NEW YORK — A top-of-mind question surrounding technology in the retail space is whether automation is going to replace labor. However, tech experts noted at NRF 2023: Retail's Big Show that the customer journey still needs a human element.
"These are really exciting and challenging times in the restaurant space from a technology standpoint," said Ira Gleser, director, industry advisor at Microsoft, as he kicked off the NRF session, "Where is Restaurant Technology Headed in the Next Five Years?"
According to Gleser, the pandemic spurred the acceleration of digital transformation. Customers are owning the guest journey like never before, and restaurants are pivoting to meet the guests where they are — in fact, many have already pivoted.
He also pointed out that there is a need to expand the view of technology and look at the back of the house. Operators should be thinking about the role technology can play in improving efficiencies, taking friction out of the jobs of frontline workers, and how technology can empower team members.
Evolving the Customer Experience
While dine-in traffic has returned post-pandemic, it's not as simple as that, according to Bruce Hoffmeister, chief information officer at Cracker Barrel Old Country Store.
"It is easy to say traffic is back for dine-in, because it is, but it's much more complicated than that," he explained. "A lot of people don’t realize that pre-pandemic dine-in traffic across the industry was declining steadily year over year. It was going down about 2 percent a year and of course, it fell off the table during the pandemic. It is coming back up, but it is still not back to pre-pandemic, and what we are seeing is the pre-pandemic trend of a slow erosion of dine-in traffic continues because of all the off-premise opportunities that customers have."
The question now becomes: What's ahead?
"The consumer is driving the journey bus," said Gleser. "They are very clear on what they want, where they want it and how they want it."
Hoffmeister agrees. "In today's world, no matter what industry you are in, the guest wants more control than ever and we need to give it them," he said, adding that the challenge is not every guest is the same.
Technology-wise, restaurants can offer guests the ability to join a waitlist before they arrive, have tableside tablets for servers to enter orders, and offer customers the ability to pay without having to go to a cashier by scanning a QR code at their table.
"From my perspective, it's called Cracker Barrel Old Country Store, so we have to blend technology into the old country store in a way that fits well and feels like it's not alienating to some guests while empowering other guests," Hoffmeister said. "That's part of the balancing act we have to look at from a technology perspective. It's always a balance of blending high tech with high touch."
Chipotle Mexican Grill, the fast-casual restaurant chain, has been making moves around the digital experience as well. The brand launched its loyalty program right before the pandemic and was fortunate to have the delivery and loyalty infrastructure in place before the pandemic forced Chipotle to go digital only, shared Colin McGuire, vice president of corporate systems at Chipotle.
After some testing, the chain rolled out a contextual restaurant experience, "which essentially allows us to anticipate the intent of the customer using the mobile app; do things like message them if they are going to the wrong restaurant; [and] messaging as close to possible in real time when their meal is ready, when it is going to be put on the shelf, when they are making the meal," he said. "We are taking it to the next level of communication."
The next step, McGuire said, is to use the data customers have allowed Chipotle to capture to customize the experience even more. For example, the brand will not send a customer a beef promotion if they've never order beef.
Both Hoffmeister and McGuire are members of Microsoft's CIO Council.
The Impact of Takeout & Delivery Growth
With takeout and delivery increasing, some quick-service and fast-casual restaurants are looking at smaller footprints that reduce — or even eliminate — dine-in space.
How does the increase in digital orders impact the back of the house?
This past fall, Chipotle began piloting a cook-to-needs kitchen management system that uses camera technology to measure, among other things, ingredients on hand and cooking temperatures. "The intent is to always have availability of food and forecast sales that are coming so that we can tell the person on the grill they need to drop two pans of chicken because you are going to sell it in the next 45 minutes," McGuire said.
Chipotle developed the technology in collaboration with Microsoft. "The challenge becomes, is it the AI [artificial intelligence] and machine learning that runs the restaurant or is it the GM [general manager] and the grill person?" he posed.
"What we are finding is when they work well together, they work well together. But when the person on the grill ignores the suggestions of the AI, it doesn’t like that," McGuire explained. "There is a long way to go to get to that interaction between the human and the technology to really be seamless, but once we do, I think you are going to see this technology in a lot of our spaces."
At Cracker Barrel, forecasting is done by the hour using AI and comparing it against what the managers do, according to Hoffmeister, who echoes there are challenges.
"There are times when the manager knows something that the computer didn't know," he pointed out. "The computer does a very good job at recognizing patterns and doing things based upon information as long as there is no glitch in the system. That glitch in the system is what the manager needs to be aware of."
In the Next Five Years...
Asked to fill in the blank, "In the next five years, restaurants will," Hoffmeister answered "give more control to the guests and the customer on how they want to be served."
He noted that this is happening now, but said the evolution will continue.
Meanwhile, McGuire said in the next five years, restaurants are going to be using technology to make the industry a compelling place for people to work, especially in the quick-service restaurant space.
NRF 2023: Retail's Big Show was presented by the National Retail Federation (NRF) at the Javits Center in New York from Jan. 15-17.