Restaurant experts weigh in on 2023 trendsQSR Web

The last three years have been tough on the restaurant industry, but things are looking up. More diners are choosing to return to dine in-house while off-premise dining continues to boom.

What will 2023 bring? We talked to several restaurant-industry experts to learn their predictions for the New Year ahead.

Operations will continue to be simplified despite digital experiences expansion

Chris Adams, VP of strategy for Oracle food and beverage, said in a similar vein to tightly integrated systems across the business, we expect to see brands pursue simplification across all aspects of operations from how they manage payment processing to how they manage their digital expansion.

“End-to-end payment processing removes complexity and PCI compliance demands for operators,” Adams said. “Having a single supplier and point of support for all the store technology and payment processing functions also reduces administrative burden and risk. In addition, we see the point of sales platform as taking on more of the master data management role of the business, and configuring all the content needed for any digital experience from a single platform.”

Partnering with gaming publishers

As inflation and labor challenges continue to cut into restaurant margins and test the staying power of newer food service operations, many brands are adopting new marketing strategies to reach and grow their customer base in a privacy-safe but personalized way, said Dennis Becker, CEO of Mobivity.

“While the biggest brands are already extending their marketing into gaming to reach the 200-plus million video and mobile game players in the U.S., restaurants of all sizes are tapping into new technologies to promote their loyalty and mobile order apps with in-game rewards, offers and other real-world rewards to gamers,” Becker said. “Partnering with gaming publishers — directly or better yet, through a partner networked to the publishers — is a win-win proposition for restaurant operators as gaming publishers are also trying to reach a similar audience.

“This idea of not only connected partnerships but connected rewards between brands and game publishers enables brands to offer consumers a publisher-funded ‘discount without discounting.’ The challenge for brands will soon be identifying and securing the best gaming inventory connected with their brand to drive new guests and increase guest frequency.”

Charting a new high-low strategy

Inflation continues to impact consumer spending, making it imperative for eateries to find new ways to demonstrate that value doesn’t have to come at the cost of quality, said Phil Quackenboss, VP of restaurants and growth at Fetch, a rewards app and engagement platform.

“For example, rather than giving heavy discounts on items they’re already seeing margin hits from, restaurants can incentivize customers to purchase other items that provide better returns,” Quackenboss said. “Related, restaurants can look to new ways to offset pressures on margins by leaning more into higher-margin offerings like catering and delivery direct through owned channels vs. third party delivery.”

Expand customer loyalty

“This year, despite tough economic conditions, many restaurants didn’t necessarily see a drop in topline sales,” Quackenboss added. “Instead, they suffered drops in visit frequency. So the sales growth restaurants did see wasn’t a function of selling more food — it was a function of selling the same amount (or less) at higher costs. In 2023, companies should lean into growing brand loyalty and engaging even more deeply with existing customers as they look to offset drops in visit frequency in the category.”

Hiring and training

Restaurants “are currently seeing more people applying for jobs versus last year this time,” said Salar Sheik, principal and founder of Savory Hospitality Consulting. “This gives us hope for the coming year for restaurants to fill the vast amounts of positions that are left empty to this day.”

Carol Leaman, CEO of Axonify, said 2023 will bring an increased investment in frontline training frontline training.

“The past year has shed light on the treatment and experience of frontline workers, especially service industry employees at fast casual establishments,” Leaman said. “From hostile customers to staff shortages, staff members continue to face unexpected and risky scenarios. Brands are starting to more clearly see that the training and upskilling of this essential workforce will improve the worker experience, resulting in higher employee retention and positive customer interactions. Mobile accessible, digestible content and continuous training are key factors business leaders should prioritize, especially considering only 37% of workers say they have yet to receive training for handling dangerous or challenging events. The emphasis on supporting, upskilling and training frontline workers is a necessity for businesses that if overlooked, will result in negative business outcomes.”

Ordering and payment at the table

Two major problems are facing the restaurant industry today — increased labor costs and a labor shortage, said Peter Dougherty, GM of hospitality at Lightspeed Commerce.

“In light of these challenges, we expect to see an increase in restaurants using technology to enable ordering and payments at the table, which reduce labor costs without negatively affecting the guest experience,” Dougherty said. “Other technology like QR codes at the table have also shown to increase tip size and allow staff to handle more tables. In addition, people are more likely to order more when they can do so directly at the table, without having to wait for staff to return. Technology and automation not only reduce labor costs, but also allow staff to make more money, helping with retention as well.

“The adoption of analytics, fueled by payments data, will allow operators to better understand their customers and provide more personalized loyalty programs. Offering customers personalized rewards often have a greater return on investment for restaurant operators as well.”

Autonomous delivery

Sterling Douglass, co-founder and CEO of Chowly, said 2023 will be an exciting time for restaurant technology companies and restaurants eager to implement autonomous delivery into their business.
“We will see regulatory authorities in suburbs and larger cities permit drone deliveries and allow for the first small-scaled test markets,” Douglass said. “Autonomous delivery either through self-driving cars or drones has a long way to go, but important milestones will be hit in 2023.”