As the adoption of restaurant technology persists in every facet of the restaurant industry, from cafes to fast casual restaurants, it’s imperative that restaurant owners understand not only which technology trends restaurateurs are gravitating towards, but why.
Rather than make some educated guesses, the team at Toast surveyed hundreds of restaurateurs in the industry. Who better than restaurant owners, managers, and servers - the people using technology day in and day out - to answer this question?
The result? The Restaurant Technology in 2015 Industry Report.
We polled over 300 managers, servers, owners, bartenders, and chefs about their experiences using technology, located in various locations in the U.S. and with varying years of business experience. We are able to segment the data based on their answers to a few key questions. A quick run-down of the polled:
What is your role?
How would you categorize your restaurant?
How many locations does your restaurant have?
The top three challenges restaurants are facing today are: hiring and training staff, speed to sale, and low profit margin. Finally, restaurant owners know that simply “filling a position” is not the goal; the goal is to fill that position with the right person who embodies the values of your restaurant, and creating a culture that emphasizes training and retaining restaurant staff. This is an overwhelmingly universal and human challenge that restaurants face. Technology can serve as a tool to train your staff, and can help out with speed to sale, low profit margin, and many of the other challenges on this list, but the culture of your restaurant comes from you.
Based on our research, most restaurants -- across the board, including catering, full-service, quick-service, and even catering companies-- are using POS software in 2015. These are amazing, and honestly surprising results. These numbers indicate that more and more restaurants are seeing the benefits of restaurant POS software, and more and more technology vendors are communicating that benefit clearly. The only outlier here were food trucks. The food truck operators who answered this survey had an almost equal distribution of responses: 38% POS software, 31% pen and paper, and 31% cash register.
Advanced functionality was the clear winner in this case; restaurants want more features to be able to streamline their operations. As most of them are already operating on POS software, they know what it’s capable of, and are itching for more. However, it’s interesting that ease of use is number two. With modern POS systems offering online ordering, gift cards and loyalty programs, and enterprise management, there are so many features to use, but they must be usable. Restaurants know that simple, easy to use restaurant software will perform the best. Mid-size restaurants, however, have different pain points, most likely due to their giant customer base and growing pains. They want more integrations and better support to handle all their enterprise locations.
Restaurateurs chose "efficiency" as most important for restaurant technology. They want their software to be efficient, but they also want their software to increase efficiency at their restaurant. This makes sense, as restaurant operators want their technology to work, and work well. It should be so efficient that it acts as an extension of the restaurant, rather than a totally separate system. Customizability is the second most important factor for restaurateurs. That way, pizzerias, cafes, bakeries, full-service, and quick-service restaurants can customize their technology to fit their specific workflows. The most surprising item here is that “security” is so low on this list of priorities. However, when segmenting for “restaurant owners,” it is more important, which makes sense as they are most sensitive to security breaches.
We asked this question because we wanted to know how restaurants prefer to have updates to their software and hardware communicated. While many restaurants said they would prefer to hear about updates “in person,” most answered with “email.” This is interesting data for point-of-sale vendors who are wondering how to communicate updates about the software. Email is the best form of communication, mostly because it’s universal and it can be easily forwarded to others. However, one person in “other” wrote in an answer that wasn’t considered; notifications within the hardware itself. This would be an even more streamlined way to learn about updates to your technology, that technology vendors should consider!
Most restaurant operators look at their business reports every day, either through their technology or through their Excel spreadsheets. Almost half of the industry has a pulse on how their restaurant is operating every day, and interestingly enough, restaurant operators with POS software are even more prone to check their reports every day, at 50%. Nightclub and bar operators may look at these reports less because of the nature of their business; they have even more uneven sales throughout the week, with Friday and Saturday bringing in most sales, and Sunday through Wednesday being typically lighter, or even closed. Mid-size restaurants as well do not look at business reports every day, but instead every month. This may be because they are tracking monthly goals rather than daily sales, and that it's more difficult to check in to multiple locations every single day.
Half of the restaurant industry is currently paying for 2-5 technology vendors. Let's take some time to let that sink in... That's a lot of money spent on a POS system, online ordering vendor, loyalty program, etc., that isn't all integrated into one system. Restaurants may want to evaluate the cost of these systems as well as their ROI in the coming year. Large restaurants, however, are mostly paying for one technology vendor, and for that reason seem to have more custom-built systems for their workflow. It should be interesting to see how this number changes next year.
A large portion of restaurant owners are looking to upgrade their technology within the year. However, a similarly large portion are not looking to upgrade, for reasons such as cost and training. One person said that “to change systems would be like hiring an entirely new staff.” However, most restaurant operators not using restaurant technology currently are looking to upgrade. That means more restaurants using restaurant technology within the next year overall, which will be an interesting trend to watch within the coming year.
What is the #1 feature restaurants want and need? Inventory management. In this question, we asked restaurateurs to rank these top features from 1-10. Overwhelmingly, the consensus was that restaurants want to be able to engineer their menu based on their food cost percentage, variance, and other factors. They want to be able to know whether they're paying too much for an item that isn't very profitable, or whether they should order more hamburgers because they're so popular. Online ordering and PCI compliance, features focused on customer convenience and security respectively, were #2 and #3 in our poll. EMV compliance, however, ranked last, either because restaurant operators think their chances of fraud are low, or because they're simply not thinking about it yet.
Two main findings stand out: half of restaurateurs are currently paying for 2-5 technology systems, and more than half of restaurateurs need "advanced functionality" and "ease of use" in order to upgrade. 73% are planning to upgrade within the year.
Restaurant technology adoption is a growing trend among restaurateurs. As more and more embrace software and hardware in their restaurant, there will be more restaurant trends to track.
That's why we'll be producing this report every year, tracking variance across restaurant operators' answers. Subscribe to our blog for future updates.
In 2016, think about where your restaurant fits in. Are you considering new restaurant technology? If so, fill out the form below to learn about Toast.