Preoday's 2020 trends forecast - The latest hospitality industry trends to digest - HubSpot
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Preoday’s
2020 trends
forecast
The latest hospitality
industry trends to digest
1 If you’re interested in finding out more, get in touch
“The turn of the year is a good opportunity to look both backwards and forwards at the industry. For example, at the beginning of 2019, we talked about growing loyalty through hyper- personalisation and the value of giving consumers choice rather than trying to control them. Now, with Millennials starting families and heading up household accounts, it becomes more important than ever to offer personalised service. In 2020, we’re looking at how data, both internal and external, can help with this. We’re also looking at other technologies like AI and kiosks which can help improve customer service further, as well as delivery, which is fundamentally changing the game for restaurants. Brexit notwithstanding, 2020 should be an exciting year for operators who want to use technology to grow.” Nick Hucker, CEO, Preoday 2 If you’re interested in finding out more, get in touch
2020 vision: Our top trends for the year Transparency............................................................. 4-5 Artificial Intelligence (AI)......................................... 6-7 Delivery......................................................................8-9 Kiosks...................................................................... 10-11 Data & Personalisation.........................................12-12 Sustainability..........................................................14-13 3 If you’re interested in finding out more, get in touch
Transparency
In 2020, the consumer demand for transparency will
continue to soar, affecting multiple industries, from
packaging and delivery to food service.
Tied close to their desire to consume sustainable or pesticides, a desire for super fresh food and,
food, customers want to know everything they importantly, to ensure they are avoiding allergens.
can about the products they’re eating. And, just as They want to know and understand what is going
mobile technologies have created an expectation into their products, which is why manufacturers are
for on-demand ordering and payments, they are producing food with shorter, less complex ingredient
now feeding a drive towards the provision of specific lists, and brands are reformulating their recipes.
food information. From where it was grown and who
by, to how it arrived at their plate, transparency will It was the horse meat scandal of 2013 which
be what’s needed to win the trust - and loyalty - of an most recently revealed a major breakdown in the
increasing number of consumers. traceability of the food supply chain and ignited
fears that harmful ingredients could have crept into
A 2016 Transparency ROI Study by Label Insight produce as well. The event was a pivotal moment in
found that 94 percent of survey respondents were the industry drive towards food transparency. The
likely to be loyal to a brand if it offered complete attitudes of retailers, in particular, had to change
transparency; 86 percent of millennial mothers said following the crisis; companies like Tesco began
they would pay more for completely transparent to provide information online about their meat
food products. There are a number of reasons why: product testing processes. From this point onwards,
a wish to protect the livelihood of local producers, transparency became commonly accepted as a
a hope to reduce their impact on climate change, mechanism for building trust among shoppers.
an aim to avoid foods containing GM ingredients
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It is because of other crises, climate change and Away from the contents of processed food,
numerous, preventable, allergy incidents, that technology platform, Provenance, is offering
technologies facilitating transparency are surging transparency by bringing the supply chain to the
in demand once again. In 2016 teenager, Natasha consumer. It uses blockchain technology (a verified
Ednan-Laperouse, suffered a fatal reaction due chain of transactions) to track, trace and tell the
to a poorly labelled baguette at Pret a Manger. user about the food they’re buying: is it produced
The case brought the question of ingredient and ethically? Sustainably? What are its origins? For
allergen management to the top of the news agenda those eating out, other technologies, like Evogro,
and led to the introduction of Natasha’s Law. The give total transparency by bringing the origins of the
legislation demands food businesses must include food in-house, growing food in vertical farming units
full ingredients labelling on their pre-packaged food and reducing the farm to plate journey to zero. And,
by mid-2021. working to prevent another horse meat scandal, is
consumer technology SciO. The handheld device
One company that is helping restaurants and scans objects and materials giving the user instant
food caterers tackle this aspect of transparency is information about their chemical makeup and
Kafoodle. Kafoodle makes software that allows food sending the data directly to their smartphone.
operators to deliver calorie and allergen information.
