February 28, 2018
Hospitality tech: Best of February 2018
Hospitality tech: Best of February 2018

Hot of the press! Our top Hospitality technology news stories from February 2018.

Featuring: Customers would prefer if you didn’t resort to a third-party app; Everyone is paying via their mobile in China; Baby Boomers might not be as averse to Hospitality technology as you think and Panera’s customers and shareholders are reaping the benefits of its digital platform.

Customers want to order directly through restaurants, not third parties

According to Modern Restaurant Management, over 60% of customers prefer restaurant-branded websites and apps, with only 5% of Quick-Service Restaurant (QSR) customers and 8% of Casual Dining customers preferring to order through third party sites.

The findings come just as another study is published by Zonal Retail Systems and CGA Peach showing that, out of 5000 UK adult diners, more than 70% would prefer to book a table through a restaurant’s own website over a third party provider.

Taking into account the fact that 70% of QSR and Casual Dining customers would be willing to provide their email addresses for personalized offers, it seems fair to say that customers want to hear from their favourite brands directly and don’t want their only interaction to be through a middleman showing a brief rundown of the menu.

And there’s drawbacks to using third-party services from the perspective of the Hospitality Operator, too. This month Fast Casual argued the case against delivery – citing high costs (delivery services typically charge 20-30% of the check) as well as a number of other potential implications including:

  • An increase in complexity in terms of flow and fulfilment. If delivery orders and in-store orders peak at the same time, store customers may walk away or not even bother to come in, causing in-store sales to drop off.
  • Cost of losing business to competitors. A customer might pull up a third-party delivery app looking to order from your brand and get distracted by another equally enticing food item or offer from a competitor.
  • Separated from your customer. In third-party delivery set ups your customer becomes the delivery service customer, making it harder to build a relationship with them.
  • The numbers don’t stack up for franchisees. In today’s market, franchisees are lucky to hit a 7% margin. Asking them to take a 20-30% delivery fee cut of each ticket is likely to result in a lot of unhappy partners – as well as affecting how many new franchisees you are able to onboard.

 Mobile payments are flying in China

This month it was announced that as of October 2017, China’s mobile payments totalled 12.77 trillion US dollars – the largest volume in the world and a 40% increase on the previous years’ figures.

Unlike the rest of the world where digital wallets are slower to take hold, both due to a lack of familiarity and habit change resistance, Chinese consumers are leapfrogging over card payments and opting straight for mobile payments. And quite rightly. “Mobile payments make it possible to order food, pay credit card bills, manage stock accounts at anytime, anywhere, or buy a pancake at a roadside breakfast stall without having to carry a wallet” says Xinhuanet.

Although digital wallet uptake is slower outside of China, digital payments in general – whether through card or mobile – are rising globally, with 54% of Hospitality consumers expecting to personally use less cash in the next five years. This is good news for Hospitality Operators, as less cash and more digital transactions comes with a host of benefits and opportunities for restaurant managers – from a safer and cleaner floor space, to integration into revenue-boosting self-service technology.

More and more Baby Boomers are opting to use Hospitality technology

According to new research conducted by the National Restaurant Association (NRA), 56% of consumers aged 45-56 have recently used technology options in restaurants, with 40% saying they would use an in-store touch-screen terminal to place orders if available.

Other interesting stats include:

  • Four in ten Baby Boomers have ordered food or looked up menus on a computer in the past month
  • One in three has looked up restaurant locations on a smartphone
  • One in ten has ordered takeout or delivery, looked up nutritional information, or made a reservation via a smartphone or tablet app

The results suggest Baby Boomers may be more willing to transition to mobile ordering and customer self-service technology than previously thought – and restaurants would do well not to focus their marketing efforts entirely on the Millenial and Generation Z consumer groups.

Panera Bread enhances the guest experience with self-service tech and reaps the benefits

The $1.3 billion sandwich chain Panera Bread has reported that it is now fulfilling 3.1 million orders a week via its digital platform; 30% of which are paid for digitally, of which 75% are through mobile.

The chain’s mobile strategy has grown the restaurant’s loyalty base to 30 million – the largest in the F&B sector – and with it has come a wealth of data that is unlocking a “customer-centric ecosystem” and changing the guest experience for the better says CEO, Blaine Hurst.

Panera’s customer self-service technology, which includes in-store kiosks and an order ahead mobile app, are not only improving the guest experience but boosting sales too.

For customers who choose to order and pay via kiosk, their frequency (to visit Panera) is up 12% after 12 months, and for those that opt to use both kiosk and order ahead app it is up 45% over the same time period.