Explore the impact of AI on restaurants, simple methods to incorporate it into your business, and upcoming trends to keep an eye on.
When you think of artificial intelligence (AI), what comes to your mind? Runaway robots? Machines with brains? Will Smith in a beanie and leather jacket?
For many years, popular culture has led us to believe that we cannot control our own creations and that we will ultimately end up in a society that serves technology rather than the other way around. This has created false expectations and fears around gadgets, robots, and AI, which are grounded in fiction, not reality.
As AI and machine learning technologies continue to advance, it’s important to thoughtfully consider the consequences of these developments. New warnings emerge every day about robots replacing restaurant workers and permeating every aspect of the food service industry.
However, these claims are not only exaggerated but also impractical, as they make broad generalizations about all types of restaurants, from fast-casual to fast-food establishments.
So, the question remains: human or machine? The good news is that you don’t have to pick one or the other.
What Does AI Mean for Restaurants?
It’s time to update the age-old “man versus machine” adage to “human plus machine.” AI technology is a tool meant to assist your restaurant business, not to harm it.
By reframing the narrative around AI for restaurants, we can empower staff at all levels to make intelligent, well-informed decisions.
Understandably, the constant warnings about sudden, profound, and disruptive changes create anxiety for owners, managers, and staff in the food service industry. How can food service workers compete with technologies designed to outsmart them? Is the industry doomed as we know it?
The brief answer is no.
The detailed answer is provided below.
However, before delving into the specifics of how AI and machine learning have, can, and will impact the restaurant industry, let’s first define these terms.
Artificial intelligence, as the name suggests, refers to intelligence that doesn’t occur naturally. Instead, it is created or simulated to enable computer systems to replicate intelligent human behaviors. AI is static in that it can process but not react to real-world information. Your acquaintances Siri and Alexa? AI under a different guise. Chat GPT? Generated with the help of AI, a technology that’s getting quite close to taking my job as a writer, if not yours as a restaurateur.
On the other hand, machine learning takes things up a notch. This branch of computer science involves training computer systems to identify, anticipate, and respond to data patterns through complex statistical algorithms, using your customer data. Netflix, Spotify, YouTube… are just a few systems that learn, adapt, and serve up more of what you like in real-time.
Computer scientists are working tirelessly to make these highly technical pursuits accessible to the general public. We see evidence of this in various industries, including healthcare, finance, entertainment, and, increasingly, retail. From suggesting TV shows or books you might enjoy to predicting emergency room admissions and customizing workouts based on your body type, AI and machine learning are redefining how we live, work, and play.
And we’ve only scratched the surface. According to an article by Forbes earlier this year, it’s reported that:
- More than half of business owners use artificial intelligence for cybersecurity and fraud management.
- Nearly all (97%) business owners believe ChatGPT will benefit their business.
- One in three businesses plan to use ChatGPT to generate website content, while 44% plan to use ChatGPT for content creation in other languages.
- 61% of companies utilize AI to optimize emails, while 55% deploy AI for personalized services, such as product recommendations.
These figures look promising for corporate enterprises… but how do they apply to restaurant owners?
The appeal of AI becomes even more apparent when considering the current state of the food service industry. With data indicating that the restaurant industry experiences an average turnover of about 75%, a continuous stream of local labor law changes, and ongoing challenges in recruiting and retaining employees, the opportunity to harness technology to alleviate some of these difficulties (and expenses) certainly sounds appealing quite.
However, it seems that the issue is twofold.
First, discussions about AI in restaurants often focus on three things: robots, delivery bots, and chatbots. Yes, there are robots that can flip burgers.
In fact, at the National Restaurant Association Show 2023, we had the opportunity to sample a burger prepared by robots. The developers of this system, Aniai, view their new technology as a solution to the staffing shortage. While the robot cooks the burger, a human employee assembles the bun. It’s a collaborative effort that leads to efficient restaurant operations.
Also, Dexai Robotics has created a robotic sous chef named Albert, which can adjust to kitchens right out of the box. In Houston, customers can opt to have their pizza delivered by Nuro’s R2 robot on specific days and times when ordering from Domino’s. However , these are special cases, not the standard.
Another issue is assumptions: specifically, the idea that the average restaurant owner has the resources and willingness to delve deeply into AI or machine learning. The mentioned examples may save money and add value in the long term, although the return on investment is still largely undefined. Nevertheless, the short-term costs will remain unaffordable for the majority of restaurant owners until it becomes part of the standard restaurant model.
Nevertheless, this doesn’t mean that AI is completely out of reach for small- and medium-sized businesses in the restaurant industry. There are still ways to implement AI and machine learning in your restaurant. For instance, there are automation tools for back -of-house operations that regulate portion sizes, resulting in reduced food waste and over-pouring, while also providing inventory management counts to alert chefs when certain ingredients are running low.
How to Utilize AI in Restaurants
1. Get your restaurant listed
While on-demand ordering was once considered cutting-edge, customer service is now being further automated and streamlined.
