The Big Picture
An informed speculator's thoughts on what the future holds for restaurants and how best to leverage data
Straight off the bat, let’s reiterate the obvious—The future is…
Technology!
In an industry where 60% of new entrants fail within the first year and nearly 80% don’t survive long enough to celebrate their fifth anniversary, it was inevitable that a data-centric approach would be the impetus that VC’s needed to step in and revitalise things. In the past few months, that’s exactly what we’ve witnessed. The most glaring example of this is the advent and subsequent meteoric success of Cloud kitchens.
Offering lower capital investments; there’s virtually no money spent on decor, you don’t need to shell out the bucks for a prime location or train a large serving staff for a food production facility where a plethora of restaurants rent space to prepare dishes from their delivery-optimised menus, as well as a sizeable advantage in terms of scalability, Cloud kitchens are indeed the hottest topic in food tech.
Traditional restaurants aren’t going anywhere either. Dining is inherently experiential and cooking is an art. While we cannot ignore the industrialisation of the sector with fast-food chains, the fine dining, family dining and experiential dining establishments are simply irreplaceable. You can’t digitise feelings.
In light of this, we thought it would be best to look at some of the aspects that have resulted in the success of data-driven concepts such Cloud kitchens, but more importantly, how they should be applied to improve your current establishment (whatever form of eatery it may be):
Experimentation, Creativity & Taste
Whether you’re a tech-savvy ghost kitchen or a quintessential diner, your common and most important asset at the end of the day is your food. How do you differentiate your menu items from those of your competitors? Flavour and presentation are the two obvious answers that come to mind. In this cut throat business, there’s no time for trial and error any more. Use data analytics, surveys and polls to find out what your patrons like best, and do it quick! Experiment with your recipes, packaging and more but make sure you’re incorporating customer feedback at a rapid pace, otherwise you’re bound to get left behind.
Innovative Data & Digitisation
The best possible explanation of this concept is elucidated by Forbes, via their Council Post on Cloud kitchens:
The only way to get customers for a cloud kitchen is through the use of technology. You must know the unit economics of your partnership with the delivery apps. You need to pay more attention to what customers like and what they don't like. Customer ratings and reviews decide where you'll rank on a delivery app, which consequently decides how many customers you will get.
Potentially, if you want to convert these third-party customers to direct customers and save the commission, you need to have an app and a website of your own.
It is easier to optimise a cloud kitchen business compared to traditional restaurants due to easier access to data. For example, you can predict what items will be in higher demand around what time and start some preparation in advance for faster delivery times. There are various services — such as ItsaCheckmate, Deliverect and Omnivore — that integrate all major third-party platforms directly to your point-of-sale systems. Analytics, marketing channels and mobile apps are essential parts of a cloud kitchen business.
We’d recommend applying Vikram Joshi’s advice to your physical, dine-in establishments as well. This, along with the insights from our Digitise or Die blog post could form the blueprint for your future with technology.
Restaurant-friendly Terms of Service
When it comes to the future of the restaurant business, our thoughts align with those of our comrades over at Superfood. Food will follow retail in its future trajectory, and the success of food entrepreneurs will ultimately boil down to how well they use and protect their data. Here’s a snapshot from their detailed case study:
The ideal restaurant data policy will incorporate the following features:
Terms are publicly accessible and easily readable? (i.e., English not corpus juris)
Restaurants own their order data (what was ordered? when?) and co-own customer data (who ordered it?)
Restaurants should be able to use/share/monetise the order data as they see fit
Platforms can use restaurant data for a narrowly defined set of purposes
And these are the questions that restaurants need to ask of their tech-savvy partners:
Do I own and have access to my order data and analytics? What is included in that data set? (eg., what was ordered, when it was ordered etc.)
Do I own and have access to my customers’ contact information (telephone, address, profile, email, etc.)?
Do you need my consent to share my data with a third party?
Are there any restrictions on how I use the data shared with me?
Do you have to delete my data upon my request?
Cover image from https://blogs.3ds.com/perspectives/sustainability-series-op-ed-the-food-tech-revolution/
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Please reach out to aman@dashin.in for any feedback or clarifications regarding the content of this article.