‘Innovate or die’: the conundrum facing a rapidly changing catering industry

Historically known to drag its feet when it comes to new technology, the catering sector is quickly playing catch up thanks to mounting competition and technological advances that are making it more accessible. Cloud-based tools have been leading the tide of change, with the aftermath of Covid-19 acting as the perfect catalyst to propel its more widespread adoption. Faced with tighter profit margins in recent years, F&B operators have woken up to just how strong the benefits are, from streamlined operations to delivering a more tailored customer experience and reducing waste. 

This momentum achieved in recent years shows no sign of abating. Customer expectations are changing while operators continually must adapt to new challenges, which in turn is transforming the playing field. More than half of the 8,000 restaurant operators and owners polled globally in Lightspeed’s State of the UK Hospitality Industry agree that adopting new technology over the past two years has been critical to their ongoing success. The most widely adapted tools this year include new or expanded online ordering, contactless payments, QR code ordering, and new POS and restaurant management systems. 

SaaS (service-as-a-software) technology has particularly gained traction as operators meet demand for quicker, more convenient, and time-saving transactions. These capabilities are enabling hospitality and catering employees to function more efficiently, enabling greater capability to provide a frictionless service, as well as alleviating pressure during periods of labour challenges. What’s more, widespread adoption of technologies like cloud-based EPoS systems means the concepts of cashiers and queuing are set to reduce even further as self-service channels (apps and kiosks) continue to proliferate. 

Despite the many benefits it brings, there is a growing (and well-publicised) fear that automation will replace human jobs. However, this simply isn’t true. Used properly, automation can alleviate time-consuming, mundane, and administrative tasks while improving efficiencies. In fact, 90% of restaurants agree that increased automation will allow teams to focus on more critical tasks. By freeing up employees from standing behind counters and tills, they can add experiential value by proactively supporting and greeting guests. The importance of this crucial human element cannot be understated.  

For hospitality and catering businesses, tech can also provide key insights and easy access to non-anonymised basket-level data that helps them make better, more informed decisions. This includes what products to sell, to what clientele, and at what time – to point to just a few. This in turn allows restaurant owners and managers to provide a better and more tailored customer experience. Through tracking orders and managing produce, venues can also plan resources and supply more effectively, reducing waste and saving costs. Ultimately, this results in greater sustainability, both environmentally and economically. 

Additionally, with the cost-of-living crisis – and persistently high food prices – customers are focusing their spending on where they are likely to garner the most benefit. As such, loyalty programmes have risen the ranks as a favoured means to attract and retain customers. 

Through EPoS systems or white-labelling apps, operators can leverage these benefits by providing customers with ‘rewards’ and ‘giveaways’ that feel unique. This is thanks to the software’s ability to analyse every individual’s purchase history and then promote specific meals and drinks to meet the individual preferences of each customer. This will enable operators to not only stay competitive, but also improve customer service over time, retain data for targeted marketing campaigns, and introduce loyalty and reward programmes on an ad hoc basis. 

The next few years will be absolutely critical in the industry’s evolution and it’s likely that we will see even more operators go fully digital. It’s imperative that the sector wakes up to the fact that customers everywhere now expect and demand these types of innovations, and that more competitors are embracing this change.