While Natasha’s Law doesn’t apply to digital and At its core, transparency is about the consumers
online ordering menus yet, it may do in the future; wanting to understand more about the products
both consumers and businesses should want to be they buy and consume. More than half of global
ahead of this change. consumers have said a brand or product’s story
influences their purchasing decision; the trend
It’s not just in Britain that the laws are changing to is about so much more than food labeling. Who
reflect a need for greater ingredient transparency. produces the food matters; they need to know this
In the USA for instance, the FDA is making it a if they are going to align themselves with a brand
requirement for food manufacturers to label how through their purchase. Those companies that can
much sugar in a product is naturally occurring and successfully increase transparency will be rewarded
how much is added in the form of sugar, syrup, with greater trust from customers in 2020. Those
honey, or concentrated fruit juice. No doubt, as the that can’t, might struggle to win new customers, or
UK continues to limit sugar content in products, keep existing ones.
similar changes will be made here.
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Artificial Intelligence
The term, Artificial Intelligence, has been around for
decades, but it’s only recently that people have understood
its meaning beyond the creation of space-age androids
such as the, rather cleverly named, Data, in Star Trek.
As its use, both in language and in technology has When voice ordering was first introduced with
increased, confidence in its potential has grown brands teaming up with Alexa back in 2017, uptake
in parallel. Companies are beginning to invest in was initially slow. In 2018 it was reported that just
its capabilities in order to enhance their customer 2 percent of users made purchases through their
service and increase staff productivity. While it still voice device. Now, two years on, KFC, Starbucks,
has a distance to go before it touches every element Grubhub and Domino’s have introduced the service
of the food service industry, in 2020 we would in select territories. In August of this year Chipotle
expect AI tools like chatbots, voice ordering and, joined them by announcing its plans to introduce
potentially, facial recognition to start taking off. an AI voice ordering system to all of its US stores
by the end of the year. It’s a big move considering
Chatbots are already being used by businesses only 33 percent of US consumers currently own
that have demonstrated their penchant for voice-activated devices such as Amazon Echo or
trendsetting. Dominos, for instance, was one of the Google Home smart speakers. Its potential market
first companies to launch a bot service. Customers penetration remains smaller than online or mobile
value speaking to a real person, but it’s not always ordering, and will be for some time yet. Still, for
possible and it’s easy to grow frustrated waiting for those operators whose customers love a hands free
a human response. With chatbots it’s easy to do customer service experience with almost no follow
anything from booking a table, to getting answers to up, 2020 is a year in which decisions about a voice
questions about a venue, and it can all be processed ordering investment might be made.
much faster than through a human server. They
help restaurants improve efficiency and guide the
customer journey, end-to-end.
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With both chatbots and voice ordering, demographic In 2020, we’ll begin to see chatbots emerging
information such as age and gender can be as a standard for customer service among large
quickly gathered during the conversation without restaurant chains and voice ordering begin to make
the customer realising they’re communicating it. a mark, but beyond 2020, AI won’t just be about
This real-time data can be used by the AI to finely customer service. Payments will also undergo an AI
tune recommendations to the customer during the transformation.
time of engagement, unlocking a higher levels of
personalisation. Through voice, even emotion and
user sentiment can be detected and input as data.
A partner’s perspective: Paymentsense
“2020 is the year of liberation of payments. Restaurants will be able
to access technology that can turn any smartphone or device into a
payment terminal. This means that paying for the bill will become a
seamless experience for consumers and restaurant staff alike.”
Some brands have already begun exploring While not all of these applications will become
payments through facial recognition (powered by mainstream in 2020, most will see a marked
AI). Last year, CaliBurger in the USA introduced increase in investment from large restaurant
face-based recognition technology for customers operators. And, once they’ve proven the market,
to log in to their loyalty accounts and order their and the technology has been made scalable and
food. In China, following a number of experiments cost-effective, middle size and innovative brands
since 2017, shoppers have begun purchasing may follow suit. No matter the application, data will
from online retailers using the technology. If the form an essential role in this growth. It’s the fuel
movement expands out from there it could cement which drives it. To unlock that potential, integrating
China, with its warm embrace for fresh mobile with data-collecting technologies that have open
internet technology, as a reliable testing ground for and flexible APIs is vital. Such integrations enable AI
applications and services with global potential. software to create value in the context of real-time
business operations.
