Resistant to the inevitable: How technology is changing the restaurant industry

Technology touches every facet of our lives – as it always has – but with the emergence of mobile devices and cloud computing making more of an impact than ever, you’d be hard-pressed to go anywhere and not find a high-tech piece of hardware or software around. These advances have made an impact everywhere, and one of the places we’re seeing more and more technology is in the food and restaurant industry.

Between the arrival of mobile devices on the table, online reservations, social media, and new payment methods, technology has infiltrated the food and restaurant industry like never before. Some of the advances will serve to improve the experience — both for the industry and for the patron. Yet with every new advance comes a new challenge, and with technology moving faster these challenges can seem insurmountable. It’s how the industry deals with these advances — and the challenges that accompany them — that will determine the fate of many restaurants, regardless of what’s on the menu.

High-tech help

There have been a variety of iPad mounts for the kitchen available for our homes for some time, but now we’re seeing them invade the kitchens and dining areas of restaurants. According to a recent article in the USA Today, restaurants in San Francisco, Atlanta, Boston, Chicago, and in other parts of the United States are starting to allow patrons to use iPads to place their orders. While this may be a welcome sign for the industry as a whole (which, according to the piece, has been flat due to the economic downturn since 2007), it might not work out so well for the servers who are displaced by a tablet. Payroll is one of the largest controllable expenses in the industry, and keeping it as low as possible can have a huge impact on a restaurant’s bottom line.

Chris Vickers has several years’ experience as a server in a variety of restaurant settings. While he waits tables to pay the bills (he’s an up-and-coming actor — yes, the stereotype isn’t lost here), he says that using a device to act in place of a real person in that manner isn’t necessarily the best option.

“When people are going to to eat, they are looking for a human experience. They like that someone is taking the time to cater to their needs.”

Vickers goes on to say that while using iPads as menus may be passable in some of the “middle of the road” restaurants, they just aren’t suitable for those that specialize in fine dining.

“Human interaction is very important,” Vickers says. “A machine can’t replace that. A good waiter brings what a machine can’t.”

Besides replacing menus (and possibly those who take your order from them), tablets have the potential to help hosts deal with incoming patrons who may have reservations. This can be accomplished through connecting the restaurant’s website to some form of online reservation system (using a service like OpenTable or a website extension like TableBoss or JS Restaurant) and then simply using the tablet as a means of checking out who is scheduled when. This allows the restaurant to maintain their computerized system (such as tone of the primary point-of-sale systems like Squirrel) on their main computers while the tablet is used for secondary tasks.

But the use of mobile devices isn’t limited to the serving side of things. They can be used to track inventory, regular checklists, and can go so far as to be used in a similar way we use in our own home kitchens – as a way to help out new kitchen workers get a handle on the restaurant’s menu items.

Still, with all of these potential benefits come the possibility of pitfalls.

Shellie Gudgeon is co-owner of Il Terrazzo, a fine Italian dining restaurant based in Victoria, British Columbia, Canada. She believes that there are certain aspects of the business that technology can’t do all that well – and can actually harm an establishment when it does fail. For example, bringing mobile tablets into her restaurant would be an exercise in futility — or failure.

“Our restaurant has a lot dead spots since it is housed in an older building,” Gudgeon says. “With the red brick walls throughout it’d be tough to adopt that sort of thing.”

But it has more to do with what Vickers has already said that is what will keep iPad menus off the table at Il Terrazzo.

“No way. Having a server is part of the experience. You can’t take that away.”

Again, mobile devices (and the Internet for that matter) come into play in a variety of ways, and what happens with them while in the customer’s hands both inside and outside the walls of a restaurant can have a huge impact on an establishment’s success.

The power of the crowd

Social networking sites have played a huge role in shaping the views of society on a myriad of issues, and they are also playing a role in shaping people’s opinions of dining establishments. With Foursquare, customers can leave their thoughts on a restaurant – good or bad – when they check-in. In fact, they can simply be in the area of the restaurant and do that. If a patron has an experience they want to share on Facebook or Twitter (again, good or bad), they can influence a lot of users with just one update. But that’s just the tip of the iceberg.

According to an article at DailyDealMedia, Yelp is perhaps the worst for a restaurant’s business:

“43 percent of restaurant owners polled said that Yelp, the restaurant review site was a problem because it basically gives customers carte blanche to say whatever they want about a restaurant and a lot of the reviews can be very damaging.”

In a city like Victoria, where tourism is one of the primary industries, tech-savvy patrons from out-of-town often refer to Yelp to choose where to eat. When looking at the Yelp reviews on Il Terrazzo, they generally fall between 4 and 5 stars, but a 2 star review is what caught my attention:

What caught my eye was that it was the sole 2 star review among a sea of 4 and 5 star ones. While this review wouldn’t keep me from eating at Il Terrazzo because of all of the excellent reviews by other users, it definitely stood out. And that could make a problem for many restaurants.

