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 GAMESCONNECT 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 GAMESTECHNOLOGY 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 GAMESThe 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 GAMESContact 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.
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