Halla is a perfect example of an app that is challenging the current norm. The recommendation engine combines various food delivery apps to display relevant cafes and eateries based on a user’s location and established “taste profile.” Making sure your restaurant is accessible via these services maximizes your chances of being recommended as a “restaurant you might like.”
2. Keep up with your customers
Popmenu enables you to stay connected with your guests and deliver an excellent customer experience, even during busy periods. They provide an AI answering solution because a missed call translates to a missed transaction. This AI answering system captures all the information that your customers inquire about without interrupting your staff. Implementing AI technology is a practical way for small restaurants to make busy phone lines work for them, not against them. This is restaurant technology that can even be adopted by small restaurants, with pricing as low as $0.47 cents per hour .
Popmenu also offers dynamic menu item technology, which can make recommendations based on customers’ orders. For example, if a customer liked a particular special, when your restaurant reintroduces that item onto the menu, the customer can previously receive a notification, informing them that the item they liked is back in stock.
Millennials and especially Gen Z are much more likely to spend if they feel they are part of a two-way conversation. Utilizing tools that keep the lines of communication open not only fosters loyalty and affinity but also contributes to increased foot traffic and revenue.
3. Harness the power of big data
You may not realize it, but some of the software solutions you currently use – such as your employee scheduling software or point of sale system – contain valuable information that can help you operate your restaurant more efficiently. Your POS system can keep track of previous takeout orders and suggest the same order for future orders. This results in a quicker food ordering process, leading to an enhanced guest experience.
These systems effortlessly manage and monitor large volumes of data on a daily basis; some can even predict aspects such as labor requirements, customer behavior, food quality, and inventory levels, eliminating the guesswork when making decisions.
In the near future, these same applications will be able to use the data your restaurant generates to do things like create optimal employee work schedules or use your sales data to predict which items to promote and increase your profits.
4. Embrace voice search
With half of the US population using voice ordering and voice assistant features on a daily basis and approximately 40% preferring voice over smartphones for seeking information about a restaurant, if there is one AI trend to support, it’s voice commerce.
Restaurants can easily develop “skills” for platforms like Amazon Alexa that can help people instantly place orders without lifting a finger. For example, Grubhub has leveraged this technology to enable its users to place fast, hands-free orders.
The Future of AI for Restaurants
The bottom line for the majority of today’s restaurant owners regarding AI is this: don’t worry about it, but also don’t forget about it. If anything, view it as a helpful tool, not an adversary.
You should keep a close watch on AI and machine learning trends and breakthroughs, but don’t burden yourself trying to save up funds to afford a fleet of $50,000 self-serve kiosks like McDonalds. Let the early adopters do the groundwork, but remain aware of which technologies might serve you, your staff, and your customers in the future.
For now, your greatest success will come from focusing on learning from your in-store data and applying what you’ve learned to improve your and your team’s performance in various ways.
There is currently a fast-paced digital transformation in the restaurant and hospitality industries due to the widespread adoption of artificial intelligence (AI) in the consumer space. AI will have a significant impact on these industries, as businesses seek ways to streamline restaurant operations and customer interactions, expedite internal processes, and deliver a more efficient customer experience.
Incorporating AI into operations
AI, in various forms, will increasingly become an essential part of restaurant operations. More restaurants will incorporate AI capabilities such as predictive analytics for making staffing decisions, predicting demand, managing inventory, and improving overall efficiency. With valuable data-driven insights, predictive AI becomes a potent tool for restaurants to address labor shortages, anticipate customer needs, minimize food waste, and much more.
By utilizing AI-driven tools, businesses can also speed up the creation of high-quality content. These tools can produce compelling visuals for menus, marketing materials, and promotional emails, and generate written content for social media platforms. This empowers restaurants to maintain a consistent brand identity and appeal to their target audience. By leveraging AI, restaurants can save valuable time and resources in a competitive market and support their customer engagement efforts.
Personalized experiences will become increasingly common as restaurants adopt AI-driven systems to analyze customer data. For example, AI can delve into a customer’s ordering history; if the customer is a vegan, a personalized plant-based menu recommendation can be provided during their visit . This can be utilized to enhance customer loyalty and satisfaction.
Automation and customer interactions
Many integrated POS systems currently streamline and automate operations, and this level of automation will expand to customer interactions. Some fast-food restaurants have already introduced kiosks for convenient ordering, AI-powered phone answering, and even robotic servers.
AI-driven chatbots and virtual assistants have gained widespread acceptance, and this year, the industry will see conversational AI take a further step. With platforms like ChatGPT, restaurant operators now have access to all the specialized intelligence of their restaurant and can make this available to customers. This will significantly change the user experience. Human interactions with kiosks will become more mainstream, making the customer experience even more seamless and intuitive. Although there is no substitute for human interaction, expect to see additional automation in the front-of- house.
Immersive technological potential
The adoption of virtual reality (VR) and augmented reality (AR) technologies in the foodservice industry to create immersive experiences is still in its early stages but could have a transformative impact on how we enjoy dining.
These technologies are revolutionizing how customers engage with restaurants. During the pandemic, QR codes replaced physical menus, and now, restaurants can utilize AR applications to overlay interactive menu visuals, accessible with just a smartphone.
