28 Jul 2021

The Use of Artificial Intelligence in the Restaurant Industry: Impact and Benefits

By: Brittany Maroney

Strategy

Artificial Intelligence (AI) is a technology that truly is transforming every walk of life, including the restaurant industry. As sales begin to rebuild, post-pandemic, hungry consumers are seeking more efficient and seamless engagements within their dining establishments, putting pressure on operators to seek solutions and implement new technologies. Critical to the process of building strategies to engage is the ability to take large inputs of data and be able to apply Artificial intelligence is a critical component for many brands looking to improve the customer experience and drive loyalist behaviors. The true benefits of artificial intelligence in the restaurant industry are yet to be seen but will extend beyond robots that take orders, produce and deliver food. AI will help restaurant owners make good use of incredibly large amounts of data and in the end, fundamentally improve the dining experience.

As the restaurant industry moves toward more technology, the future of machine learning and artificial intelligence is bright. Here are a few important points to illustrate how marketing can be transformed when AI is used to analyze and guide restaurant marketers to the right decisions.

As brands emerged from the public health crisis, many looked at their service model and began considering implementations of more streamlined systems. Drive-through menus, in-store kiosks, and mobile apps will provide more relevant upsales, better loyalty programs, personalized rewards, easier access to customer information, user experiences, and a more engaging ordering experience. Machine learning and other artificial intelligence technologies will take more of the tasks currently performed by managers and their employees out of their leisure time and focus on the ultimate customer experience.

From ordering to checkout, consumers are seeking an improved guest service experience that staffing has just been unable to keep up with. Order kiosks have proven to provide the quick, contactless experience they desire while offering direct integrations to POS systems, kitchen display systems, and mobile order solutions. Restaurants are using AI-controlled kiosks to increase capacity and speed up food ordering, preparation, and payment from the point of entry.

Some restaurants are also exploring virtual assistants to answer customer queries, make recommendations, and process customer orders. Voice ordering often uses chatbots or AI-enabled virtual assistants to answer customer queries, process and customize customer orders. Utilizing voice-enabled devices allow customers the ability to order food in one touchless and streamlined transaction, often allowing them to order over the phone or skipping the line when the drive-thru is full. Voice-enabled technology also enables the restaurant to provide a new level of customer service support by providing the customer with statuses on order preparation times, food preparation delays, and delivery statuses. With the help of facial recognition, you can meet regular customers, help them with their orders and make them wait their turn. In addition, AI will be used to monitor customer behavior and give an idea of how the restaurant can influence customers.

Imagine going to a self-ordering kiosk and touching it so you can order with your voice. In transit, a car full of hungry customers can place their order by talking to a voice-assisted contractor, and the order is queued up with other orders in the checkout system. If you take phone orders in the store and experience a busy moment, voice assistant technology can record the customer’s phone order and enter it into your POS system so they can order from any other ordering channel that you offer. Some restaurants even use chatbots on their mobile apps to respond to customer requests, take orders and manage reservations.

This technology can ensure that orders are placed in queues with other orders without a human having to enter them into the restaurant’s point-of-sale (PoS) system. The PoS system would be able to receive voice commands from digital voice assistants, phone calls, self-service machines that recognize when you ask for your regular order, web orders, chat screens, drive-through (one of the best times to test your location), and personal order counters. An app that integrates with restaurant POS systems enables customers to send orders by SMS.  

Restaurants are also evaluating how AI can help overcome critical issues with staffing, scheduling, and developing manpower. This is big data, and while you may not realize it, the software solutions you use for everything from employee planning software to checkout systems will be a gold mine of information that will help you run your restaurant like a well-oiled machine. These solutions manage and monitor a large amount of data every day to predict things like labor needs, peak hours, food quality, and inventory numbers, thus ending the guesswork. Using them is a key piece of the puzzle that allows human operators to work more efficiently and focus on higher-level tasks. This increases turnover, productivity and lowers labor costs for restaurant owners. While there are concerns that artificial intelligence will take jobs away from human workers, it can help reduce burdensome tasks and improve the work-life balance of guest workers. In the near future, these solutions will be able to use data generated by your restaurant to create work-optimized employee plans, using your sales data to predict which items are being sold and increase your profits.

