“Survival of the fittest”-
This is a famous quote coined by Herbert Spencer after reading the Origin of Species by Charles Darwin. If we look at real-life examples in a wider manner, this quote is not limited to the biological evolution of life but instead depicts the economical evolution taking place across different industry verticals too.
One such industry going through the struggle of survival amidst its peers is the restaurant business.
52% of the restaurant owners have agreed to the fact that high operating and food costs seem to be the top challenges that come their way when managing their businesses. Source: ToastLab
So, how to stay ahead of the game?
Restaurants can easily stay on top of everything by proper implementation of technology into their business.
95% of the restaurant owners have agreed that they get to improve the efficiency of their business through the implementation of technology. – Source : ToastLab
One such technology which is said to have some crucial impact on this industry niche is artificial intelligence. No doubt, there are numerous benefits of implementing artificial intelligence in restaurant like improved customer experience, increased sales, less food wastage, etc. to just name a few.
Here in this article, we will discuss about how the restaurant industry is getting revolutionized by the impact of artificial intelligence.
But, before we get any further, let’s understand these technologies first.
What is AI – Artificial Intelligence?
AI is nothing but programs which are developed in a way that it responds to particular inputs or environments by performing a said task. Depending on the scenario, they tend to change their response, and so can be said that they are imitating the behavior of humans.
To understand the AI technology well, let’s talk about the video games you play and the characters in there. Here depending on the kind of activity you want to perform, the characters in there run, jump or attack their opposition.
The way they react is programmed. With time and advancements in technology like the use of AI, changes have been seen in the characters too. They have now turned out to be more realistic compared to what they were before. Compared to other technologies out there, AI seems to be more reactive and responds quickly.
Artificial Intelligence & Machine Learning
Machine Learning is an essential subset of AI. Machine Learning comes up with functions that can be performed for certain actions or inputs by analyzing and learning from data. In case you watch Netflix or shop at Amazon, you must have seen that based on your searches or say categories, you are continuously offered suggestions. Such suggestions come up to you from the algorithms that analyze your activity on the said website or app. Based on your behavior, they come up with personalized suggestions that are explicitly meant for you.
Why Opt for AI in Restaurants?
No doubt, artificial intelligence brings on the table a platter of features for the restaurant owners, but there is more to know about it. Artificial intelligence can be helpful to them in a number of ways and here are a few to discuss:
Increase the Market Reach
With AI now, you can reach your customers even outside the reach of restaurants. It will help you with upsell and even make use of automation for better suggestions.
Enhance the Guest Experience
Your staff will be able to work towards improving the guest experience as they are relieved from other headache tasks by the AI.
Human involvement gets reduced from the process of taking orders and making table reservations. Such a level of automation will help with cost-cutting on the staff.
Here chances of miscommunication get nullified as most of the ordering process takes place through machines.
Application of AI in the Food Sector
Focusing on the task of reducing the waiting time for the customers and improving their experience, restaurants are now integrating AI-driven kiosks. Such ordering kiosks make ordering process simpler for the customers and such systems act as the point-of-sale system. Once the order is taken from the customers, they are directly sent to the kitchen –which drastically cuts down the food preparation and delivery time. Based on customer psychology and buying patterns, they make upsell suggestions to boost impulse purchases.
Virtual Personal Assistants:
There has been rapid growth seen in the field of virtual assistants and the technologies supporting them.
Today people search for restaurant information first on smart devices before they actually plan to visit one. The role of virtual assistants comes in here. They will collect all kinds of important data from the restaurants, which include the distance, wait times, menus, locations, etc. and they showcase them to the users. So, based on the interactions between the machines, users get to choose the restaurant and make reservations.
Restaurants now use AI-driven robots to speed up the process of preparing food and its delivery. The use of robots in the restaurant kitchen got all the limelight after the Restaurant Chain named Caliburger, which is situated in Pasadena, introduced a robot named Flippy into their kitchen. The robot was reported to be preparing more than 300 burgers within a day. Later they ended up ordering 50 more robots to be delivered by the end of 2019.
