Roughly 65 percent of restaurant franchisees believe increased automation and a more widespread use of mobile apps for ordering will greatly impact the restaurant industry in the future, according to TD Bank’s recent Restaurant Franchise Finance Group survey data emailed to The Spoon.
The survey polled a select group of restaurant owners, operators, and executives from multi-unit restaurant companies, both independent and franchised, at the 2019 Restaurant Finance & Development Conference that took place in Las Vegas this past November.
Among the survey’s findings, nearly two-thirds of respondents believe more automation and mobile loyalty apps will “alter the restaurant landscape.” The survey specifically mentions self-service kiosks and mobile apps as technologies driving this change. In a statement, Mark Wasilefsky, Head of the Restaurant Franchise Finance Group at TD Bank, deemed technologies like self-order kiosks “necessary to compete” for restaurants.
One doesn’t have to look far to see such technologies already been widely implemented in restaurants, particularly QSRs and fast-casual chains. Shake Shack, Dunkin’, Sweetgreen, and many others already include kiosks as an option for customers when ordering. Many more in addition to those chains offer loyalty programs through their own mobile apps.
Wasilefsky noted that “Industry leaders expect these technologies to grow in popularity, driving a ‘trickle-down’ effect, where smaller local and regional chains consider adopting these offerings to meet diners’ preferences.”
Mobile apps are, of course, a key part of any delivery strategy these days — and there are plenty of delivery strategies now. In TD’s survey, 85 percent of respondents said they had a delivery strategy, up 10 percent from 2019. Fifty-two percent said delivery comprises “up to” 10 percent of their overall sales, while 20 percent said delivery accounts for more than 20 percent of their sales.
That number will keep rising, thanks in no small part to third-party providers like Uber Eats and DoorDash, who by some accounts will make up 70 percent of restaurant deliveries by 2022. Wasilefsky noted that the cost of delivery is decreasing as “third-party providers become more efficient and larger operators are able to negotiate more favorable deals, there is tremendous potential for operators to use delivery to account for a larger percentage of their businesses,” Wasilefsky said.
Not talked about in the survey, however, is third-party delivery services’ impact on smaller restaurants and the growing litany of controversies and complaints the businesses have with these services. Multi-unit restaurants like the ones polled for TD’s survey tend to have more leverage (aka money) when it comes to negotiating contracts with the DoorDashes and Grubhub’s of the world. As for the rest of the industry, including the mom-and-pop shops with shallower pockets and less negotiating power, the impact of automation and mobile ordering seems a little more up for question at the moment.
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