HOW RESTAURANTS CAN WIN THE HUNGER GAMES - Serving up customer experiences that build loyalty and drive growth - Accenture
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HOW RESTAURANTS CAN WIN THE HUNGER GAMES Serving up customer experiences that build loyalty and drive growth Responsible Retail
In recent years, all types of restaurants, from casual dining to fast food, have worked hard to innovate to keep pace with changing dietary preferences and the ways customers are eating—but there is more to do. Today’s customers are increasingly looking for food that is good for them, the planet and the workforce. They are aware of the ingredients in their food and the sustainability of products used, and they care more about fair wages and schedules for the people serving the food. To remain relevant in this new era of responsibility, restaurants need to stay true to their purpose while delivering value to their customers, workforce, stakeholders and our planet. And while change is afoot, some things have stayed the same. People still want their food quickly, but more than ever they want it conveniently too. Restaurant digital orders have grown 23% annually (on average) since 2013 and will triple in volume by the end of 2020. Six out of 10 of these orders are placed on mobile apps.1 Restaurants are teaming with the likes of Uber Eats to get fresh meals to customers faster than ever, but without integration they could lose critical customer data. 2 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
THE FLUCTUATIONS AFFECTING In addition to dropping RESTAURANTS the “Donuts” from its name, Dunkin’ is rethinking its space, ARE GLOBAL adding customer-friendly features such as interior pickup In the United States, customer demand for restaurants is high, but it is more difficult to staff for to-go orders, a grab-and- restaurants as new labor laws take effect. Since 2010, average restaurant hourly wages have go retail section with fresh increased at a 2.9% CAGR.2 In the United Kingdom, massive overexpansion has led to the collapses of many well-regarded high street restaurant chains.3 fruit and packaged snacks, These pressures are forcing restaurants to rethink how they staff and use space. Occupancy and self-order kiosks. The costs can take up to 6 to 10% of a restaurant’s gross sales.1 That space can be downsized company’s new store format or used to greater advantage (see sidebar). measures 2,200 square feet Restaurants have largely been focused on customer volume: building check averages, increasing customer traffic and growing repeat business. Many have cut costs, but some and requires 25% less energy of these moves have had a negative impact on customer satisfaction. than its conventional units.1 Every aspect of the restaurant business is changing, and restaurants need to adapt while continuing to serve great food at compelling prices in a timely manner. It’s time to strike while the opportunity is hot. 3 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
SERVE UP INNOVATION Leaders will make bold moves to shape the restaurant of the future. The digital age presents a menu of choices for restaurants to pursue new growth opportunities, while strengthening their core business of making satisfying food for hungry customers. 4 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
AUTOMATION Automation can augment the work of humans in Server calls in sick? Automated scheduling can restaurants, saving costs and opening opportunities help restaurants save thousands per month in labor to add value to the customer experience in other costs and hours. Analytics can review a restaurant’s ways. Self-pay tablets are being rolled out at scale— historical scheduling data, then automatically schedule Work efficiently they’re in 8,000 eateries in the United States alone.4 employees based on their skill level and jobs they have performed in the past.6 In the kitchen, automation can reduce costs and get food to hungry customers faster. Boston’s Spyce Technology can also help employees to be safer when Kitchen uses a robotic chef to cook food on sensor- they are at work. For instance, PathSpot uses hands-free enabled woks, delivering a customized bowl to technology to scan employees’ hands to detect signs customers in less than three minutes. Even cleanup of pathogens that lead to foodborne illness.7 The cost is automated. Nearly half of restaurant operators of a single foodborne illness outbreak can range from surveyed (47%) believe robot cleaning would be $3,968 to $1.9 million for a fast-food restaurant and mainstream or in mass adoption by 2025.5 $8,030 to $2.2 million for a casual-dining restaurant.8 5 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