The recent introduction of Meta’s AI-powered smart glasses suggests that AR/VR could become even more integrated into the foodservice industry beyond the smartphone. While it is not yet widespread in dining establishments, pioneers have started using VR headsets to enhance the dining experience with multisensory elements. These experiences can transport diners to different settings or weave storytelling narratives alongside meals, adding an extra layer of entertainment to dining.
For now, AR is more likely to be used to provide real-time meal information such as ingredients, recipes, and nutritional details. Integrating these elements into restaurant concepts can provide customers with a highly distinctive and unique dining experience.
The future of AI for restaurants
The impact of AI on the restaurant and hospitality industry in 2024 will be extensive and transformative. From automating customer interactions to innovative, immersive experiences, businesses that strategically utilize AI will be well-positioned to thrive in this ever-changing landscape. While the restaurant of the future will be highly integrated with AI technology, the challenge lies in balancing this technology with human connection.
As technology continues to evolve, restaurants must remain adaptable to change. By implementing a flexible strategy that enables operators to incorporate new methods like automated staffing processes, the restaurant and hospitality sector will be better equipped to keep up with the rapid pace of innovation. The future looks promising.
As restaurant owners prepare for a busy spring and summer, technology such as AI can be beneficial in addressing some of the challenges they face. Labor shortages, inventory management, and improved efficiency are all issues that AI can assist operators in managing as they continue to build their bottom line.
Labour shortages
Currently, 62% of restaurants are experiencing a lack of staff, and 45% of operators require additional employees to meet customer demand. Technology has been helpful in addressing staff shortages, filling in labor gaps, and improving service efficiency.
Starbucks is utilizing technology through its Deep Brew initiative, which can predict staffing needs, create schedules, and automate tasks such as maintenance and inventory checks to minimize the impact of low staffing levels.
The use of AI to perform simple, automated tasks is helping restaurant operators meet customer demand, even during periods of low staffing.
Inventory management
In the context of sustainability and inflation concerns, AI can contribute to reducing waste and lowering costs. KFC and Taco Bell have implemented an AI system, Recommended Ordering, which predicts and suggests the appropriate inventory levels for each location on a weekly basis. This technology has led to reduced waste, saved labor, and lower costs for these establishments.
Inventory management is often a time-consuming task and susceptible to human error and inconsistencies. Automation can eliminate these challenges, making the process more straightforward and efficient.
Order taking
Efficiencies in the order-taking process can lead to cost savings, and AI has played a significant role in streamlining this aspect, from chatbots to automated ordering. Domino’s utilizes AI to handle orders, reducing the need for order-takers and expediting the pizza- making process before the transaction is completed. This approach reduces the labor required and results in faster preparation and delivery times.
Incorporating chatbots on a restaurant’s website can expedite addressing customer queries and complaints, offering immediate service to customers while lessening the workload on restaurant teams.
AI and automation are technological tools that can greatly assist restaurant operators in managing their staff, inventory, and processes.
Challenges for the restaurant industry appear to be ongoing, with operational expenses, labor shortages, pandemic-related debts, and bankruptcies all on the rise. Recently, Restaurants Canada reported that 50% of Canadian foodservice operators are currently operating at a loss or just breaking even, compared to only 12% prior to the pandemic. These factors are placing significant pressure on restaurants throughout the country.
Simultaneously, consumers are reducing their spending due to food inflation and high interest rates. A survey conducted earlier this year found that Canadians are dining out less frequently compared to last year, both at sit-down restaurants and for takeout and delivery. While multiple factors may be contributing to this decrease, it is evident that maintaining customer loyalty is crucial for restaurant operators to sustain their profit margins.
The significance of regular customers
Businesses struggle to thrive without loyal customers, who serve as advocates and influential brand promoters. For restaurants, customer engagement and loyalty have always been key to profitability, and they are even more critical when customers are budget-conscious and competition is fierce.
By nurturing a loyal customer base, restaurant owners can rely on consistent patronage to mitigate the impact of rising expenses. According to a recent annual survey, 57% of Canadians participate in between two and four loyalty programs, while one in five belong to at least five loyalty programs. It is clear that Canadians value these programs, and fortunately for foodservice operators, technology has evolved to facilitate higher levels of engagement.
Utilizing data-driven technology to convert occasional customers into loyal patrons
In order to convert casual customers into highly loyal patrons, restaurants must first ensure that their technology infrastructure supports their communication needs with customers. By investing in an omnichannel technology platform, restaurants not only gain access to valuable data but also unlock the potential for targeted marketing campaigns. In today’s data-driven world, leveraging the power of data is not just optional but necessary.
Through a robust POS system, restaurants can collect and analyze guest information, including customer demographics, preferences, purchase history, and buying patterns. Brands can then utilize this information and employ micro-segmentation to create targeted promotions and messaging based on previous purchases, driving repeat business and fostering customer relationships.
Another way to utilize this data is to uncover which menu items are the most and least profitable. Restaurants can increase overall spending by creating strategic promotions around the best-selling and most profitable items. Whether it’s offering buy-one-get-one (BOGO ) or any other type of discount, promotions can attract customers, leading to increased traffic to online ordering platforms. After that, restaurants can entice customers further with add-ons, discounted menu combinations, and extra incentives for loyalty program members.
