Restaurant Machine Learning: Viability and Sales Prediction
Artificial intelligence (AI) and machine learning (ML) have gained a strong foothold across different industries due to their ability to streamline operations, save costs, and reduce human error. Machine learning has reshaped sectors like healthcare, finance, and retail, and the restaurant industry is no exception.
Many restaurants have already leveraged the power of AI and ML. From kiosks that analyze buying patterns to create offers to chatbots that manage reservations, take orders, and respond to queries, restaurant operators have found a multitude of uses for AI and ML.
But the applications of AI and ML aren’t restricted to restaurant management and customer service — they can also generate revenue. Based on existing data, you can adjust your ordering decisions and modify your workflow. With this in mind, here are some ways in which machine learning can make sales forecasting more impactful.
The Effect of the Weather
According to research data obtained by Forbes, the weather has a direct impact on the customer’s perception of the restaurant experience. No matter how impeccable your food and service are, inclement weather can still result in bad reviews.
With machine learning, you’ll be able to predict sales based on the weather conditions and past sales performance, allowing you to adjust accordingly. Say you sold more soup-based dishes on rainy days last year. An ML-powered forecasting platform can point you to previous data and inform you of the menu items that sold more, along with the weather conditions at the time. It also tells you if you can expect a surge or decline in customers. This way, managers will have the information to schedule the staff that can accommodate the projected number of customers per shift.
Reducing Food Waste
Reducing food waste in your restaurant doesn’t only save you money; it helps in preserving the environment, too. A study conducted by the World Resources Institute found that for each dollar a restaurant invests in food waste reduction solutions, they save $7.
Machine learning can reconcile past sales data and weather conditions to calculate how much inventory you need to meet consumer demand. If you’re able only to buy what you need, inventory management eliminates the risk of overspending on goods, thereby reducing food waste and overhead costs.
The Impact of Holidays and Events
There’s a massive misconception that holidays and significant events result in a spike in profits. Unfortunately, this phenomenon doesn’t apply to every restaurant. While many experience a surge in sales during certain holidays, there are some, primarily upscale establishments, that see a decline in revenue by up to 60 percent as per data curated by the Houston Chronicle.
You can mitigate your losses by relying on AI to project your sales, inventory, and staffing needs during seasonal holidays and significant events. Instead of relying on your gut to make assumptions, AI and ML can pull from your past sales data and yield accurate predictions as to how much food and beverage and the number of staffing you’ll need to accommodate demand.
The Potential of Marketing and Promotions
Promotions and special offers are often used by restaurants to drive foot traffic and increase sales. But not all promotional ideas work. Even if you have an idea that shows great promise, you can’t guarantee that it will benefit your restaurant.
To understand if your promotion is worth pursuing, you can rely on data supplied by AI and ML. ML-powered platforms will take into account your customer’s buying behavior to predict whether your consumers would be receptive to your initiative or not. You’ll get to save money if (per predictions) your efforts would be futile.
Restaurant Machine Learning and Beyond
Restaurant operators shouldn’t discount the power of AI and ML in reaping sales insights, especially in conjunction with their existing restaurant technology. By adopting forecasting and predictive modeling, you’ll be able to plan better, boost efficiency, and open your business to more opportunities for success.
How has the pandemic altered your course? Click the link below for our page containing helpful restaurant resources for the COVID-19 outbreak.
About the Author
Alice Tyler is an aspiring writer who currently works as a social media manager for a food delivery startup. Her interests lie in modern technology, AI, and discovering how technology can continue to innovate the way the food industry operates.