To respond to customer queries quickly, and to process and customize orders, restaurants now make use of chatbots. In a general scenario, websites mostly make use of chatbots for tech support. Restaurants use chatbots to respond to customer queries, take an order as well as to manage reservations. Chatbots reply to the customers in the form of typed messages just like we humans do.
They offer suggestions, provide feedback and make confirmations for the queries. With the increasing influence of voice-command technology, it will not be long enough that we will have chatbots that will revert back to the users through voice messages.
To help the customers to choose their meals based on their liking and preferences, developers are now coming up with applications that are AI-based. Such applications can be used by the restaurants to send personalized promotions for up-selling based on their preferences. After learning from the buying habits and the current location, AI will be able to know whether the user is staying at a place or traveling. Such information will help them make suggestions to customers in real-time.
Use of Artificial Intelligence in Reshaping the Future of Restaurants
To calculate future sales, restaurants carry out the process of sales forecasting. Many of them follow a regular process of going through the sales report from the previous year and choose a specific time frame in order to know the performance. Now keeping the report in mind and setting it as a benchmark, you can check your sales performance for the current year for the same said time-frame.
The issue with this process is that there are a number of factors that result in growth and failure of a business. Just by looking at the sales report of last year will not give you all the information. There can be a great impact on the sales of your business by factors like local or international events, holidays, location of your restaurant, and weather conditions. When you consider all such factors into your report, then you will be able to come up with a sales report which is more accurate. Machine Learning is something that helps with such a thing.
AI Used to Reduce Food Waste
Wastage of food is not a personal issue of a restaurant. It is a global issue that affects the environment and has to be tackled by the collective efforts of restaurants, businesses, suppliers and yes, customers too.
Now when we look at things from the perspective of the restaurants, checking this issue is good for them as they will be able to control their expenses and save money.
It is observed that, when a restaurant gears up to spend even a single dollar towards reducing the wastage of food, they end up getting seven dollars back on their investment. Sounds good, right!
So, just think about the fact that how much food wastage can be reduced when restaurants can make use of forecasting! You can plan your inventory stocks by making use of historical data of sales and weather conditions. This will help you buy things that you will actually need to meet the needs of your customers. This single step helps them to get rid of the risk of spending unnecessarily on the raw materials.
As per a report of 2017, it has been estimated that just within the US itself, every year, around 22 – 33 billion pounds of food end up reaching landfills.
As per a report from Unilever, it has been seen that 47% of the consumers are ready to spend more at a restaurant, which follows some crucial steps towards reducing food waste actively.
No doubt reducing food wastage is great for a restaurant. However, you also need to know that a good number of customers actually care about to know how the restaurants handle those waste.
So apart from saving some money, such a wise step will work towards reaching more number of customers who are conscious of their environment. By making use of artificial intelligence and machine learning, restaurant owners will be able to manage their inventory properly and they will be doing this by continuously monitoring the data insights. No doubt, this will help them deliver the best while steadily climbing the graph of ROI.
AI for Forecasting Sales
When it comes to predicting the sales of a restaurant, weather plays a very impact role. The majority of the restaurant owners believe that they can experience an impact on their sales based on weather forecasts. Changes in weather conditions influence the food choices of the customers.
Say, for example, on a cold and dark winter day person may have the urge to enjoy a cup of hot coffee while on a perfect sunny day, people prefer to be outdoors and enjoy a dinner cooked on a patio. So, choices change, taste changes!
To keep it simple, changes in the weather conditions will affect the food choices of the people and they may be drawn towards some particular foods. This means the outside weather conditions will influence the number of customers that will visit your restaurant on a specific day.
When you make use of machine learning for your restaurant business, you will be able to get a clear idea about the potential sales based on the sales performance from the previous year, day of the week as well as the weather conditions.
Based on the information you gather from such data, you can decide the right amount of staff that you will need to handle customers on a quiet day or on a day which is the busiest of all.