There is no universal approach
As the world becomes more digital, loyalty programs are also evolving. With access to this wealth of information, restaurant operators can use digital incentives to keep customers engaged in earning rewards and coming back for more.
Developing a successful loyalty program requires a personalized strategy because there is no one-size-fits-all solution. By implementing rewards programs based on points, restaurants can specifically target their most frequent customers and offer exclusive promotions accessible only after unlocking the rewards.
A related trend is integrating gamification into digital loyalty programs, which provides an opportunity to drive engagement. In-app games like spin-to-win and tiered programs enable restaurants to incentivize participation in loyalty programs and encourage repeat business.
When creating or updating a loyalty program, it is essential to ensure that it is easy for the consumer to comprehend. An effective loyalty program should direct customers to the restaurant’s online ordering page, preventing confusion or frustration when navigating the website. Keep it simple – as with any program, if it’s too complicated for the end user to understand, it will frustrate customers, which could limit adoption and discourage long-term use.
Connecting sales to profits
Dining out is an expense that many people cannot afford to do frequently, so those who can, carefully choose where to dine. Whether operators are trying to stay afloat or remain competitive in this demanding market, understanding what resonates with guests and using that knowledge to drive repeat business is crucial.
By leveraging a robust POS system, restaurant operators can utilize customer data to establish a meaningful and customized loyalty program that truly connects with their audience.
When implemented thoughtfully, a loyalty program becomes a powerful tool for restaurants to increase orders, boost profits, and build a stronger connection with their valued customers. After all, loyalty is truly invaluable.
AI in restaurants has emerged as one of the most significant trends of the decade in the food industry. With technological advancements, artificial intelligence has entered the restaurant business, transforming conventional dining practices and revolutionizing the entire dining experience.
From ordering to food preparation and delivery, AI is enhancing efficiency and customer satisfaction in restaurants. Now, let’s delve deeper into the transformational impact of AI on the future of dining.
What does AI mean for Restaurants?
In restaurants, AI refers to the incorporation of advanced technologies such as machine learning, natural language processing, and data analytics into restaurant operations. It entails using computer programs or algorithms to emulate human-like intelligence and decision-making processes in the food industry.
In simpler terms, AI aids restaurants in operating more efficiently by automating tasks that were previously performed manually, allowing employees to dedicate their time to other crucial aspects of the business.
The growing popularity of AI in the food industry has been driven by the increasing demand for quicker and more convenient dining experiences. Customers today have high expectations for service, and AI helps restaurants meet these expectations.
How is AI utilized in the Restaurant Industry?
AI is employed in various capacities in the restaurant industry, encompassing front-end and back-end operations. Here are some of the most prevalent uses of AI in restaurants:
Chatbots for customer service
Many restaurants now utilize chatbots on their websites or social media platforms to provide rapid and personalized responses to customer inquiries. These chatbots utilize natural language processing (NLP) techniques to understand and address customer queries, resulting in enhanced customer service.
Culinary trends and menu optimization
AI can analyze data from past customer orders and trends to forecast future food preferences. Predicting culinary trends helps restaurants make data-driven decisions regarding menu planning and food ordering, lowering the likelihood of overstocking or running out of ingredients.
Predictive analytics for inventory management
With AI algorithms, restaurants can forecast demand for specific dishes and ingredients, enabling them to manage their inventory more efficiently. This reduces food waste and saves costs for the restaurant.
1.Customized suggestions
AI-driven recommendation systems analyze customer information, such as past orders and preferences, to propose personalized menu items or offers. Gathering and analyzing restaurant data can also help identify favored dishes, improving menu planning and enhancing customer satisfaction.
2. Automated meal preparation
When envisioning AI in restaurants, people often think of robots cooking and serving meals. While fully automated dining experiences are still a novelty, AI-powered machines are currently performing specific tasks like cutting vegetables and grilling burgers. This technology streamlines kitchen operations, reduces labor expenses, and ensures consistent food quality.
3. Food Analysis
Utilizing food intelligence technology, restaurants can utilize AI to assess customer feedback and reviews, as well as social media trends, to recognize popular dishes and flavors. This assists restaurants in creating more enticing menus and making decisions based on data.
4.Detection of Fraudulent Activities
Restaurants are susceptible to fraudulent activities, such as credit card fraud or employee theft. AI technology can identify suspicious patterns and flag them for further examination, aiding restaurants in preventing financial losses.
5. Employee Schedule Management
With AI algorithms, restaurants can schedule employees’ shifts based on anticipated demand, reducing overstaffing or understaffing problems. This not only saves costs but also ensures a smooth operation during busy periods.
6. Data Analysis for Business Understanding
Restaurants can utilize AI-powered data analysis tools to gain insights into customer behavior, sales trends, and other critical metrics. Access to foodservice insights at their fingertips empowers restaurants to make data-driven decisions, resulting in enhanced operations and increased profitability.
