Restaurants Lag Behind Retailers in Showcasing Digital Inventory

The restaurant industry may have been significantly slower to digitize than retail — but today, the need for a strong eCommerce presence is a given for most eateries. Yet, given the rapid acceleration of online ordering adoption, restaurants did not have the time to take a slow and steady approach to establishing their digital presence. What were once makeshift solutions, such as reliance on third-party delivery services during lockdown, have already become core to many restaurants’ businesses.

Findings from PYMNTS’ 2021 Restaurant Readiness Index, created in collaboration with Paytronix, show that restaurants now generate 16% of their revenue through aggregators — a greater share than is generated by in-restaurant, pickup, mobile order-ahead, outdoor dining and delivery through the restaurant’s own platform or phoned-in delivery orders.

Read more: Average Quick-Service Restaurant Now Takes up to 75% of Orders Remotely

Now, restaurants have the opportunity to rethink their digital presence, learning from retailers how to manage an eCommerce business that is both profitable and appealing to consumers.

“At the beginning of 2020, only [around] 37% of all restaurants were doing any off-premise at all,” Brendan Sweeney, CEO and co-founder of Popmenu, told PYMNTS in an interview. “But now … as we get to whatever normal looks like after this, there’s no restaurant out there that won’t need third-party ordering as part as a revenue stream for their business and as a user acquisition stream. It’s going to be there, and so you might as well do everything you can to make it as efficient as possible [and] as profitable as possible.”

Popmenu, an online menu management solution and customer engagement engine, announced last month that it is acquiring third-party ordering management tool OrderNerd, aiming to integrate the latter’s technology into Popmenu’s increasingly comprehensive suite of restaurant technology tools.

The Missed Menu Opportunity

One of the central ways that restaurants lag behind retail, Sweeney argues, is that they are underutilizing their menus. “[With] most things we buy as consumers … you always have all of this decision criteria at your fingertips,” he said. “I mean, how much is on one page in Amazon?”

Sweeney noted that typical retail eCommerce pages include reviews and ratings, photos, and related recommendations, among other information. For restaurants, meanwhile, menus are asked to fulfill a range of purposes — making a sales pitch, giving information about inventory and showing off the restaurant’s plating and ingredients, among other functions. He argues that by limiting menus to texts, restaurants are impeding consumers’ ability to engage.

“People don’t recognize just how powerful [the menu] is,” he said. “This very sensual business, which is taste and smell and sight and atmosphere and all of this, is being represented by text … It’s not compelling.”

For its part, Popmenu began as a menu tool, but as restaurants have increasingly come to expect comprehensive solutions that meet more of their digital needs, it has grown to include website design capabilities, remarketing features, front-of-house solutions and off-premise tools.

Phoning It In

“There are so many very simple problems that every other modern business has a tool or a solution for that [restaurants] don’t,” said Sweeney, highlighting the example of phone call management.

He explained that while most consumers only call retailers on rare occasions, if ever, restaurants still have phones ringing all day with consumers asking questions about dietary preferences, table availability, dress code and more. With the current labor shortage, it has been increasingly difficult for restaurants to accomplish all the tasks necessary to keep the business running while also answering callers’ questions.

Popmenu’s goal, like many other ResTech companies, is to provide a suite of solutions that meets as many of restaurants’ needs as possible — and as such, the company has a new product that uses artificial intelligence (AI) to streamline phone answering.

Across the industry, solution providers have been turning their focus from creating tools that meet consumers’ daily needs to those that meet more of restaurants’ internal needs, streamlining the process for managers.

Read more: ResTech Providers Shift Focus from Consumers’ Needs to Restaurants’

Anyone’s Guess

In the next several years, Sweeney believes that restaurant technology, both consumer-facing and internal, will be increasingly predictive. In addition to believing that streamlining digital ordering with recommendations informed by past behavior and similar customers’ preferences, Sweeney also expects that this optimization of data-informed predictions will have a major impact on procurement, allowing restaurants to purchase closer to the exact amount of ingredients they will need.

These sorts of changes could be key now, at a time when supply chain disruptions are inflating prices and making it more difficult to stay stocked. If restaurants can make more informed decisions in their buying, it could streamline the industry’s entire supply chain.

“It’s less food waste for restaurants,” he said. “There’s just an optimization between buyer and seller that I think is going to really accelerate over the next few years, because a lot of base-level tech stuff got put in place during COVID.”