Technology has been at the forefront of change in business, and in life, for hundreds of years. From the creation of the combine harvester to help with farming, to the internet making everyone virtual, technology is usually the force for change. When considering how PESTLE, or any external business environmental analysis, effects businesses, technological and social change are the true drivers when it comes to change in business. Certainly some changes have more impact than others. It is unlikely that any of the changes in the next few years will be have as much of an impact as the washing machine or the internet did. However, change is important, and one universal truth is that technology will keep advancing in the years to come. The restaurant sector is no different.

So what are the emerging technologies in the restaurant sector?

Mobile phone app usage is proving to be the biggest development for food businesses.

Convenience is key

Technology has played a key role in the UK restaurants market in recent years, with significant advancements in mobile technology and the rise of social media have seen the dining out experience become increasingly virtual, convenient and accessible. Many leading brands, especially those in the quick service sector, have adopted the use of apps as a key means of widening their target audiences and opening up new avenues of growth. Companies such as Burger King, McDonald’s and Nando’s have introduced their own apps, thus enabling consumers to have an account, accumulate points, get access to deals and view detailed nutritional matters and advice.

– KeyNote (2016)

KeyNote suggests that advancements in apps and social media are the big current technological changes. This is evident to see, with rewards systems such as Nando’s Chilli Collection (Nandos, 2017) taking full advantage of the advancing gamification trend, i.e. using apps and games as a platform to reward repeat purchase and customer loyalty. Quick service sector brands are becoming increasingly tech savvy, with McDonald’s  as the clear example of “self-service” machines popping up around the globe (PCmag, 2016), although this is likely an attempt to reduce staff overheads, rather than embracing change. However, a lesser known feature of this self service is that Mcdonald’s have devised an app, essentially working as an online menu, similar to self service machines, except you don’t have to leave your seat. Convenience really is key!

However, self service and increased “technologicalization” of businesses will see less and less friendly staff, which is really a key USP of more “restaurant-like” restaurants. It is unlikely that many mid-to-high tier establishments will introduce self service any time soon.

What technological changes are effecting all restaurants?

The biggest change that technology has had on the market is that it allows untold convenience for consumers. But what is more convenient than not leaving your seat in a restaurant? Not leaving your bed, that’s what.

Apps have resulted in a rise in the number of consumers ordering food for delivery. This seems like a relatively old trend, but the truth is that it has started booming further than ever before. Apps such as Deliveroo and UberEATS have driven sales across the market by delivering hot restaurant meals to consumers doors with the click of a button. This is no over-exaggeration, with JustEat you can get food to your door in less than four clicks if you have used the app in the past.

Here is an example, Domino’s recently announced the launch of a gamer-oriented application, which is open to UK consumers and utilises Microsoft’s latest console: the Xbox One. Gamers can bring up the Dominos menu through the use of hand gestures or by saying ‘Domino’s, feed me’ to the console, thereby using its voice recognition capabilities; the application also features an on-screen order tracker, providing customers with a clearer indication of when their food will arrive. (Telegraph, 2014).

Make no mistake though, eat in restaurants are still the dominant sector by far, but the delivery market is taking out more of a chunk every year. (Keynote, 2015)

Conclusion 

Technology can change the face of many businesses. Realistically though, the restaurant sector is currently coming off quite lightly. With things like automation in driving waiting in the wings – which is likely to put tens of thousands of drivers out of jobs – restaurants aren’t seeing too much of a change. But comparisons can often be misleading. The restaurant market is changing as much as most other sectors, and if companies do not begin to adapt, they will die with the generations. Large companies are always ahead of the curve when it comes to expensive technology, but how will smaller companies fare? Only time will tell.

References:

Keynote (2016). Online at: https://www.keynote.co.uk/market-report/food/restaurants?page=8 Last accessed 17.09 06/04/17

Keynote (2015). Online at: https://www.keynote.co.uk/market-report/food/fast-food-home-delivery-outlets?full_report=true Last accessed: 18.49 06/04/17

Nandos (2017). Online at: https://www.nandos.co.uk/card/how-it-worksLast accessed 18.19 06/04/17

PCmag, (2016). Online at: http://www.pcmag.com/news/349707/mcdonalds-pilots-mobile-ordering-and-self-service-kiosks Last accessed 17.43 06/04/17

Telegraph (2014). Online at: http://www.telegraph.co.uk/technology/video-games/video-game-news/11242971/Order-pizza-from-your-Xbox-One.html Last Accessed 18.41 06.04.17

Deliveroo (2017). https://deliveroo.co.uk/

JustEat (2017). https://www.just-eat.co.uk/

McDonalds (2017). http://www.mcdonalds.co.uk/ukhome.html

UberEATS (2017). https://www.ubereats.com/london/

TripAdvisor is the biggest travel reviews website in the world. It makes nearly $1 billion in revenue a year and boasts more than 60 million members (Tripadvisor, 2016).  According to Business Insider (2015), TripAdvisor is powerful enough to have a large effect on economies. They state that TripAdvisor was “directly related to £1.7 billion of tourism spending in the UK. In 2012, that figure made up around 2.2% of all tourist spending.

TripAdvisor also invests heavily in SEO & SEM. With a simple search: “Hotels in Venice”, TripAdvisor appear at the top of the first page. It appears once in GoogleAds SEM and once through good SEO implementation. This is true of virtually any search with similar characteristics.

