’ that in turn creates stickiness and reduces churn.
- Improving cart value: Amazon example…think about ‘people also purchased these items’ -- not only does such strategy result in a larger final purchase, but it compounds the efficiency for Amazon by shipping all of these items in one package, improving their margins
- Improved engagement and delight: It’s not always about making money. YouTube makes most of its money from advertisements—but the recommendations keep the users engaged with the platform longer and creates a better and more curated overall experience.
What does this all mean? If you help your customer decide what they want, they’re likely to order more. This may sound counter-intuitive, but it’s factually proven, and helps explain why many restaurants are eliminating ‘Cheesecake Factory’ style menus in favor of automated recommendations based upon individual customer preferences and personalized recommendations.
Kiosks are one of the most widely proliferated forms of automation—and one of the most obvious! It comes in the form of touch screen physical kiosks, self-checkout terminals, and even mobile apps that don’t require a physical piece of hardware but can be used on the customers own device. They all work to accomplish the same goals, to boost efficiency in the workplace, augment customer experiences, and satisfy the consumer demand.
One of our favorite local Ramen restaurants uses kiosks in the ordering and it is a consistently great experience! These strategies assist restaurants in optimizing their labor force, yet this technology is not displacing people.
“Even as automation becomes more commonplace in California, restaurant employment there has exploded, increasing 45 percent from 2001 to 2016.”
–Saru Jayaraman Co-Founder of Restaurant Opportunities Centers United (ROC)
Starbucks has seen mobile ordering and payments actually boost their sales so much that is allows them to increase the number of baristas without needing to hire more cashiers. Panera bread added staff to handle the greater order volume through its self-serve kiosks. Even Chili’s added table side tablet order—which allows them to handle tables quicker and more accurately during the heavy dinner rush.
- Check averages are consistently higher at a kiosk versus the counter
- 65 percent of consumers will use a kiosk when one is available,
- 55 percent saying they'll use it "sometimes"
- 10 percent saying they'll use it "every time."
CASE STUDY: Reis & Irvy’s
Generation NEXT is the parent company of a company that calls themselves the “RedBox of Frozen yogurt”. Each kiosk is a self-contained, 15-square-foot miniature yogurt shop that can be placed in any location. It has become popular for museums, college campuses, and even hospitals.
In March, Generation NEXT inked a multimillion-dollar franchise agreement for Reis & Irvy’s in Los Angeles and Orange County. The company has already pre-sold +/-215 franchises, representing about 1,100 robots that are now making their way to market.
Our industry will never be replaced by automation, the human element is what drives us all to experience food in new ways and what make dining such an amazing experience. A robo-chef is not going to replace a curated menu created by Wolfgang Puck. A robotic bartender will not replace your bartender, they will help the bartender pour more drinks. Chatbots & Apps won’t displace your funny and engaging waiter who listens to you and suggests the best dishes. The heart of our industry is people, but for too long food service workers have been undervalued and overworked.
At 73% employee turnover, the restaurant industry suffers from the worst staff attrition in all of corporate America. Cutting costs while retaining great employees means you must give them tools to be more efficient and succeed.
Implementing automation in the restaurant industry is essential for growing your business. Uber would not allow drivers without a GPS, nor would your contractor forgo a hammer, or your warehouse skimp on purchasing a forklift. By empowering your employees with automated tools and technologies, you will optimize your changes for success as a restaurant.