FitSmallBusiness Retail Analyst Meaghan Brophy On The Future of The Restaurant Industry
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FitSmallBusiness Retail Analyst Meaghan Brophy On The Future of The Restaurant Industry

Oct 02, 2020

This article is part of Raydiant’s Future of The Restaurant Industry series which interviews top experts on their perspective of technology and trends that are shaping the industry.

The following is an interview we had with Meaghan Brophy, Retail Analyst at FitSmallBusiness.

What are the top trends you see shaping the future of the restaurant industry in the next 3-5 years?

MB: 

Ghost kitchens: Online ordering was becoming increasingly popular before COVID. Operating a ghost kitchen, where you’re only open for takeout or online orders, has much smaller startup and maintenance costs than operating a traditional restaurant. Plus, you can even share commercial kitchens with other chefs, bringing the price down even further.

Farm to table: More consumers and therefore more restaurants are placing a focus on local, fresh ingredients. Some restaurants are even using ingredients from gardens that they manage on-site.

Mocktails: More and more members of the millennial Gen Z generations are choosing not to drink alcohol. Restaurants will need to get creative to make up for the profits that they typically generate from high-margin cocktails.

Contactless Dining: Though a few restaurants were going cashless before COVID, the pandemic is forcing all restaurants to move towards cashless operations. Investing in new POS and payments technology is pricey, so it’s likely that contactless payments, QR code menus, and scan-to-pay technology is here to stay.

What technology do you believe will have the biggest impact on the restaurant industry in the next 3-5 years? 

MB: 

QR Codes: I don’t know if anyone saw this coming, but QR codes are cool again. Digitized menus and scan-to-pay are here to stay. It’s a low-cost and easy-maintenance option for businesses that provide businesses with a lot more flexibility than paper menus or even self-service kiosks. Plus, it’s convenient for customers. Before COVID, kiosk-style ordering was taking off. Now, that self-service feature will be met through QR codes and scan-to-order and scan-to-pay.

Online Ordering: Of course, everyone is ordering online more than before. However, the shift and disruption will be around third-party ordering apps. Many of these apps take huge percentages, up to 30%, from each order. Restaurants already operate on razor-thin margins. In the current economic and pandemic climate where restaurants are relying on reduced capacity and more online ordering than ever, they simply cannot afford to take that big of a cut. We will see more customers and businesses boycott popular delivery apps in favor of in-house solutions that are more financially sustainable. This will become more prevalent as restaurant technology, particularly options for small businesses, become more affordable.

Order-ahead: Starbucks had this model down lightyears before the rest of the industry. However, we’ll see more and more restaurants and cafes (plus their customers) using online ordering for pickup. This is a natural evolution, as more restaurants are adding online ordering tools, and more people are becoming accustomed to ordering online.

What’s the future of restaurants?

MB:

Subscriptions: For restaurants with large customer bases and name recognition, or restaurants that offer unique cuisine or dining experiences, subscriptions can be a good way to expand revenue models outside of sit-down dining. This is especially true for businesses that aren’t a good fit for takeout or delivery. Meal kits and ingredients or wine subscriptions, if done well, can be an interesting way to keep and expand your customer base.

Local is King: People really care about their favorite local joints. The future of restaurants is small and local businesses, particularly those that know and understand the particular neighborhood that they operate in.

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