Hospitality and retail – both are cutthroat industries where profit margins can be narrow, buyer habits unpredictable and success requires speed, quality and excellent customer service. However, where retail has been radically transformed by innovation since the turn of the millennium, shifting over to ecommerce and digital, restaurants have largely clung onto their traditional systems and culture.
Over this transition, the retail brands which have survived, and even flourished, have been those willing to pivot to not only introduce digital solutions, but adapt their business model to suit the new era of customer habits. Now, as hospitality is moving to widely embrace tech, retail’s history can provide valuable lessons – what to change and how to do it well to unlock the operational efficiencies, cost savings and seamless customer experiences that digital can enable.
Of all the tech to turn the world upside down in the last 50 years, the internet tops the charts. The likes of Amazon and Ebay totally changed the game for retail, with the dawn of the smartphone seeing consumers spending more time in digital spaces and getting used to instant access. In response, retailers have invested in crafting digital customer experiences as carefully as their physical ones, opening more convenient ordering channels such as click & collect, Amazon lockers and cheap home delivery – all enabled by tech. Purely digital businesses such as Made.com and ASOS have sidestepped the overheads of brick and mortar to great success.
Now, the same era of online is upon the restaurant industry. With takeaway on the rise and eating out in decline, home delivery is seeing wide adoption by casual and even fine dining outlets. This reflects shifting consumer habits, as eating becomes a more acceptable day-to-day option. As retail did first, foodservice must adapt to meet growing expectations for speed and convenience through grab and go offerings, using digital channels such as click and collect, in-store kiosks and home (or office) delivery for a quick, easy experience. These are no longer “nice to haves” but “need to haves”. Digital ordering has enabled new, digital-centric business models such as dark kitchens to develop, where restaurant businesses operate delivery-only, or supplement their traditional business with out-of-town kitchens, tackling the rising costs of rent.
Regardless of the quality of your goods, a negative in-store experience can be enough to turn a customer off your brand for good. Avoiding out of stock items is key to preventing this. Various technologies allow retailers to intelligently manage their inventory, such as RFID tracking which triggers a shelf restock when an item is scanned at checkout. Automating stock-checking processes not only reduces errors, but also saves precious human resources. This is equally true in the restaurant sector.
For restaurant operators, stock management technology is a powerful asset to prevent customer disappointments. Tools such as MarketMan automate inventory tracking and restocking, to reduce the risk of missing inventory. When stock does run out, an integrated digital ordering system allows you to update your menu instantly, hiding any out of stock items, to prevent customers from making orders that can’t be fulfilled. When you come to restock, data-led forecasting allows you to order with confidence.
Hospitality labour is a headache. It’s expensive and in short supply. Retail knows how you feel – also being labour-dependent, she has many of the same challenges. There is no panacea for labour pains (as mothers will know) but technology has enabled retail to manage staff admin better and increase your labour efficiency. We’ve all witnessed the self-checkout revolution in supermarkets, where now one staff member can oversee 10 or more customers checking out simultaneously. Walmart, Target and Schuh have equipped staff members with handheld devices allowing customers to pay where they are, removing the need to queue at checkout completely. Many retail operations use sensors in store to track customers and provide footfall data for forecasting – ensuring the right number of staff are on shift and serving customers at any one time.
In hospitality, we are seeing the dawn of similar digital solutions to the labour challenges – augmenting staff with technology for greater efficiency. Increasing levels of digital self-ordering, through kiosks or online platforms, takes labour away from staff, enabling better hosting experience. Labour management platforms such as Fourth automate labour-related admin and enable smarter forecasting of labour needs, so restaurants are less likely to be overstaffing quiet periods. These savings in time and efficiency can be lifesaving to a restaurant, especially during challenging times.
The modern consumer wants to feel special, and expects a personalised experience. While restaurants have continued to operate on loyalty stamp cards, or without a loyalty system altogether, retail have long been upping their CRM game. One of the key triggers for the automated marketing trend is digital ordering – as soon as ecommerce came into play, retailers started sending follow-up emails to customers inviting them to shop again or informing them of a new season’s releases. Supermarkets, drug stores and clothes retailers alike try to get you to sign up to their rewards system, or newsletter. By the time you get home, you’ve received a welcome email with what benefits this will bring you – maybe a 10% discount, or the ability to save up points and earn a free gift – and it’s shown to keep customers coming back.
With the dawn of widespread digital ordering in hospitality, loyalty and direct marketing is suddenly becoming the norm for casual dining. Restaurants are recognising the power of these digital customer relationships to prompt return visits, delight guests and build a loyal clientele. When customers are logging into a personal account to order from your restaurant, you can start to learn their preferences and help them find what they want to order through AI. Emailing a customer with a special offer on their birthday, or to inform them of a new menu item you think they’d like, can be a great way to boost footfall. A CRM management system like Airship lets you automate these processes, to get the value-add without a load of extra work.
All of the systems mentioned in this blog post are integrations of Vita Mojo. With our digital ordering system, and our best-in-class partners, you can unlock the digital potential of your foodservice business through labour, stock and customer relations management.