Restaurant tech adoption, consumer preferences ambiguous, but opportunities abound
A study by New York-based corporate advisory firm AlixPartners finds tech is not a clear enticement to draw in customers to restaurants . The study, conducted in February and released in April, notes that 42 percent of Millennials see tech as influential in deciding whether to patronize a restaurant, compared to 18 percent of Baby Boomers, representing a significant generational gap. The top two technologies influential as a draw to restaurants are online ordering and Wi-Fi, selected by 40 percent and 35 percent of respondents, respectively.
Surprisingly, 42 percent of consumers indicate never using mobile tech for dining out.
Loyalty programs are not as significant in influencing a decision where to dine-out as touted in other previous studies. Only 19 percent of respondents see loyalty as influential in the decision, but it is up from about 14 percent a year ago. Forty percent of respondents have not signed up for a restaurant loyalty program. Those diners who are using loyalty, there is more apparent regular use as 36 percent of consumers are indicating they are using two or more loyalty programs regularly, up from 31 percent a year ago.
“There still doesn’t appear to be a lot of consumer ‘pull’ for many technologies, as food quality and price trump everything else, says said Eric Dzwonczyk, managing director for AlixPartners, in a statement. “On the other hand, though, Millennials generally crave new technologies, so going forward the challenge may be how to balance diverse technologies preferences across consumer groups, without compromising service and operations along the way.”
Restaurant delivery mainly driven by quality and price, not convenience
There’s a big opportunity for operators increasing their participation in and quality of their restaurant delivery programs. Fifty-percent of Millennial consumers prefer call-ahead (or scheduled) delivery and 46 percent of Baby Boomers say that they’re more interested in traditional “in-the-moment” delivery ordering. Nearly three-quarters of those surveyed say that they often order from a single restaurant and 53 percent cite the main reason for that is a limited amount of options.
As restaurant operators consider advancing or starting delivery options, owners and managers should note that only 8 percent of consumers prefer third-party delivery and 72 percent want delivery directly from the restaurant, a seemingly-surprising revelation. Food quality (63 percent) and food price (57 percent) are the main factors impacting the decision to order delivery from a particular restaurant.
Price is also a factor swaying consumers away from restaurants to select competitive like-selections from grocery stores and convenience stores. 56 percent of consumers rated price as the top reason for selecting ready-to-eat (prepared meals) from grocery and convenience (22 percent) as the secondary reason.
Because the quality of food is such an important factor in the decision to order delivery, Kurt Schnaubelt, managing director at AlixPartners says “All the companies today putting investments into the third-party and other delivery programs might want to step back a bit and look at their operations holistically, with an eye on packaging and available technologies as well as delivery,” He further notes that operators should pay attention to how well the food travels and to maintain control over the entire process.