7. Intelligent Waiters for Delivery Orders
With the surge in online food delivery services, some restaurants are employing AI-powered virtual waiters to handle incoming delivery orders. These virtual waiters take orders, process payments, and even communicate with customers, lessening the workload for restaurant staff.
8. Advantages of AI in Restaurants
Time-saving
One of the major benefits of AI in restaurants is its capability to automate tiresome and time-consuming tasks. This frees up employees’ time, enabling them to focus on more crucial tasks such as providing exceptional customer service.
9. Moreover, utilizing AI for restaurant menu planning enhances efficiency and creativity and can save chefs time and effort in creating new dishes.
10. Cost-effectiveness
AI technology can help restaurants save money in various ways, such as reducing labor expenses, minimizing food waste, and preventing fraud. With AI-powered inventory management systems, restaurants can precisely track ingredients’ usage and expiration dates, guaranteeing that they only order what is required and avoid unnecessary expenses.
11. Enhanced Customer Satisfaction
By employing AI-powered tools for data analysis and predictive maintenance, restaurants can acquire insights into customer preferences and behavior. This information can be used to personalize the dining experience for each customer, resulting in increased satisfaction and loyalty.
12.Improved Operational Efficiency
AI technology streamlines restaurant operations by automating tasks such as order processing, payment handling, and inventory management. This reduces the risk of human error and speeds up processes, enhancing overall operational efficiency.
13. Enhanced Food Quality
AI-powered systems can precisely monitor cooking times and temperatures, consistently resulting in high-quality dishes. Additionally, AI can assist with recipe development to create unique flavor profiles and continuously improve menu offerings.
14. Better Decision Making
Data-driven insights provided by AI technology can help restaurant owners make informed business decisions. By analyzing sales data, customer feedback, and market trends, AI can offer valuable insights that contribute to a restaurant’s success.
Disadvantages of AI in Restaurants
Initial Investment
Implementing AI technology requires a significant initial investment, which can be challenging for smaller restaurants with limited budgets.
Technical Challenges and Maintenance
AI systems are not flawless and may encounter technical challenges or require regular maintenance, which can be costly. Challenges in AI adoption include integration with existing systems, staff training, and ensuring data privacy.
Reduced Human Interaction
Using AI technology to automate tasks might decrease the need for human staff, leading to a reduction in personal interactions with customers. This could potentially impact the overall dining experience for some customers who prefer human interaction.
Dependency on Technology
Restaurants that heavily depend on AI technology may face disruptions in operations if there are any technical issues or system failures. This may lead to delays and dissatisfied customers
Potential Job Displacement
The increased implementation of AI technology in restaurants could potentially lead to job displacement, especially for roles that can easily be replaced by machines. This could result in job loss and widen income inequality.
Privacy Concerns
The use of AI technology relies on gathering and analyzing vast amounts of data, which raises privacy concerns for customers. Restaurant owners must ensure that their use of AI complies with data protection laws to avoid potential legal issues.
- Examples of Restaurants Using AI
- Spyce – a Boston restaurant that employs robotic staff and AI for quickly preparing customized meals.
- Eatsa – a fast-casual restaurant chain that uses AI-powered digital kiosks for ordering and pickup.
- McDonald’s – the global fast-food giant acquired an AI company to personalize the drive-thru experience.
- Haidilao – a popular Chinese hotpot chain using AI-powered robots for food preparation and delivery.
- Zume Pizza – a California pizza chain utilizing robots and AI algorithms for automated pizza production and delivery.
- Domino’s – the pizza chain employs AI-powered voice assistants for customer orders and delivery tracking.
- HelloFresh – a meal-kit delivery service that uses AI to personalize meal recommendations and enhance customer experience.
AI in Fast-Service Restaurants
Fast-service restaurants have rapidly adopted AI technology due to its capability to improve efficiency and reduce costs. Here are some ways AI is utilized in fast-service restaurants:
- Automated Ordering – Many fast food chains have integrated self-service kiosks powered by AI, allowing customers to place orders without interacting with a cashier.
- Predictive Ordering – Some restaurants use AI algorithms based on previous ordering data to predict customer preferences and suggest menu items.
- Personalized Marketing – By analyzing customer data, fast-service restaurants improve marketing efforts by targeting customers with tailored offers and promotions.
- Delivery Optimization – With the increasing demand for delivery services, some fast-service restaurants use AI-powered software to optimize delivery routes for faster service.
- Inventory Management – AI can analyze sales data and adjust inventory levels accordingly, reducing food waste and improving efficiency.
- Food Preparation – Similar to Haidilao and Zume Pizza, AI-powered robots are employed for food preparation to improve speed and consistency.
AI Robots in Restaurants
In addition to fast-service chains, full-service restaurants are also starting to introduce AI-powered robots for tasks such as taking orders and serving food. These robots can improve efficiency and reduce human errors, allowing restaurant staff to focus on other important tasks .
Some companies have even developed AI-powered robots capable of cooking and meals preparing, enabling restaurants to handle a higher volume of orders without compromising quality.