TripAdvisor is so popular because it makes so much economic sense. Basic economics tells us that the more information a consumer has, the better decision they can make (OECD, 2010), and Tripadvisor is in the market of information. People trust Tripadvisor because it is from the point of view of the consumer; the consumer goes to a location and posts the best or worst review of that location. There is no imperative or conflicts of interest, a consumers review on Tripadvisor is inherently trustworthy because it comes from a similar point of view of the reader.

A negative review provides business owners with an imperative and an actionable way to improve. A positive review shows business owners what area of business they can focus on to create a USP. TripAdvisor is also a useful platform for business to build relationships, increase repeat customer visits by replying to comments and gain exposure. The gamified aspects of TripAdvisors website means it is easy to understand and navigate. In many ways, TripAdvisor does it best, and is certainly very useful for companies.

Needless to say, Tripadvisor has a pretty powerful effect on the hospitality industry, but is it beginning to be overshadowed by Social media?

Facebook Inc. (Facebook, Messenger, Watsapp, Instagram) dominates the social media landscape (Image, Statista (2016)). If TripAdvisor was on this list, it would be second-to-last. This shows the mammoth that Tripadvisor must face. Is it being pushed into obscurity?

TripAdvisor is a specialist website, i.e. social media such a Facebook is a generic social media platform, whilst TripAdvisor has a specific purpose. This means that making comparisons to companies such as Facebook is moot, as it has a different purpose. However, Facebook has a habit of expanding its platform as far as it can go. “The Marketplace”, which is Facebooks attempt to codify and profit off of the many “buy and sell” pages on Facebook, is an example of this. Facebook already offers page support for businesses, allowing them to easily view and increase their reach. On these pages, there is a rating system which could easily replace Tripadvisor’s system. Facebook has more than 3ox the membership, and if anything has been shown by technology in the last 20 years, its shown that convenience sells. Facebook already has the groundwork to replicate TripAdvisor, if they improved it and placed it in one easy package (the Facebook App), by making it easier for people to compare local businesses in a specific area, and add helpful features to make it more “Tripadvisor like”, it could end badly for Tripadvisor.

Still, for now, TripAdvisor is here to stay. Take it from Lyle (2015):

“Great hotel rankings on TripAdvisor is more than for show. In reality, hotels with good rankings enjoy higher booking, higher average daily rate, and revenue. Hotels ranked number one on TripAdvisor earn a staggering 56% more direct bookings each month compared to hotels ranked 40th in their respective city.”

TripAdvisor needs to diversify to survive. This is the story of every company. TripAdvisor is at risk from massive competitors. Again, this is the story of many companies. Yet, something feels like TripAdvisor is in danger. Going up against the largest tech firms in the world is no easy feat. Will Facebook simply compete TripAdvisor out of the market, or will it follow the story of Instagram (where Facebook purchased it for $1B)? Perhaps the story for TripAdvisor is one of massive success. Only time will tell.

References:

Bighospitality (2012). Online: [bighospitality.co.uk/…/TripAdvisor-boosts-UK-tourism-and-raises-industry-standards-finds-study]. Accessed 18/02/2017

Business Insider (2015). Online: [http://uk.businessinsider.com/tripadvisor-affects-tourism-of-entire-countries-2015-3]. Accessed 18/02/2017/

Lyle, T (2015). Online: [http://blog.frontdeskanywhere.com/why-do-tripadvisor-reviews-matter]. Accessed 18/02/2017

OECD (2010). Online: [http://oecdinsights.org/2010/11/30/does-more-information-for-consumers-lead-to-better-choices/]. Accessed 18/02/2017

Statista (2017). Online: [https://www.statista.com/statistics/272014/global-social-networks-ranked-by-number-of-users/]. Accessed 18/02/2017

TripAdvisor (2016). Online: [http://ir.tripadvisor.com/financials.cfm]. Accessed 17/02/2017

Argos used Brandwatch to find out the much needed answers of its customers

“As a well established name on the UK high street with over 40 years of trading behind them, Argos knew its customers held certain expectations when entering stores. Would changing the look and feel of the familiar Argos store surroundings affect consumers? Would customers embrace the change or oppose it?”

Argos managed to use Brandwatch to find out what its customers wanted. Brandwatch proved to be a handy tool for Argos, but how?

Argos mainly used categories and rules to segment its market and manage the data. This allowed them to filter the data and work out what was happening in each individual store. It even helped Argos find out that location alone doesn’t reveal the precise stores people were talking about, and quickly amended this by adding a tag for each of their digital stores. Furthermore, Argos decided to break down this information and look into demographics. The yfound that Males tended to like the different aspects of their digital stores, whilst females focued on the new approach to customer service.

But what does this all mean in relation to companies and their handlings of data?

It was clear to Argos that they had an issue with knowing what was in store for them when it came to knowing what the customer wanted. By shaking up current store layouts – by modernising them – there will always be important opinions that customers form. Argos wanted to know those opinions. By knowing these opinions, by digesting large amounts of information in an efficient way using Brandwatch, they were able to use social insights to understand which stores were performing well for customers and which ones needed improvement. This is huge for the modern company.

Every large company are going to have stores that perform well, and stores that perform not so well. This is because in each area, there are different cultural and social dynamics such as prevalence of a multicultural-ness, prevailence of social groups like wealthy AB areas or less developed CD groups, and each area and each of these groups are going to react differently to the new stores. By using advanced analytics, Argos were able to understand these needs and cater to them. This is crucial for a modernised PR campaign and happy customer experience.