Trends for 2019: The Hospitality/Food/Beverage Industry
Digital devices will be at the heart of many of the changes affecting the hospitality industry this year.
As 2019 dawns, prognosticators of all stripes are making their predictions about what they expect to see in the new year. For the restaurant industry, many of the trends we’ll see revolve around the use of technology to improve the guest experience, control costs and benefit the bottom line. Others revolve around new ways of serving guests, and the strong growth seen by one popular format in recent years is expected to continue.
Here are nine of the top trends restaurant operators expect to see in the next 12 months:
- Doing more with data – Operators are pulling data from all sorts of places, including their point-of-sale, accounting systems, digital menu boards and inventory and scheduling applications. The challenge becomes how to interpret that information to optimize operations. Developments in software and computing power are giving operators the analytical tools to gain business intelligence and boost profits.
- Increasing automation – Everything from order-taking to kitchen maintenance has become a candidate for automation. Research by ordering solutions provider Tillster found that 54 percent of restaurant customers expected to place an order via a kiosk in 2019, and that 60 percent of customers would visit a restaurant more often if self-order technology was available. On the other end of the spectrum, California burger chain Caliburger recently debuted Flippy, a $100,000 robot that flips burgers..
- Fast casual remains popular – The fast-casual format will continue the healthy growth rates the segment has seen over the past decade. A forecast by industry research firm Technomic predicts the fast-casual segment will grow 8.3 percent this year, up slightly compared with 8 percent in 2019.
- Ghost restaurants – These restaurants don’t have storefronts that seat customers, only a kitchen that prepares takeout orders placed online. This lowers overhead and in big enough kitchens, multiple restaurants can operate in the same space. Partnerships with food delivery services such as GrubHub helps make the concept feasible.
- The non-restaurant restaurant – Retail spaces have been adding restaurants to improve foot traffic, and the trend appears to be on the rise. Capital One Bank, for example, is installing cafes to reverse declining traffic in too-large bank spaces, while Crate & Barrel is planning a restaurant in a Chicago store. AT&T is even piloting a 3000-square-foot space in Seattle with a café, cellphone store and lounge seating. Next-gen theatres like iPic, Silverspot, Alamo Drafthouse, and Cinepolis are delivering real food to luxury seats in an effort to encourage more people to take in a show.
- Mobile order and pay continues its rapid growth – Operators are working the kinks out of mobile ordering, addressing the logjams that hampered early efforts. Some companies, including Starbucks, weren’t prepared for the crush of customers mobile ordering brought and implemented redesigns to accommodate the increased business. The fixes apparently worked, and as of 3Q18 mobile order and pay made up 13 percent of transactions at U.S restaurants, up from 9 percent the same period in 2017.
- Augmented Reality – Taking a cue from the Pokemon Go craze of a few years ago, restaurants are incorporating augmented reality to appeal to customers’ appetites. This new form of technology will allow customers to have a visual experience while being served in restaurants. AR allows customers to use their phones or restaurant iPads to view 3-D renderings of menu items, giving customers not only an image of the food, but the ability to view it as if it was right in front of them.
- Labor costs and retention rates continue to rise and burden restaurant operators –Turnover rates in the restaurant industry have always been high, and they’re on the rise. The average turnover rate in 2016 was nearly 73 percent in 2016, according to National Restaurant Association statistics, up from 56.4 percent in 2010. Some operators are seeing rates in excess of 200 percent. According to Restaurant Insider, it costs $3500 to hire and train a new hourly employee. On top of that, 42 percent of front-of-house employees leave within the first three months and 43 percent of managers leave within a year, making retention a source of significant lossts.
- Mobile training platforms – Today’s restaurant workers were raised in front of a screen, and mobile devices are an integral part of their daily lives. To meet these digital natives where they live (and address hiring and retention challenges in the process), many restaurant operators are turning to mobile devices to train staff. One solution they’re adopting is INCITE 5.0, a mobile training platform developed by technology firm Multimedia Plus. INCITE allows retailers to deliver video-based training materials via tablets or mobile devices without streaming, whenever and wherever employees have free time. Proprietary analytics tools spotlight areas of improvement needed for employees or groups of employees and identify opportunities to reward.
There’s no doubt that Americans love eating out. A 2018 Zagat survey found that Americans dine out an average 4.9 times per week. But with competition in the industry remaining fierce, nearly anything operators can to do control costs and improve operations can be a benefit. It’s a safe bet that many of the trends we expect to see this year will be coming to a restaurant in your neighborhood. Happy dining!