Utilizing AI in the Restaurant Industry
AI technology has the potential to revolutionize the restaurant industry but may be intimidating for inexperienced business owners. Here are some suggestions for effectively utilizing AI in a restaurant business:
Start Small – Instead of trying to implement a complete AI system all at once, begin by integrating smaller AI tools and gradually expand as you become more comfortable.
Analyze Your Data – Before implementing any AI systems, make sure to analyze your existing data and identify areas where AI can have the greatest impact.
Stay Informed – The field of AI is constantly evolving, so it’s crucial to stay updated about new advancements and technologies that could benefit your restaurant business.
Train Your Staff – Introducing AI technology may require training for your staff. Make sure to provide them with the necessary knowledge and skills to effectively utilize and manage the new systems.
Will AI Replace Restaurant Employees?
The question for many is whether AI will ultimately replace human workers in the restaurant industry. While certain tasks can be automated with AI technology, such as taking orders and delivering food, there are specific aspects of the restaurant experience that cannot be replicated by machines.
For instance, interacting with a friendly and knowledgeable server or chef can significantly enhance a customer’s dining experience. Additionally, machines may lack the creativity and intuition to create new dishes or adapt to changing customer preferences.
Instead of replacing workers, AI technology can actually complement and support them by streamlining processes and enabling them to focus on more important tasks like providing personalized service and creating unique menu items.
The Future of AI in Restaurants
As technology advances, we can expect to see even more innovative uses of AI in the restaurant industry. Potential developments include:
Voice assistants for customers – Just like McDonald’s use of voice assistants for ordering, more restaurants may adopt this technology to enhance efficiency and minimize errors in order taking.
Automated food preparation – Although some chefs may be hesitant about machines cooking their dishes, AI technology has the potential to aid in repetitive and time-consuming tasks such as chopping vegetables or mixing ingredients, allowing chefs to dedicate more time to the creative aspects of cooking .
Robotic chefs – While it may sound unlikely, there have been advancements in developing robotic chefs capable of handling basic cooking tasks. While not intended to replace human chefs entirely, they can help with food preparation and reduce labor costs.
Virtual Reality (VR) dining experiences – Certain restaurants have already started testing VR technology to elevate the dining experience for customers. This can involve virtual tours of ingredient-sourcing farms or creating simulated environments based on the cuisine being served.
FAQ
How can AI assist in a restaurant?
AI can aid in a restaurant by streamlining processes, improving efficiency, reducing errors, and allowing employees to focus on more critical tasks.
Are there any drawbacks to using AI in a restaurant?
Some potential downsides to using AI in a restaurant include high implementation costs, reduced personalization compared to human interactions, and potential job displacement for employees handling repetitive tasks.
How many restaurants utilize AI?
It’s challenging to provide an exact number, but it’s estimated that thousands of restaurants worldwide are integrating AI technology in some capacity. This number is anticipated to grow as AI becomes more accessible and affordable for businesses.
Does McDonald’s employ AI?
Yes, McDonald’s has been integrating AI technology in their restaurants for multiple years. This includes self-service kiosks, automated order taking, and utilizing AI to anticipate customer orders and adjust inventory accordingly.
Today, the company has established offices in major global cities and has supported clients in processing 500 million meal orders in five years. Food ordering and fulfillment software allows restaurants to operate across various channels, similar to how retail platforms have transformed physical stores into adaptable digital shopping hubs.
Digital tools support customers who wish to dine in, those who prefer to pick up their orders at the restaurant, and seamlessly integrate popular delivery partners such as Uber Eats, Deliveroo, DoorDash, and Hungry Panda – to name a few.
Demonstrating how AI is revolutionizing the restaurant industry, algorithms assist users in planning their social media posts and launching promotions for specific events. Menus can be adjusted dynamically – for instance, to reflect nearby major soccer matches or music concerts at outlets within a medium to large restaurant chain.
Deliverect, a Meta partner, enables the food ordering software provider to integrate its solutions with prominent social networks such as Instagram and WhatsApp. Consumers can browse their Instagram feed and place orders directly from an appealing Instagram story – a feature that boasts a high conversion rate from clicks to food sales.
Menus can also be altered on the go. If a menu item is running out of stock, it can be temporarily removed until more supplies arrive – avoiding disappointing diners and enhancing the overall customer experience. The food ordering software empowers restaurants to tailor their offerings to different demographics and run multiple menus simultaneously – displaying only one to each segment.
AI is revolutionizing the restaurant industry by streamlining menu adjustments during peak hours – for example, reducing the number of options when fewer staff are working. Complex menu items can be paused during busy periods. Alternatively, prices can be dynamically adjusted. Xu points out that raising prices during peak hours might result in a few lost orders, but this presents an opportunity for food establishments to capitalize on their popularity.
Data insights can be a game changer for restaurant owners. Digital tools can swiftly identify the most profitable menu items and give them greater visibility. offline, analytics help chefs identify which dishes need to be revamped or removed from the menu.
The advantages of these different operational support systems illustrate how AI is revolutionizing the restaurant industry. Businesses have been able to adapt to the preferences of a new online audience and digitalize without requiring specialized technical expertise, which has been vital for their survival.