The potential for AI is limitless. There are some
that believe it can even take on the role of chefs
and bartenders; by feeding big data into an AI
platform, it can create and put exciting new recipes
into practice. It will be used within a kitchen
setting, monitoring equipment to extend its life and
preventing food waste.
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Profitable delivery
Delivery is perhaps the most natural partner of digital
ordering that there is. In 2020 it will continue on its
upwards trajectory, creating new opportunities for
innovative technologies and services to enter the market.
Companies like UberEATS and Deliveroo have According to the NPD Group, the UK foodservice
disrupted the market, but managing everything delivery market will reach £6.3bn by 2021; delivery
under one roof has failed, so far, to prove profitable. spend in 2018 rose £1.35bn compared to 2015.
The entry of multiple players, coming together Meanwhile, MCA’s Foodservice Delivery Report in
to form separate, expert, pieces of the delivery 2018 said food delivery contributed to 8 percent
ecosystem is an opportunity to affect that reality. of the foodservice market and that 60 percent of
UK adults order, on average, twice each month. We
At Preoday we bring together experts across the could quote market statistics for pages and pages,
delivery market, and have formed relationships, but in a nutshell, the delivery market is growing and
from delivery logistics and management businesses becoming an increasingly important part of the larger
to foodservice equipment companies supplying foodservice industry. This is especially important
heated travel boxes. Together with digital ordering, in a time when, because of economic uncertainty,
these businesses are helping more operators offer a consumers feel more comfortable ordering food for
step-up in convenience and find a profitable delivery takeaway or delivery, than heading out to eat at a
solution for the time starved modern consumer. restaurant.
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One area of growth for delivery is hardware. While improved transportation methods is one key to
The hiring and management of delivery staff is greater profitability, it isn’t the only trigger for market
expensive, as is well documented. To counter growth. Dark Kitchens (also known as Cloud, Virtual,
this, companies have been experimenting with Commissary and Ghost kitchens), are on the rise and
alternative delivery methods, i.e drones. It might are dependent on having a delivery function. These
sound too futuristic for 2020, and given the need outlets minimise outgoings through a combination
for UK government approval, it may well be. Further of advanced food preparation, fewer staff and cheap
afield things are moving faster. In Ireland, startup rental spaces, keeping costs low and margins high.
company, Manna is actively seeking regulatory Indeed, Kitchen United, believes dark kitchens have
approval from the Irish Aviation Authority to allow cut its labour costs by as much as 80 percent.
it to begin rolling out its own aviation grade drones
in the Republic. Meanwhile, food service business, Despite there being few statistics suggesting the
Ele.me, has approval for drone delivery in Shanghai, size of this relatively young market, or predicting
and in Australia, Google has approval to fly its Wing its growth curve, one recent report suggested the
Aviation delivery robots. Should drones or robots market could reach USD 2.63 billion by 2026. In a
receive approval in the UK, the expectation is that world where the overheads associated with running
they will eventually cut costs for businesses, as well a bricks and mortar restaurant continue to rise, it is
as delivery times. perhaps unsurprising that restaurant investors are
moving their money into alternative, delivery-only,
There’s a good reason delivery has traditionally been ventures.
focused around pizza, curry and noodles. Foods,
such as burgers and chips are considered difficult to Online ordering and food delivery, in its entirety,
transport while maintaining the correct temperature, represents one of the most powerful drivers of
and without disturbing the quality and texture of the consumer behaviour today: convenience. Whether
goods. If this problem could be solved, the range of it’s in retail and e-commerce or online ordering
foods available for delivery would increase and the and delivery, it’s that yearning for immediacy
market expand further. It’s why, in 2020, we will see that is entering every arena of our lives. As new
more technologies designed to improve the process technologies, with better features come onto the
of transportation. Hotbox Food is one of these. market, the potential for delivery revenue to cross
Its box features hot air to keep the food heated at into greater realms of profitability, grows. Preoday
a steady 85°C, and steam free technology which is primed and ready to connect the partners every
takes moisture away from the box and preserves the company needs to capitalise on this in 2020.
texture of the food for 40 minutes. Seeking to solve
the problem, but coming at it from a different angle,
is Lamb Weston. It has created ‘CrispyCoat Fries’,
a chip product it claims has exceptional delivery
characteristics, maintaining ‘crispiness’ up to 30
minutes when using a Crispy on Delivery cup.