AI Used to Forecast Event Foot Traffic
Restaurants can also experience changes in sales based on the events just like holidays. Say, for example, if your restaurant is based in a locality where a music event is going to be conducted, or a local rugby match is scheduled near you. It is a fact that you can expect a large crowd to gather in your area for the event. This means that you will experience more sales on the day of the event. So if you are not prepared with enough inventory stock and enough staff, you will lose your chance of making good revenue.
Similarly, if you are into organizing events regularly at your restaurant, you need to follow the same rules as said above to grab in more money. Getting ready is inevitable and artificial intelligence can help you do this is a better way.
Use of AI to Forecast Holiday Sales
In the general scenario, it is observed that during the holiday season, restaurants make more sales. No doubt, a good number of restaurants can experience an increase in sales during the festive season, while a 60% decline in the sale is experienced by upscale restaurants.
By the proper use of AI, it is possible for the restaurants to accurately get the insights that can help them to be ready for the holidays with the right staff, inventory and sales projections. So instead of making the guesswork, you can use artificial intelligence to know the stock you will need to fulfill the demand of the rushing consumers.
Again, the place where your restaurant is located also plays a crucial role in judging your sales during the holiday season. AI can help you predict the foot traffic, which you can expect during those days using some weather and historical sales data.
AI for the Purpose of Promotions
The restaurant business is all about promotions. In order to boost sales and expand the business, restaurants completely depend on promotions. It becomes possible for the restaurants to get the maximum out of their promotions by making use of AI for building up effective strategies. Apart from making more money, such a step also helps the restaurants to enhance their performance and efficiency.
Now just imagine that you have come up with an excellent promotional plan for your restaurant. You have made a ground-level plan considering everything. You have got everything in your inventory from the suppliers and even got enough staff on board to handle things. What if everything fails drastically then!
When you implement AI in your restaurant promotions, you will be able to predict the things which can prove to be positive for the event. You will be able to pinpoint the things which can boost the performance of the promotion. You will be able to come up with excellent promotions that will strike a chord with the customers by understanding their buying behavior properly. Such promotions will help the restaurant in the form of increased sales.
Use Cases Of AI In The Restaurant Business
By working with Baidu, the Chinese search engine, KFC is all set to use face recognition technology that is AI-based in order to build smart restaurants in China. This smart restaurant will try to figure out what the customer will be interested in munching based on facial expressions, their gender as well as other visual features. So this kiosk works towards coming up with menu suggestions based on the physical characteristics of customers before they actually make a selection.
You can watch this video to get an idea about how this KFC kiosk technology works
This is an AI company that was found in the year 2013. This company has made use of AI in its food sensor scanner to know what the food is made of at the molecular level. By analyzing the food items in such a way, they are trying to find out the presence of any harmful substances in there. Apart from identifying the villains in the food, it also helps us know about the macronutrients, calories and other kinds of nutritional information related to it.
If you wish to know more about how this AI-based handheld food sensor works, you can just watch this YouTube video:
Halla has been developed explicitly for Apple technology and is a personalized search engine for restaurants. This search engine projects as a single solution to find different food delivery apps. Based on the entered profile and specifications, this search engine matches people with the right dining experience. To bring in the best suggestions to the customers, it learns from patterns that are based on the customer’s location and their dining choices.
Again, Halla claims that just like Spotify or Pandora did in terms of breaking down the songs for the users, it went on to break down the dishes based on flavor or ingredients after learning customer patterns and suggested restaurants accordingly.
Dominoes(from Domino’s Pizza)
Domino’s Pizza came up with a better Facebook Messenger chatbot named as Dom in February 2017. By using this chatbot, the users can make orders for pizzas just by including only the word pizza. Later the chatbot was updated so as to help the customers make orders for salads and wings.
AI is steadily moving forward in the restaurant industry, and within a couple of years, it would be known well across the industry. It has to be said that AI is already here and it has started to leave its footprint. Restaurant businesses are experiencing a bunch of evident benefits by using AI in the form of better ordering, quick food preparation and serving, cost-saving, etc. Still, it has to be said that we haven’t reached the era of complete automation and the use of dedicated robots as restaurant staff. Though we are yet to reach there, it is time to embrace the technology for all good reasons.