May 23, 2018

Part 1: Is Technology the Secret Ingredient to Success in the Hospitality Industry?

What do your customers look for when they eat out? Is it the food? The story behind the brand? Receiving meaningful service and having an opportunity to show genuine, human gratitude for it? A waiter swaying their order towards a personal favourite with a real interest in whether they share the same passion? Banter with the staff?

Whatever it be, it is hard to dispute that your people add the most value to the experiences of your customers; from the design and creation of food and beverages to the face-to-face service provided in the customer-facing roles.

If technology starts to take on the roles of people, however, could we be heading towards an era of less people-centred hospitality experiences?

Technology is a popular topic of conversation for our clients, and one that will only continue to gain momentum. We at Hospitality Mavericks believe that these are two major factors you must be aware of as an entrepreneur or leader when investing in new technology:

1- The implications for employees

2 - The implications for customers

This blog will therefore present a round-up of what customer-facing technology (CFT) could mean for your customer journey with reference to how it ties in to the experience of your employees also. This is because we at Hospitality Mavericks are strong believers that it difficult to talk about your customers experience without considering the employee implications also. Blog 2 will take a more employee-focused perspective, looking at the broader picture of how tech is going to influence your employees’ everyday work lives and productivity.

Also, the focus will be on customer-facing technology (CFT) in restaurants and cafes for the most part- even when mentioning the ‘hospitality industry’ or ‘hospitality sector’. This is because hotels have more complex CFT uses, processes and tech-reliant facilities used to engage their guests, of which do not resemble that of restaurants and cafes.

Are we tech savvy in the hospitality industry?

Ashighlighted by Michael article ‘The power of a digital workforce in restaurants’, when it comes to technology and innovation, the hospitality industry is typically late to the party.

There are a few factors that could be held accountable for its lagging adoption. One is the notoriously low margins within the sector; making investments in tech difficult to justify. As a rule of thumb it has been common for hospitality leaders to dive shortsightedly into the P&L accounts to save costs for survival when the going gets tough, as opposed to strategically looking for long-term opportunities, such as technology and innovation to boost business performance.

The hospitality sector is human-centred, whereby people deliver extraordinary experiences to those who are sacrificing their disposable income (and free time) for a good time.

Muller’s (1999) paper The business of restaurants: 2001 and beyond hits the nail on the head in this sense by stating that restaurants of the future will not only manufacturers of meals but retailers of time and customer experience.

For that reason, it is paramount that your organisation provides great service, especially when navigating through the ‘perfect storm’ which bears a range of challenges for organisations operating in hospitality, of which are identified in a previous blog entry of ours.

Customer-facing technology in hospitality

For decades, technology in the hospitality industry has been in the hands of you and your employees, not your customers. Technological innovations have enabled managers and business leaders to assess day to day operational performance their organisations through using readily available data via the cloud. Whilst PC-based point of sale (POS) systems have assisted hospitality staff in taking customer orders in a swift, mobile manner since the late 80s- shooting them to kitchen monitors in an instant. It is therefore in true hospitality fashion that 2013 was the year when customer-facing POS systems were introduced, enabling consumers to make payments quicker than ever.

In general, technology has an incalculable potential when it comes to productivity, efficiency, and consequently; its impact. That being said, is there a point of diminishing returns for the hospitality sector, where the efficiencies of incorporating CFT compromises your end customers’ experience?

According to the National Restaurant Association 2017, 45% of customers feel that technology makes restaurant visits overall more complicated.

It is therefore highly possible that the integration of CFT may become detrimental to other components of their experience also, such as building strong relationships with brands, getting to know the employees, and feeling a sense of ease and relaxation.

In fact, Oracle’s Restaurant 2025 report revealed that 40% of consumers said that being served by a robotic machine would feel invasive or strange.

Time and time again it has been highlighted that the interaction between customers and service providers may be harmed by self-service technology. Does this mean that hospitality businesses as a whole are heading to a more formulaic state? Probably not, but we think there is definitely something special that could be lost from these experiences. Especially if you decide to reduce a team of individuals who provide outstanding customer service.