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Kiosks
Kiosks offer much the same benefit as online and mobile
ordering, the major difference is in their position within the
physical buyer journey.
With a mobile app, most orders are placed before All differences aside, the benefits of mobile
a customer reaches their preferred food/drink ordering are reflected in kiosks. In fact, many savvy
destination, ready for collection upon arrival - or restaurants, like Chilango, Burrito Mama - and
arranged for delivery. Kiosks, on the other hand, McDonald’s, employ and profit from the use of
are used once a person is on-site. They don’t put both. With both, operators can be smart about what
users ahead of the queue, i.e the customer can’t menu items to showcase, adding modifiers and
dictate a time for when their food should be ready, playing with item position to upsell or cross-sell with
but integrated into the restaurant’s EPOS systems, greater ease. They are equally shown to increase
they prevent traffic leading up to the tills from getting the average basket size, improve order accuracy
backlogged. and streamline customer service; they appeal to
tech-savvy consumers and, when managed properly,
The screen size and technology of kiosks makes improve the efficiency of operations.
customisation much easier. If a customer wants a
salad with chicken, extra dressing, no tomatoes, it’s
simple to make that selection on a kiosk screen.
Menus can be browsed and adapted at closer-range,
without needing to strain eyes reading the menu
behind the cashier.
10 If you’re interested in finding out more, get in touch Back to contentsA partner’s perspective: Omnico
“New challenges mean new opportunities in catering. In 2020,
fast food will help set smaller high street eateries ahead of the
competition. Self-checkout systems will allow people to take
their food away quicker; pre-ordering apps on smartphones
will eliminate the need to queue, and self-service kiosks will
give control - and time - back to the customer.”
That kiosks will be one of the biggest trends of 2020 One of the biggest fans of order-ahead kiosks
could be surprising if you think back to customer is McDonald’s. Along with mobile ordering and
opinion before this year. In 2018, a poll conducted delivery, in 2017, the company pitched self-ordering
by MSN suggested that diners weren’t bowled over kiosks as a key part of its Global Growth Plan. Since
by the concept of self-ordering kiosks: 78 percent of then it has reported seeing a 5 percent revenue hike
those questioned said they would be less inclined at its US restaurants which received a ‘significant
to go to a restaurant that used them. Sentiment overhaul’. Fast-forward and, as of 2020, self-ordering
since then has clearly changed; research this year kiosks will be installed at all North American
from Tillster showed that a quarter of restaurant McDonald’s locations. That’s quite a statement for
customers have used a self-ordering kiosk at a any company to make, especially one that has been
restaurant in the three months prior, a figure up 7 at the head of the trend for digital ordering.
percent year-over-year. Tillster’s research goes on
to predict that the self-order kiosk market will reach Companies in competition with McDonald’s will be
$30.8 billion by 2024. exploring a move into kiosks, if they haven’t already,
while small businesses and those in different
Further research in the USA explored the markets will be watching closely to decide whether
demographics of kiosk use and found it to be a it’s right for them in the medium to long-term.
Millennial trend there: 26% of people under 34, and
16% of people over that age said they want to pay at
self-service kiosks or on mobile devices.
11 If you’re interested in finding out more, get in touch Back to contentsData and personalisation
Someone wise once said “knowledge is power” and for
businesses nowadays that knowledge comes from data, the data
they gather about themselves, as well as from external sources.