AI has also enabled software providers like Deliverect to extend their support to smaller businesses by integrating the latest automation tools for onboarding and handling support calls, even though they traditionally catered to mid-sized and larger restaurant chains.
Regarding robot kitchens, it might gain popularity if it becomes a part of the dining experience, considering that restaurant dining is all about the experience. However, the design would have to be much more engaging than a large vending machine to entice customers.
When thinking about a fast food restaurant, what comes to mind? Perhaps a bright, plastic-and-tile establishment filled with the sound of children’s parties and teenagers, or maybe lines of adults waiting behind freestanding touchscreens or an unattended kiosk?
The answer likely varies based on your last visit to a McDonald’s, as in recent years, the latter scenario has become more common. Technology is reducing noise as customers place orders over the phone or through a touchscreen, pick up their orders, and swiftly exit without saying a word.
There has been a noticeable decrease in the number of people dining at fast food chains, a trend that was accelerated by COVID-19. According to data from the NPD Group, only 14 percent of US quick-service restaurant traffic now consists of dine- in customers, just half of the pre-pandemic percentage. The following year, 85 percent of all fast food orders were for takeout.
This shift is shaping a new culture in fast food restaurants. While the once iconic ‘Golden Arches’ was once the destination, it’s now simply a quick stop along the way for many. Those craving a quick meal can simply order from their phones and have it delivered within minutes.
As a result, chains are reducing the number of tables available for customers and optimizing the space for on-premises orders, takeaways, and drive-thrus. This includes adding more drive-thru lanes and windows specifically for third-party delivery pickup.
TGI Fridays introduced ‘Fridays on the Fly,’ a 2,500-square-foot store format emphasizing delivery and takeout orders early last year. Chipotle already offers dedicated drive-thru lanes for mobile-order pickups, and other chains, such as McDonald’s, Burger King, Taco Bell, and KFC, are eager to follow suit.
McDonald’s has already implemented an ‘Order Ahead Lane’ at a branch in Fort Worth, Texas, which is nearly 100 percent automated. The restaurant, which opened in December last year, has no indoor seating. Instead, it features special kiosks and digital screens for customers to place their to-go orders.
It also has a designated pick-up shelf and a dedicated area for serving delivery drivers. Additionally, it offers parking spaces for curbside pick-up, allowing customers to quickly retrieve their warm meals upon arrival.
Just four months after the opening of the Fort Worth branch, the Wall Street Journal reported that McDonald’s would be laying off hundreds of employees as part of a company-wide restructuring effort. Although the majority of those affected worked at corporate offices rather than branches, the restructuring was intended, at least in part, to “accelerate the pace of… restaurant openings” and “modernize ways of working.” What other changes will be made to achieve these objectives?
It’s evident that most fast food chains are prioritizing efficiency improvements. Wendy’s is testing “Wendy’s FreshAI” to take orders at drive-thrus and an “underground autonomous robot system” to have bots deliver orders from kitchens to parking spots. Starbucks plans to open 400 new takeaway or delivery-only locations in the next three years, after removing all seating in select cafes, as reported by the Wall Street Journal.
McDonald’s is also among the restaurants using ‘geofencing’ – a technology that alerts back-of-house staff when a customer is approaching the restaurant to pick up their order, ensuring that the food is ready and warm upon their arrival.
If the trend of shifting towards delivery service continues, it appears that fast food enthusiasts are willing to accept the 30 percent price increase for orders through third-party apps such as Deliveroo or Uber Eats, in exchange for the comfort and convenience of dining at home .
Taking travel expenses, restaurant taxes, and the urge to spend more at other places into consideration after eating, is dining out really the costlier choice? Besides, your exorbitant energy bill needs to be paid anyway, so you might as well take advantage of it by staying at home.
No pickles, no people
The battle for automation is ongoing, and there are numerous technologies waiting to be more widely implemented. Flippy, a robot chef from Miso Robotics, can reportedly flip burgers faster than a human while maintaining consistent quality. This bot is being utilized by White Castle, CaliBurger, and Inspire Brands, the parent company of Buffalo Wild Wings, Arby’s, and Sonic.
Starbucks has already invested millions in AI-powered espresso makers, capable of brewing drinks more swiftly than a human barista, and intends to further invest in this area. The Blendid autonomous smoothie kiosk, enabling customers to order customized fresh drinks via an app before a robot arm prepares them using fruits and vegetables, offers a glimpse into the future of food stands.
Special packaging is under development to prevent food from becoming soggy over extended periods, allowing delivery drivers to take on more orders during their routes.
But the delivery personnel may also not be human. Starship Technologies’ fleet of autonomous ground vehicles currently delivers groceries in cities in the UK and US. They are equipped with ten cameras, GPS, inertial measurement units, as well as microphones and speakers to interact with clients. Their LIDAR systems provide a 360-degree view of their surroundings, enabling them to navigate sidewalks and obstacles to reach their destination.
Serving 68 million customers daily across 36,000 restaurants worldwide, McDonald’s continues to fulfill its long-standing promise of rapid, efficient, and consistent food and service.