On the flip side: benefits of CFT and how to utilise it

That being said, it must be acknowledged that CFT can be used to assist your workforce and not take them away from your customers. For example, it has been reported that a tabletop ordering system such as an iPad can be massively helpful in bridging the gap between high and low skilled waiters. Knowing the specifics of menus, navigating around handheld ordering systems and taking payments from customers can be eliminated, enabling your employees to add value in other parts of the operation such as greeting and seating customers or assisting back of house staff to maximise food quality. As a result, you will be key in redefining the roles within your organisation if you decide to adopt CFT. And it is crucial that you do this with the guest experience in mind.

In general, you should always frame the issue/opportunity that a new technology will be addressing. It should be kept in mind that a tech solution may not be necessary, optimal or even viable. There will be many instances where taking the right people-based approach will evoke a more favourable and timely result- as it is rare that the adoption of a new technology comes free of resistance and learning pains from both your employees and customers.

How to get implementation right

If a tech solution is necessary, consider how the new CFT will affect your team’s job roles, workforce structure and employees’ motivation. If the new CFT is going to require a redefinition of roles, it is essential that your employees know why this is necessary and what the desired outcomes are.

It is your managerial duty to be open to concerns that employees may have. For instance, some employees may have suspicions that the implementation of self-ordering technology in a restaurant may result in a reduction of tips, a rational concern if there will be less hospitable service opportunities. As a proactive manager, you should highlight where exceptional service could be provided in other areas of the operation, or even create new incentives that mitigate the financial burden. In the words of Simon Sinek:

“Happy employees ensure happy customers. And happy customers ensure happy shareholders- in that order”.

Hence, successful customer adoption is vulnerable to the willingness of your employees to embrace the new operational processes, as well as your understanding and anticipating the different responses that customers will have to the change.

Identify opportunities and communicate the ways that CFT can benefit the employee experience also. For instance, if you are a restaurant coping with maximum capacity on a regular basis, you may benefit from a CFT facility that gives meal delivery progress updates; a menial task that waiters in some busy establishments do on a regular basis.

Wahaca is an example company that has used CFT to relieve employees from having to take as many bill payments through the app Flypay. This enabled Wahaca to reduce participating customers’ payment times down to one minute (ten times faster than the industry average). It also means that customers can pay separately with ease and don’t lose sight of their debit/ credit cards; reducing the security risk associated with handing over your card.

Gauging appropriate adoption and the recipe for success

There are varying ways of predicting your customers’ reactions, and the more time you take to appropriately identify the possible scenarios, the lower the risk. A good place to start would be to take advantage of the digital age and see what academic and industry research can tell you about technology-customer relations. If you are an operator that is dealing with customers who have a high wait sensitivity, for example:

Gao and Su’s 2017research suggests self-ordering technology to be appropriate as it enables customers to play a greater part in a more efficient process.

Ensure you make selections that are relevant (i.e. studies applicable to your culture, sector and moment in time). This research, coupled with a deep understanding of your customer base will be invaluable when making any big tech decision. Overall, keep ‘a finger on the pulse’, as consumer trends are dynamic and difficult to pinpoint (especially when technology is thrown into the mix).

CFT poses both significant opportunities and threats to operators. Whilst customer experiences of the future will undoubtedly be subject to significant change, driven largely by technological, social and environmental factors.

Much of the success of CFT lies in ensuring you are adding value to the experience of your customers through a slick integration (that sticks) into your employees’ job. From the perspective of an operator, there are definitely productivity gains on offer; as long as the guest experience isn’t forgotten along the way. Remember that technology is just a tool and that in this people-centred sector it is your employees that have the power to bring real emotions to your customers.

Ifyou are thinking about adopting a new technology in your hospitality businesses, we at Hospitality Mavericks recommend that you ask yourself these 5 maverick-inspired questions:

  1. What is the opportunity/ issue that the technology will be addressing? And is there a people-based approach that may be better suited?
  2. What are the implications for my customers?
  3. What are the implications for my employees?
  4. How am I going to get my employees on board and effectively integratethe new technology into their job roles?
  5. How am I going to ensure that my customers are still made to feel special?

Similarly, if you would like to read more about technology in the hospitality industry, we at Hospitality Mavericks recommend The ultimate software guide for the modern restaurant posted recently by Trail .

And remember, as our friend Griff Holland said on our podcast:

“Hospitality is about how you make someone feel, a robot cant make someone feel, well, not yet anyway…”

Ollie is a Business and Management graduate from the University of Sussex and currently participating in a Project Management internship at Hospitality Mavericks. Ollie shares a deep passion for the industry and has worked in hospitality for over five years.