by Greg Staley, CEO of SynergySuite
The last three years have been a wild ride for the restaurant industry and many operators are hoping for an end to the rollercoaster. Covid-based restaurant closures, supply chain fluctuations, labor shortages, and more have put a strain on operators who are trying to keep stores open and profitable.
So, what might 2023 bring, and will it be any better than recent years? The coming year likely won’t be a cakewalk, but I do see reason for some cautious optimism when it comes to restaurant technology. Labor pressure is starting to ease, paving the way for implementing stronger labor management tools while there’s breathing room. Restaurant brands are keeping as much in house as possible to control the customer experience. Ongoing acquisitions are driving consolidation, which coincides with some operators realizing they want fewer systems that each do more. And a (likely) recession is causing guests to dine out less, making the guest experience more important than ever as operators compete for their business.
Here are four things I think we’ll see in 2023:
1. More acquisitions create further consolidation.
Acquisitions are still happening, both among restaurant brands and restaurant technology vendors. In 2022, we saw moves like PAR’s acquisition of MENU Technologies, Olo’s acquisition of Omnivore, Square’s acquisition of GoParrot, and Toast’s acquisition of Sling.
As brands seek to consolidate and provide more services under one roof, we will see that shift in technology purchases as well. This is partly driven by the acquisitions, but also by operators who first built their tech stack from multiple “best of breed” solutions and are struggling with integrations, training, and upgrades for so many systems.
2. Slight easing of labor pressure creates an opportunity to implement labor tools
It’s difficult to bring on new systems in the middle of a labor shortage. As helpful as they would be, it’s hard to vet, implement, and train employees on a new system when every store and department is short staffed.
Now that the worst of the labor crunch has started to lift, operators can begin to put systems in place to better manage labor. It will always be one of the industry’s biggest costs, so getting a better handle on it is important, and prepares the brand for future fluctuations. The best time to implement a system is before you need it, the second-best time is now, and I believe more operators will be putting systems in place in the coming year.
3. Restaurants are bringing things back in house, and competing on experience
As exciting and powerful as social media or third-party delivery can be, operators are feeling the loss of control over guest experience when their audience is mediated by another platform. I see brands bringing people back to their websites and apps, as well as adding their own off-prem capabilities.
As third-party apps increased in popularity, more brands felt the backlash from consumers who were trading convenience for cost and consistency. Offering incentives such as discounts, free delivery, or free items, restaurants have begun luring guests back onto their own properties where they can better control the experience and get better insight into guest preferences.
Facing a likely recession, operators know they’re competing for fewer dollars and need to have a rock-solid customer experience to attract and retain guests. Loyalty platforms and tools that monitor and enhance a consistently high-quality experience will be top of mind.
4. More franchisors will add technology fees
Nearly 60% of all QSR franchisors now collect technology fees to better add, update or upgrade required tools, according to a FranConnect analysis. While foodservice was something of a technology laggard, operators are working hard to bring systems up to date and gain a competitive edge in an industry where every penny counts.
More franchisors will be adding a technology fee in the coming year in an effort to bring on new, effective technology and keep existing technology up to date. While franchisees are not going to be happy about an additional slice of the pie, franchisors see it as a necessary next step if they want to have the data and insights needed to run an effective enterprise brand.
The next year is a promising one for restaurant brands and the technology vendors who serve them. The opportunity for improvement is wide, and restaurants are getting more stability in their food and labor costs, allowing them to focus on adding new tools to their tech stack. I’m excited to see what trends in 2023 shape the future of our industry and how operators will evolve to meet the challenges of the coming year.
Greg Staley is the CEO of SynergySuite, a back-of-house restaurant management platform. Greg focuses on facilitating better visibility and increased profitability for restaurant chains through the use of intelligent, integrated back-of-house technology. For more information, please contact Greg at email@example.com.