Digital technologies are key tools to give companies This sort of personalised service will become more
access to more detailed information about important and frequent from 2020 and operators
themselves and their customers than ever before. need to truly understand their customers. Much
For example, by looking at the analytics linked to a has already been made of Millennials’ love of
mobile ordering service or EPOS, operators can see personalised service, and Millennials are growing up.
which products are popular at what times, who their Within the next six years, 80 percent of Millennials
most loyal customers are and what their favourite will be parents, in charge of the household accounts
meals are in granular detail, at a customer segment and looking for ways to make their busy lives easier
level, as well as overall trends. with kids in tow. Menu innovation and pricing may
also become more important to younger Gen Z
Digital technology and data can help operators consumers. Food companies will have to quickly
provide a personalised experience for customers, develop individual strategies to reach specific
in some instances by combining both internal and subgroups of each generation. Understanding the
external data. In March 2019, McDonald’s announced data that operators have at their fingertips is key to
its $300 million-dollar acquisition of Dynamic Yield, making personalisation a reality and next year we’ll
a startup focused on creating data and personal see more companies investing in technology to help
preferences-based algorithms that drive purchasing them decipher the data they have available and also
decisions. McDonald’s is now using Dynamic Yield’s implement it in a meaningful way.
technology to personalise recommendations for
customers at its drive-thrus across the US based on
data like weather, the time of day and popular menu
items. By the end of the year the company plans
to have the technology active at nearly every US
location with an outdoor digital menu board.
12 If you’re interested in finding out more, get in touch Back to contentsAs well as a more bespoke service and offering, from data can help improve all parts of the business,
the same data and insight can also help create a from restaurant policies and menus to marketing
more consistent experience across all locations campaigns and staff training. In terms of stock
within a chain. By understanding how they work control, looking at products can help companies
best, and creating a standard across the company, focus their efforts on dishes which generate the best
operators can ensure that menu items are available profit. By looking at each dish’s contribution to the
everywhere and described in the same way, that bottom line businesses can spot which ones are not
there is a standard customer interaction and that working, which ones are making the most money
customers get their food within a similar timeframe. and which ones they should push more. Equally,
data can help restaurants to identify which type of
Above and beyond improving customer experience, customers are making them the most or least money,
truly understanding business data can help enabling them to adapt their business strategy in a
operators transform their bottom line. Insight gained more profitable direction.
A partner’s perspective: Centegra
“Next year is going to be all about consolidating the numerous
physical and digital sales streams / channels that are now essential
for operators. We see this consolidation being important not only for
the live reporting of sales, but also in to the stores themselves for
kitchen management and production systems onsite.”
According to the National Restaurant Association, their profiles, this doesn’t make up for the fact that
“Data is king. Restaurants will see new opportunities they insert themselves between businesses and their
to apply data analytics to predict and capitalise on customers. Some operators have publicly sworn off
consumer demand and optimise supply economics.” using delivery platforms. After all, he who owns the
customer data, owns the relationship. In 2020 we’ll
It is therefore critical that restaurants retain access see more investment from operators in their own
to their customer data and don’t surrender it to data and in technologies that will help them mine it.
third parties, who will use it instead of them. Many We may also see more of a move away from third
restaurant operators still use third parties like Just party platforms, or at least an increasingly hybrid
Eat or Deliveroo, but there is a growing recognition approach of using a third party to attract customers
of the limitations of these platforms. Although they and then migrating them onto a proprietary app or
provide marketing support, helping businesses raise online ordering service.
13 If you’re interested in finding out more, get in touch Back to contentsReal sustainability
The sustainability movement has been growing in influence over
the past few years and it is stronger than ever.
According to the National Restaurant Association’s Spring, based at Somerset House in Aldwych, has
‘Restaurant Industry 2030’, “Sustainability isn’t just a stopped using cling film and plastic straws within
buzzword. It’s an important way to drive costs down the restaurant and has also asked its suppliers to
as well as showcase the industry’s efforts to attract deliver food in reusable packaging to cut takeaway
and serve the growing number of guests who are waste. Elsewhere in the world, an Indian restaurant
interested in everything about sustainability”. It is in Victoria, Australia, has introduced stainless
propelled along by consumers who want to know steel food boxes, mostly used as tiffins in India, for
more about the environmental impact of the food delivering food to their customers.
they’re eating, as well leave less of an environmental
footprint in their actions. Here are three ways that we anticipate businesses
will move towards a more sustainable ethos in 2020:
According to Technomic’s Generational report, 27
percent of consumers say they are more likely to Be transparent about the origins
visit restaurants that are trying to be sustainable.