Five technologies transforming the future of fast food
Continuing this streak entails McDonald’s keeping pace with evolving customer and market demands, relying on the latest available technology to do so. The company’s size and customer base mean that, in pursuit of an ever-evolving service, the fast-food behemoth isn’t just collaborating with tech partners; it may make more commercial sense to acquire them outright.
Earlier this year, McDonald’s made its largest acquisition in 20 years with the purchase of personalization and decision logic company Dynamic Yield for US$300 million.
This technology would enable McDonald’s to provide customers with a real-time, ‘Amazon-like’ experience at the drive-thru menu board. Soon to be extended to in-store menus and its app, customers could be shown food and drink options based on the time of day, weather, current restaurant traffic, and trending menu items.
This acquisition demonstrates that, while traditional food and beverage industries might face disruption from app-based food delivery startups, there is ample potential for new innovations offering enhanced ‘online-like’ customer service experiences.
The company proceeded to acquire nearly a 10 percent share of Plexure in April, a New Zealand-based mobile app vendor worth US$5 million, which is now utilized in its mobile app across 48 countries outside the US. Plexure’s CEO, Craig Herbison, referred to it as a “tremendous vote of confidence from our largest customer.”
Voice technology in the drive-thru
Six months later, the fast-food corporation is maintaining this trend by reaching an agreement to acquire Apprente, a Silicon Valley voice-ordering technology startup capable of understanding multiple languages and accents. With McDonald’s generating 65 percent of its sales in the US through drive -thru windows, according to QSR Magazine, the technology could reduce time and simplify the ordering process, ultimately increasing revenue across its thousands of outlets.
“Building our technology infrastructure and digital capabilities is integral to our Velocity Growth Plan and allows us to meet rising customer expectations while making it simpler and even more enjoyable for crew members to serve guests,” stated McDonald’s President and Chief Executive Officer, Steve Easterbrook.
This technology will be deployed on its self-order kiosks in due course—which have been generating higher average checks in the US—and its mobile ordering service.
Although no price tag was disclosed, Apprente previously secured US$4.8 million from investors. Following the acquisition, the startup’s staff—comprising machine learning and computational linguistics experts—will become “founding members” of McDonald’s new McD Tech Labs, which will operate from the firm’s innovation center outside Chicago.
Automating the fast-food industry
McDonald’s aggressive tech acquisitions are clear indications of its push to automate drive-thrus and, in the process, a significant portion of its revenue.
The hospitality industry, especially the fast-food sector, is likely to be one of the first to undergo automation in the next few years. This is due to the repetitive nature of customer service and meal preparation. Additionally, automation can help alleviate staffing shortages , considering the 800,000 unfilled positions in the US last year.
Widespread offline, the broader US hospitality industry, which represents one in every eight jobs in the country, is expected to be significantly affected by automation, leading to job displacement.
McDonald’s, currently valued at US$167 billion, saw its stock rise by 22 percent this year.
It has over 36,000 restaurants across 119 countries with nearly 68 million customers daily, generating earnings of over US$6 billion last year.
The rapid automation of fast food
Due to its sheer scale, McDonald’s is the most successful fast-food chain globally. Its success is largely attributed to consistency— customers know what to expect, and the service is straightforward and simple.
With a commitment to maintaining this business model and brand, the company is increasingly exploring new technologies to enhance its service for the digital age. This is evident in its recent acquisition of Dynamic Yield for an estimated US$300 million.
This acquisition, the company’s largest in two decades, will provide McDonald’s with the technology to offer customers a personalized experience at the Drive-thru menu board, described by TechCrunch as ‘Amazon-like.’
This technology will enable the display of a personalized version of the expanding menu, suggesting food and drink options based on factors such as time of day, weather, current restaurant traffic, and trending menu items.
Additionally, the digital signage will suggest additional and live items to complement a customer’s order based on their current selection— a tactic commonly employed by e-commerce sites to encourage additional purchases.
The technology is scheduled for implementation at implementation McDonald’s Drive-thru restaurants in the US in 2019 and will subsequently be introduced in key international markets. It will also be integrated into digital customer touchpoints, including self-order kiosks and the mobile app.
Smaller fast-food establishments, restaurants, or other retailers of low-cost products may not have access to the data of 68 million consumers per day, or the financial resources of US$300 million.
Nevertheless, this move demonstrates how brick-and-mortar retailers can effectively incorporate online experiences into real-world services, catering to consumers accustomed to personalized and convenient service.
Moreover, it avoids the novelty factor often associated with new technologies. There will be no augmented reality or ‘design your own burger’ feature; instead, the software will seamlessly integrate with the newly-introduced digital menu boards at Drive-thrus.
Daniel Henry, McDonald’s executive vice president and global chief information officer, noted, “When you look at the answers that this decision engine provides, it may not seem so obvious at first, but for customers, it makes sense. It’s not just about the individual; it also incorporates information gleaned from other customers. It will only become more intelligent as more customers engage with it.”
Steve Easterbrook, the CEO of the fast-food giant, added, “We’ve never lacked data in this business. The challenge lies in extracting insights and intelligence from it.”
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