Restaurant News Roundup: December 2018
As we stepped into the new year, we looked at everything that happened in the restaurant industry in December 2018. Last month’s news includes 2019 technology predictions, pizza company mergers, mobile payment platforms, and the reasons restaurants are losing guests. This platter of news was too good to leave in 2018.
US Restaurants Face Tough 2019
Overall, restaurant chains dealt with many challenges in 2018, and many predict that 2019 will bring more. According to a Bloomberg report, rising food and labor costs could delay plans to expand and hurt profits. International companies are not going to be able to avoid that pain and will need to plan accordingly. For example, Starbucks has already announced plans to close some locations in the United States. Since delivery is still an ever-present trend in the industry, restaurants will be focusing on investing in technology that supports delivery.
Another challenge of delivery is that restaurants have to share their earnings with the delivery service that they utilize, thus making it harder to gain a profit from the mobile or online customers. An issue that will move into 2019 will be the data collected by restaurant chains from delivery services; this data can be used for ads to create return customers for the restaurant. Want more facts and figures concerning issues restaurants could face in 2019?
Pizza Hut Makes One of Its Biggest Acquisitions Ever
Pizza Hut announced that it acquired QuikOrder on December 4, allowing improvements to the company’s ability to deliver. The restaurant reported that about half of its sales in the United States came through QuikOrder’s platform. The acquisition of the two companies will include the current digital ordering platforms of Pizza Hut and the in-restaurant technology of QuikOrder, along with future products and programming. This deal is occurring during the digital race in the pizza industry. A key competitor, Domino’s, is making progress towards the goal of becoming a 100 percent digital experience. Meanwhile, Pizza Hut is going through a $130 million transition that is moving slowly but surely. In Q3, Pizza Hut’s sales barely moved 1 percent internationally and dropped 1 percent in the United States.
According to Artie Starrs, president of Pizza Hut U.S., challenges to focus on would be dine-in assets and lack of general delivery awareness. He also states that there is going to be a comparable change in the U.S. when it comes to performance. Want other insights about this deal between Pizza Hut and QuikOrder? Check out this article.
Another Way Restaurants are Losing Guests
When it comes to technology, it can be a huge pain point for restaurants. Or, if implemented correctly, technology can help ease pain points that restaurants face. Another interesting dilemma is payment technology. Customers are still dining out at a steady pace. TSYS conducted a study that found that 75% of those that responded to the survey eat out at least once a week, and 42 percent eat out three times a week. For those diners that eat out more than twice a week, 46 percent still prefer to swipe their card, while 41 percent prefer to insert their chip payment. Only 3 percent prefer to pay with their phone, which is an indicator that restaurant operators should not make a massive investment in solely mobile payment options.
The two most essential capabilities according to consumers are secure payments and processing and the speed of the transaction when paying. Where are the opportunities? Customers still desire advanced payment options. Sixty-nine percent of people prefer restaurants to have a pay-at-the-table option. Millennials are the customers that are most likely to choose this payment option if offered. Keep in mind, that if you’re trying out new payment methods make sure that the experience is well-tested and easy to use. One bad experience can affect a restaurant’s reputation. Check out more benefits of payment technologies here.
Why Mobile Payment Is Crucial for Guest Experience
Payment methods have evolved with technology. Over 35 percent of Americans use an Android device; thus more consumers are starting to use mobile wallets for their payment methods on the go. However, mobile payment options are not offered or accepted in most stores. A lot of stores want to create and maintain customer loyalty through physical cards. For consumers, mobile payment options provide a seamless customer experience that links customers’ forms of payment, gift cards, and reward programs. Stores that have implemented mobile payment options have seen an increase of 64-percent in offer redemption and a 15-percent increase in loyalty card engagement. Mobile payment platforms can also create customized targeted messaging based on previous transactions and behaviors.
These options can create a seamless guest experience and allows for merchants to keep customers engaged and maintain their loyalty. Mobile payment platform options are becoming more common, but there are still security issues that are a concern to customers. Read more about how merchants can enable mobile payment platforms.
3 Restaurant Tech Predictions for 2019
Technology is quickly becoming a force in the restaurant industry. What’s on the horizon for 2019? Apps, drones, and automation. Restaurant operators are seriously considering turning to automation due to labor pressures rising. Minimum wage is also on the rise, according to this article, so expect to see more robots and self-service machines as restaurant staff.
In the third-party delivery space, leaders need to figure out what would make them stand out among the competition. How can they stand out? Delivery through drones could be the answer. Allegedly, Uber is making progress in the drone delivery system world with UberExpress that may be operational by 2021 according to the Wall Street Journal.
When it comes to customer loyalty, apps can assist with driving brand buzz. Companies such as Starbucks and McDonald’s have begun to promote in-app promotions this year. Other companies are also providing limited time options strictly when someone uses the app for delivery. Brands are starting to use their apps and third-party apps to drive visits through loyalty initiatives and ridesharing incentives.
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About the Author
Devyn Nance is the Marketing Coordinator at QSR Automations. She graduated from the University of Louisville with a bachelor’s degree in Communication and from Loyola University Chicago with a master’s degree in Global Strategic Communication. She considers herself an (amateur) profiler – trained solely from watching every episode of Criminal Minds. Outside of work, Devyn loves to shop, travel, hang out with friends and family, read, and watch shows on various streaming platforms.