In class we have talked about companies or industries that have made digital jumps in the pandemic that otherwise would have taken them ten years to complete. This brought to mind one of my favorite industries, the restaurant business. While I do not believe the transformation that many restaurants went through during the pandemic for in person dining would have taken ten years, it’s fair to say that it was a fairly significant move to become digital. When I went back to dining at restaurants in June 2020 after the initial lockdown, I was impressed by the progress restaurants had taken to make their operations more technologically advanced in order to better serve the customers during a pandemic. In this blog I am going to go into a deeper dive on a couple of actions restaurants took to become digital very quickly and examine whether these developments are here to stay.
Online reservations have been around long before the pandemic, but they never were as important as they have become now. OpenTable, Resy and Yelp are the major players in the online reservation space. Customers have enjoyed using these services because they can lock up definite plans for popular, busy restaurants well in advance. Restaurants embraced online reservations because made their hosts jobs easier. They no longer have to take reservations by phone or deal with streams of people coming in to make reservations in person.
As the pandemic hit, the function of online reservations shifted from a planning tool for the consumer to actually more of a planning tool for the restaurants. When lockdowns and restrictions started to lift across the country, many states enacted capacity limits on in person dining for restaurants. It became very difficult for restaurants to predict demand and to accurately plan off of that. Reservations allowed the restaurants to see in advance how many people were going to be in the restaurant that day, which allowed them to staff accurately and try to have enough supplies on hand. The online systems also provided the restaurants the ability to easily conform to local restrictions on capacity, which changed frequently. Customers also benefited in this COVID environment of online reservations because every time they booked a table, they would be informed and reminded of the safety guidelines that the restaurant was following.
Another major digital change in restaurants comes with how customers read the menu and order food. Prior to the pandemic, I’m not sure many customers gave a second thought at how many people touch a given physical menu on a normal day or week. It became clear that this would have to be an area of change in order to limit the spread of germs and possible illness. QR codes were a quick response to this issue. QR codes (abbreviated from Quick Response) have been around since the 1990s but have seen a surge in popularity before and during the pandemic. Before the pandemic, there was a 13% increase in QR scans in the United States between 2018 and 2020. This number has surely skyrocketed in the past year.
Smartphones have the ability to read these codes and direct the consumer to a page or app to continue with their transaction. In restaurants, this means directing customers to a virtual menu or to a platform that facilitates online ordering. This has several benefits for the customers and restaurants. A major positive outcome for each is that it limits contact between customers and waitstaff. It also can free up time for the waitstaff to complete other tasks. For example, if the restaurant is using a platform that allows customers to place an order for their table virtually, they will not have to make as many trips to the table to take their order. This could also allow the restaurant to have less waitstaff working at a given time.
The online platforms also provide opportunities for greater engagement between the customers and restaurant. When a customer is scanning a menu or ordering food, the restaurant can push items like surveys or loyalty programs in a subtle way towards the patron. Customers may also be able to view videos or pictures of the menu items they are considering, which could entice them to order more than they previously may have. Greater feedback between the customer and restaurant can benefit both parties.
Here to stay?
The digital transformation of in person dining at restaurants has happened quickly. It raises the question of whether it is just a temporary response to a health crisis or is it here for the long term? Reservations surely will continue into the future for restaurants, but the way they function may change. A more common practice during the pandemic has been requiring a credit card to book a table in order to prevent against no-shows and to collect some revenue in the case that the table remains vacant for that reservation time period. Customers find this tedious and unnecessary when they are trying to make a quick reservation. A new approach that has been rolled out by the major reservation platforms is an online waitlist. This would allow more customers to spontaneously go to the restaurant in their area and would fill the issue of vacant tables from failed reservations. Traditional reservations for upscale and popular restaurants will probably not go away. However, rolling online waitlists for ordinary restaurants are likely to become more prevalent.
Online menus and platforms that are accessed through QR codes are also likely to stay through the pandemic. At the very least they can function as an extra menu for the table. They also can evolve into a more dynamic way for customers and restaurants to communicate. It’s ease of use is demonstrated in the statistic that 87% of smartphone users have reported to have scanned a QR code at least once in their lifetime. However, there are some demographics and restaurant types that QR codes and online platforms will not be as successful for post-pandemic. The older generation that still struggles to use a smartphone or does not own a smartphone will have a more difficult time adjusting. Restaurants like steakhouses will likely opt for a more glamorous approach with physical menus as well.
What are your thoughts on how technology has impacted in person dining during the pandemic? Do you like the changes that have taken place? Do you think they will continue into the “new normal”?