Restaurant Tech Ecosystem 2019: Setting the Table
As has been the case for a couple of years now, technology solutions within the restaurant and hospitality industry have evolved at such a fast pace it’s hard for even those who work in the space to keep up. In order to help operators visualize the myriad of distinct and overlapping capabilities across the restaurant technology ecosystem, Better Food Ventures released its 2019 Restaurant Tech EcoSystem map.
In collaboration with TechTable, this landscape is an extension of Better Food Ventures’ inaugural state-of-the-restaurant industry report in 2018, and highlights some of key shifts across the industry in 2019, emerging themes and trends, and industry predictions for 2020. By no means is this an exhaustive listing.
Notable Themes
Digitizing the Back of House
In looking at the updated 2019 map, versus the 2018 edition, one thing sure stands out: There has been a notable shift toward a growing number of solutions focused on back-of-house operations and systems (versus guest-facing solutions).
Up until recently, the restaurant tech market was primarily pushing out guest-facing tech solutions, however as operators increasingly embrace digitalization of their business, we are seeing improved opportunities (and business models!) to optimize operations via actionable, data-driven insights and services.
We are encouraged by the continued push towards smarter B2B solutions that are helping restaurant and hospitality partners to increase efficiencies and more broadly, helping to combat the myriad of issues currently cannibalizing margins.
Expansion of Mobile Opening Up New Categories
We have seen the proliferation of mobile technology create significant change to the ordering, payments, and guest communications landscape. We are seeing new crops of technologies focused on more efficient line busting, pre-ordering, payments, location-based marketing, to name a few. Frictionless URLs, and the resurgence of QR codes / NFC tags are enabling customers to check-in for orders placed outside the venue (to send the order to the kitchen), or if the customer is at the table to place an order from the table.
White Label Loyalty and CRM Well-Positioned for Growth
As detailed in the 2019 Food Tech State of the Industry Report, we’ve increasingly seen a myriad of issues cannibalizing operators’ margins, including rising rents and labor costs, as well as the onslaught of third-party ordering/delivery services.
Related to that last point – the leading third-party partners seem to be increasingly setting their sights on owning the customer’s entire journey. Grubhub’s recent launch of a loyalty program supports this thesis.
Thus, within a relatively short time, due to the ease, variety and scale offered via marketplace apps, we have seen the customer’s loyalty/purchase journey transform, bifurcating to either: 1) direct ordering from the restaurant (online or in-person), or 2) loyalty to the many ordering/delivery platforms.
Because of these considerable tensions, operators are going to need to invest in more ways to uphold their own brand and funnel customers into more profitable channels.
Emerging Trends for 2020
In taking a step back to think about the coming year, we’d like to highlight the emerging restaurant tech categories with a higher number of younger companies, where we are seeing increased momentum and innovation:
Voice/Bots
Used for phone ordering, drive-thrus, search & discovery, brand marketing, and even back of house tasks like taking bar inventory
New On-Premise Ordering/
Payments Tech
Including kiosks, facial recognition, mobile-driven ordering/payments, cashier-less checkout
Managing and Minimizing Food Waste
Ranging from back-of-house kitchen waste management to a variety of food recovery solutions which range from “ugly produce” food procurement to matching leftover prepared food to consumers and food kitchens
Tech Focused on Increasing Customer Value
This concept straddles a number of categories (and was alluded to above in the discussion on new CRM/loyalty tech). Examples include employing smarter marketing, using personalization to drive increased order value, or simply minimizing 3rd party fees via white label solutions.
As is the case each year on this exciting journey, we continue to be encouraged by the massive potential and power of thoughtful technology solutions in this sector.
The restaurant tech ecosystem will continue to change as the industry matures, and as such, we depend on the wisdom of the participants in the space. We welcome your thoughts and reactions and look forward to following this sector together in the coming years.