OPERATIONAL Food service operators can do more with data. For By sharing recipes and instructional videos with kitchen instance, analyzing data from loyalty programs and staff, they can create food in a consistent manner. IMPROVEMENT apps to understand what items customers want, when Bluetooth temperature sensors can wirelessly record they want it, why they want it and what offers would temperature readings so employees don’t have to, garner the strongest response. making food safety easier to control. Work smartly Starbucks revamped its loyalty program to offer tiered Restaurants equipped with real-time data about customer rewards, so customers have more options in how they purchases, inventory and customer feedback can be spend points, and rewards accumulate immediately, so more agile to respond to changing preferences and even infrequent customers have an incentive to join.9 shifting food trends. These changes tripled market capitalization between 2011 and 2017. Restaurants can implement artificial intelligence and machine learning technology in kitchens to reduce waste and save money, but also to ensure consistency, quality and safety. IKEA is using a smart scale solution as part of its effort to reduce 50% of its food waste by the end of fiscal year 2020. Since the food waste program’s inception, IKEA has saved more than 1.4 million kilos of food—the equivalent to more than 3 million meals.10 6 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
NEXT- Labor represents one of the largest costs in the Smart staffing will allow restaurants to meet their industry—and it’s on the rise. Some restaurants are labor needs and optimize the schedule while GENERATION reporting labor costs running as high as 40% of total adhering to labor laws. Supply and demand is always sales.11 The Hospitality and Food Service Wage Inflation changing in restaurants. On-demand platforms like STAFFING Survey in the US found 64% of restaurant operators Jobletics, Wonolo and Jitjatjo can track labor needs reduced employee hours, and 43% of operators and plug in scheduling holes with qualified talent.14 eliminated jobs because of labor cost increases.12 Both cuts can result in a poorer customer experience. Work leanly Restaurants must pay attention to the enormous fines that are coming soon if they do not comply to new complex labor laws, such as giving employees two weeks’ notice of their schedule. Solutions such as LIFELENZ13 have an analytics-driven labor scheduling tool to help operators automatically infuse the business rules into their labor schedules. They can use tools like this to be more responsible—meeting staffing needs while ensuring fair work schedules for employees. Restaurants can plan for the future through better workforce management. People need to be reskilled and retrained to work alongside technology, using innovative tools to process orders, manage inventory and more. Approaches like gamification can make learning fun and even spark a sense of competition among employees. 7 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
CONNECT WITH Convenience is often what brings customers in, but In addition to health goals, today’s customer has to keep them coming back and build loyalty, you need “life” goals. They want locally sourced food and they CUSTOMERS to truly understand them and tailor offerings and support companies that communicate a sense of experiences to their tastes, desires and preferences. purpose and behave responsibly towards the planet. The aforementioned Sweetgreen, which has a locally Restaurants can do this by acting on customer insight focused supply chain, showcases its local farmers on data. For instance, social listening might reveal that Work for your customers are hankering for a new menu item. Act fast in-store chalkboards as if they were celebrities. The company prides itself on local sourcing, sustainability, customer to test, tweak and either shelf or scale new concepts. transparency and animal welfare.17 Monitoring social media can also enable restaurants to respond quickly to poor reviews that can hurt your brand. Taking a stance on the environment, reducing waste and using sustainable ingredients will resonate with Restaurants are responding to “flexitarians” who want certain customer segments, especially in this era of more environmentally friendly and ethical meal choices. responsible retail. Businesses are thinking differently Hence, the industry has seen a surge in plant-based about how they set their business priorities and options, such as Burger King’s “Impossible Whopper.” operational plans, focusing on goals such as ethical A recent Herbalife Nutrition survey found that 71% of practices and sustainability. respondents are open to including more plant-based foods in their diet.15 Hyper-localization is yet another way to connect. A restaurant’s brand experience can be customized Other restaurants, such as American fast casual salad to local markets. For instance, McDonald’s is testing chain Sweetgreen, are connecting with customers by favorite menu items from around the world—including helping them to meet their health goals. They allow visitors McSpicy Chicken Sandwich from Hong Kong, Mighty to send their order’s calorie counts directly to Apple Angus Burger from Canada and Baci McFlurry from Health, which currently does not have a food database.16 Italy—at its flagship store in Chicago.18 8 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