Gudgeon is a fan of sites like Yelp — but especially TripAdvisor — saying that it “drives business” to her door.

“(It) sends a powerful message and creates a huge awareness,” Gudgeon explains. “It assists our management in ensuring that everyone is treated well because everyone is equal. These kind of sites are a huge tool for restaurants and they really democratize the landscape.”

Gudgeon went on to cite the example of Ruth Reichl, the well-known food critic who would dress up in disguises when going to restaurants she’d be reviewing so that she’d be treated as a regular customer as opposed to getting superior treatment. Gudgeon says that because of sites like Yelp, TripAdvisor, and other social networks, restaurants have to be more vigilant than ever to make sure that “everyone is treated well”.

Another establishment that I researched on Yelp was my local coffee shop, Koffi. It has also offered a Groupon in the past, which was another site that the DailyDealMedia article stated was generally harmful to restaurants. I spoke with owner Michael Manhas about how services like Yelp and Groupon have impacted his small neighbourhood shop, and how these services haven’t really helped or harmed his business over the long-term.

“We’ve built up a core clientele, and those customers are more likely to let us know of problems (offline) instead of going online to do it,” Manhas explains.

(Manhas admittedly hasn’t spent much time looking at his Yelp reviews, but was glad when I mentioned them to him. He says he’s going to spend more time monitoring them going forward, as well as sites he has used before for rating restaurants like TripAdvisor.)

Koffi has run two coupon deals (with Groupon and Couvon) and Manhas isn’t convinced that they can show measurable results over the long-term, unless there’s additional technology in place to monitor customer loyalty. The coffee shop uses a paper stamp card to help build a rapport with its customers and switching to an electronic one “isn’t in the cards right now”, according to Manhas.

“That kind of stuff people just love seeing. I love the idea: less paper, less clutter. But our clientele want to see something more…physical.”

Groupon has seen its share of troubles lately, but electronic “couponing” isn’t going away. If anything, it’s gaining traction. With Apple joining the fray by including Passbook in iOS 6, the practice of scannable coupons is on the cusp of going mainstream. And that means more technology is coming to the food and restaurant industry because those establishments that don’t adopt it run the risk of being left behind by competitors that do.

Yet with the inclusion of more technology into the restaurant environment, there comes the challenge of training employees to use it.

Serving it right

When I was at Macworld | iWorld earlier this year, I went to Sightglass Coffee (which, incidentally, has a 4 star rating from Yelp) and it was the first time I had ever seen a Square payment portal in the wild. The transaction was seamless and didn’t seem at all out of place considering the environment I was in. I mean, I didn’t even think about the notion of having Square in a food and restaurant setting, and here it was. But in order to use the system, there has to be training in place to use the new technology — and also on how it integrates with the older technology.

“It could be a little costly, especially when it doesn’t work,” says Manhas. “You could be opening up a can of worms if you go into that.”

Vickers wasn’t so sure that servers need another option to deal with either, but can see it is inevitable.

“[I don’t think] it’s a problem for the servers so much as it is for the patrons,” Vickers explains. He offered the use of the newer portable PIN pad devices that are really no different from stationary ones as an example. “They throw people off because they aren’t expecting it and some of the American tourists we had didn’t know what do with them.”

Vickers discussed several more examples with me, including the security chip on major credit cards that can confuse those unfamiliar with them (or using them for the first time) and he thinks that adding another option could harm the overall dining experience.

We are still years away from this kind of payment really hitting the mainstream. In fact, during my years at Costco (in Canada) we didn’t even take anything but cash at the Food Court because the goal was to process as many orders as possible in the shortest time. Adding time to the transaction by using debit or credit cards wasn’t “on the menu”. Over the years I ran that department, I noticed an increasing number of members who were frustrated by our accepted payments (especially considering all of the point-of-sale terminals took both credit and debit cards). Speed of service was prioritized over convenience, but that’s not something a smaller business would be able to weather.

Just desserts

Technology has never been more intuitive than it is today, and it’s only getting better. It allows restaurant patrons to find restaurants, rate them, and decide where they want to spend their hard-earned money when they go out to eat. It allows restaurant owners to be more efficient and effective in the areas they feel can be streamlined by hardware and software. But if used in the wrong place and at the wrong time, it can do a restaurant great harm – as it can with any industry.

With a better understanding of the technology, the industry has better chance of thriving. And in tough times, those restaurants who are on the right side of the equation have a better chance of surviving.

Image Credit: Eric Feferberg/Getty Images