This trend is slightly more obvious in younger
of food
generations, with 31 percent of millennials and 32
As we’ve already addressed in this report,
percent of Gen Z advocating the importance of
transparency of ingredients is becoming increasingly
sustainability in restaurants. Sustainability isn’t just
important to consumers, whether for health, or
a food trend, it has the potential to fundamentally
ethical reasons. In an effort to be ultra-local, some
disrupt the entire food chain, from creating the food,
restaurants are growing their own produce where
to operations in restaurants, to packaging it for “off-
possible and this is something that most could do
premise” eating.
on a limited scale, for example herbs, which can be
grown in vertical cabinets. We expect restaurants to
The idea of a sustainable restaurant is something
give more information about the origins of their food
that some restaurants are using as an opportunity
and may even look to change their supply chain so
to set their brand apart. London restaurant
that it is more sustainable.
14 If you’re interested in finding out more, get in touch Back to contentsOperate in a sustainable way Invest in environmentally-friendly
packaging (both in-store and for
Technology can assist waste reduction in a very real
way. Food wastage from the hospitality and food
delivery)
service sector costs the UK around £2.5 billion each
year. Moreover, 75 percent of the food not recycled Single-use plastic has come under the spotlight this
is avoidable, according to circular economy and past year as the bogeyman of the restaurant trade.
resource efficiency experts WRAP. For example, According to the World Health Organization, 50% of
digital ordering technologies can play a part by the plastic we use on an everyday basis is single-use
helping caterers and operators better manage stock or disposable. In 2018, the WHO started, “catalysing
control and ensure that as little food as possible is governments, industry, communities and individuals
wasted in preparation and once diners have finished. to ... combat plastic pollution and explore sustainable
alternatives”, saying ”we urgently need to reduce
The emergence of clever tech such as smart bins the production and excessive use of plastic, in
has helped chefs become more aware of what they particular… single-use…”
discard and produce less waste, which is good
news for companies’ bottom lines, as well as the In response, reusable cups, and takeaway cutlery
environment. Smart kitchen technology providers made out of sustainable and innovative materials
like Winnow have started to prove popular with have come to the fore and become popular with
operators, singing its praises. The technology itself consumers. Even the recycling of paper cups has
involves a scale that weighs food waste bins and gone up. Starbucks told the APPG on the Prevention
a touchscreen where kitchen staff can log what of Plastic Waste that over the last two years, the
is being thrown away. The analytics can then be UK has gone from one in 400 paper cups being
reviewed to take into account the menu and to recycled, to one in 25, an enormous improvement
make kitchens run more efficiently. We expect to see and the trend will just keep on growing. According
further companies like this emerge in 2020 and for to foodinstitute.com, “Sustainability became more
restaurant operators to make more use of them. than just a fad in 2019 as some restaurants and
consumers moved away from single-use items
towards more eco-conscious alternatives. Upcoming
efforts will call for more reusable cup programs,
portion controlling dispensers, strawless lids, smaller
napkins and wood-fiber utensils.”
Sustainability represents an opportunity for
restaurants to look at all their suppliers and
processes and make them future-proof. In 2020 we’ll
see more technology and businesses emerging to
help operators do this.
15 If you’re interested in finding out more, get in touch Back to contentsAbout Preoday
Preoday builds high-quality e-commerce platforms offering
mobile and online ordering services. We enable hospitality
businesses to offer branded digital pre-ordering facilities to
customers purchasing food, drink and merchandise.
Preoday provides a white-label service to companies Want to know more?
across the hospitality industry, from quick service
restaurants and cafes, to theatres and stadiums. Check our Resources page regularly to access fresh
We work directly with hospitality businesses and and useful content. Let us know if there is a topic
partners including resellers, ticketing agencies, you’d like to know more about, which we haven’t
technology providers and food tech start-ups. already addressed. To ask us a question, arrange
a demo or get a quote for your project, fill in our
Reasons for choosing Preoday contact form and a member of our team will be in
touch very shortly.
• Never pay excessive costs. Avoid up to 14%
commission on every order placed through For more information, visit preoday.com
aggregator service like Just Eat. Preoday is 0%
commission
• Acquire new customers and make existing ones
more loyal
• Reinforce your brand identity
• Gain complete access to customer data (often
withheld by aggregator services)
• Have total control over customer service
including delivery deals and menu creation
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