TECHNOLOGY HAS TURNED THE TABLE Customer appetites will continue to change, and expectations will rise. However, technology has reached a maturity level Restaurants can begin to start embracing the opportunity for change by: that allows restaurants to respond to shifting demands better, and with greater agility. The opportunity to Fervently innovating. Innovation is no longer Supersizing relationships. Now that restaurants transform is rich, but it raises big questions: optional; it must become part of a restaurant’s DNA. need to rely on others more than ever to bring For instance, adopting an experimentation mindset technology, delivery and other in-demand capabilities, • What does your brand mean when a physical and agile operating models that can support testing the ecosystem is critical. Restaurants should be re- restaurant is meaningless? new ideas, failing fast and moving on—or adopting imagining ecosystem partnerships to drive cooperation • How does the brand-operator relationship change the winning concepts. rather than competition. For instance, creating on- when a franchisor’s most valuable asset is a tech premise digital experiences that will drive traffic to stack and not real estate? Rethinking big bets. Every dollar can make a locations and ensuring customer data is not lost when difference in the customer experience. However, third-party ordering is used. • How do you operate when the cost of labor right now, restaurants are over indexing on investing doubles overnight? in innovation inside restaurants. It’s time to think differently about where investments will move the needle most—delivery services, rapid menu innovation, personalization and automation. 9 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
The status quo has been reset and the race is on to create the restaurant of the future. Act now before the opportunity gets cold. 10 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
Contact the Authors References About Accenture ELIZABETH MARRION 1 “Mobile Apps Now Represent the Bulk of Restaurant Digital Orders and Restaurant Accenture is a leading global professional services company, Branded Apps Dominate;” The NPD Group; February 2019; https://www.npd.com/ Managing Director wps/portal/npd/us/news/press-releases/2019/mobile-apps-now-represent-the- providing a broad range of services and solutions in strategy, elizabeth.b.marrion@accenture.com bulk-of-restaurant-digital-orders-and-restaurant-branded-apps-dominate/ consulting, digital, technology and operations. Combining 2 Statista; US Bureau of Labour Statistics; CreditSuisse; Accenture Client Value Services. unmatched experience and specialized skills across more ROBERT RAIDT 3 “Jamie Oliver restaurant chain collapse costs 1,000 jobs,” BBC; May 2019; than 40 industries and all business functions — underpinned Managing Director https://www.bbc.com/news/business-48352026 by the world’s largest delivery network — Accenture works at robert.raidt@accenture.com 4 http://www.grubstreet.com/2018/07/restaurant-tablets-server-complaints.html the intersection of business and technology to help clients 5 “Restaurant 2025;” Oracle; https://www.oracle.com/webfolder/s/delivery_ improve their performance and create sustainable value for their production/docs/FY16h1/doc36/Restaurant-2025-Oracle-Hospitality.pdf MATT JEFFERS stakeholders. With 492,000 people serving clients in more than 6 “Inside the Rise of Restaurant Automation;” FSR Magazine; September 2018; Managing Director https://www.fsrmagazine.com/research/inside-rise-restaurant-automation 120 countries, Accenture drives innovation to improve the way matt.jeffers@JavelinGroup.com the world works and lives. Visit us at www.accenture.com. 7 https://www.pathspottech.com/home 8 Estimated Cost to a Restaurant of a Foodborne Illness Outbreak. JEN PRITCHARD 9 “The evolution of the Starbucks loyalty program;” National Restaurant News; April Managing Director 2019; https://www.nrn.com/quick-service/evolution-starbucks-loyalty-program j.pritchard@accenture.com 10 IKEA news release; February 2019; https://newsroom.inter.ikea.com/news/at-ikea- more-than-3-million-precious-meals-did-not-go-to-waste/s/04d3349d-50ce-4850- a600-8d6f26895450 MAUREEN BOSSI 11 “Restaurant Megatrends 2019: Labor Crunch Determines In-Restaurant Global Retail Research Co-Lead Changes;” Skift Table; January 2019; https://table.skift.com/2019/01/17/ maureen.e.bossi@accenture.com restaurants-megatrends-2019-labor-crunch-determines-in-restaurant-changes/ 12 “2019 Hospitality & Food ServiceWage Inflation Report;” Harri; JAY AMBURKAR https://content.harri.com/Research/Hospitality-Wage-Inflation-Survey-2019 Retail Innovation Lead, Southeast 13 “These Platforms Will Help You Manage Staffing with Uber-Efficiency;” FSR Magazine, October 2017; https://www.fsrmagazine.com/fsr/technology/ jayasree.amburkar@accenture.com these-platforms-will-help-you-manage-staffing-uber-efficiency 13 https://www.linkedin.com/company/lifelenz/about/ 14 “These Platforms Will Help You Manage Staffing with Uber-Efficiency;” Stay Connected FSR Magazine, October 2017; https://www.fsrmagazine.com/fsr/technology/ these-platforms-will-help-you-manage-staffing-uber-efficiency Copyright © 2019 Accenture. All rights reserved. 15 “The altruistic reasons more and more people are ditching meat;” The New York Accenture and its logo are trademarks of Accenture. Post; September 2019; https://nypost.com/2019/09/25/the-altruistic-reasons- @AccentureRetail more-and-more-people-are-ditching-meat/ This document makes descriptive reference to trademarks that 16 “Sweetgreen’s iOS app logs calories directly to Apple Health;” engadget; July 2017; https://www.engadget.com/2017/07/14/sweetgreen-ios-app-apple-health/?utm may be owned by others. The use of such trademarks herein is not 17 https://www.sweetgreen.com/food-ethos/ an assertion of ownership of such trademarks by Accenture and is 18 https://news.mcdonalds.com/stories/our-food-details/global-menu-mhq-april-2019 not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks. 11 HOW RESTAURANTS CAN WIN THE HUNGER GAMES
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