Autonomous delivery will also help staff by optimizing delivery routes and handling the alerts and communications with customers, making shifts safer and less stressful. This massive potential is evident on both a global and national scale — there have been 195 deployments of social robots worldwide in response to the pandemic. The U.S. has seen a 20% increase in preference for contactless operations in addition to a food delivery boom, with the COVID-19 pandemic doubling business for food delivery apps. Even on a smaller scale, Refraction AI can testify to the surge in demand for contactless delivery. We’ve seen delivery orders increase almost fourfold since March 2020. Despite the risks associated with the use of artificial intelligence, restaurants will continue to develop the technology because they believe the benefits surpass the drawbacks.

Restaurants are also using AI to help run, manage and implement their business. For instance, Using Artificial Intelligence properly, restaurant owners can precisely project their inventory, staffing needs, and sales for holidays and events. AI systems revolutionize the way restaurants operate and help assure that inventory is on hand and that theft and waste are controlled while monitoring for product shortages. More restaurants are looking to combine AI and their hardware and software systems for timely business intelligence from a single easy-to-use interface. Orders can then be routed to vendors, orders placed and inventory replenished, without the need for manual processes from the operators.

Brands are also turning their technology onto their menus, using AI-powered analytics to drive higher sales thru dynamic personalization. Customers can be prompted to order from a kiosk or virtual board integrated with a voice assistant and provided a dynamic menu display. Using AI, menus adapt to that customer’s previous orders, predicted preferences, or even weather and time of day to provide offerings unique to that experience. As visit frequency increases, the AI menu is better able to predict and offer unique menu items for that individual guest, creating opportunities for automatic upsell offers. The idea of AI-powered menus provides unique advantages because of the personalization and customization opportunities that it yields. They also have causal patterns to higher rates of customer loyalty and retention due to their unique offerings.

Artificial intelligence (AI) is a hot topic in the world of customer loyalty, so it is important to understand the new relevance of technology for marketing and how it will affect your business. The customer experience is the sum of all interactions a customer has with their brand, and customer loyalty is the likelihood that a customer will stay with the brand long term. Customer loyalty is one of the most important facets of customer loyalty, because it reduces customer migration. With customer loyalty, consumers return to a brand because they trust the brand because of the quality of their experience. AI technologies such as machine learning and big data can help you understand and predict your customers’ future behavior better. With AI personalization, you don’t have to make assumptions on premises or market broadly – you can give your target group exactly what they want and need.

In our experience, it is impossible to create, scale and sustain the one-to-one aspect of true loyalty marketing at the current level without the disciplines and tools that are central to AI and machine learning. Merlin AI is a collection of sophisticated machine learning models that build recommendations for customer segmentation, personalized offers and delivery optimizations. With these three automated components in place, marketers can create a comprehensive campaign strategy that will help drive more visits, higher customer spend and increase customer lifetime value–all with less effort, and faster, better results. We work with your brand to identify areas that might benefit from AI technology and then help you build strategies that create recommended segments, provide offer recommendations, predict net sales from offerings, optimize send times for promotions and measure results based on control groups.

In the face of digital change and changing markets, brands need to develop strategies to increase customer loyalty and retention. Businesses need to be able to anticipate customer needs, which has many implications for the personalization and customization of products and services on a large scale. Punchh is the only unified marketing platform for both customer acquisition and lifetime value growth. By integrating with existing point-of-sale and online ordering systems, Punchh collects online and in-store data and joins it with powerful machine learning capabilities to turn anonymous guests into known customers and brand superfans.

Learn more about how Punchh helps brands gather first-party data while providing data protection through loyalty program protocols and safeguards. See a demo for the details and check out why brands of all sizes trust the Punchh Loyalty, Offers & Engagement Platform.