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5 (wrong) reasons slowing restaurants from going digital

Identifying obstacles to going digital and overcoming them.

Sponsored by OLO

Restaurant operators are more interested than ever in technology solutions, but pressing problems, such as rising food costs, supply chain challenges, labor issues, and lackluster consumer confidence, have caused many operators to push tech investments to the back burner. As a result, digitization has not yet become the status quo in foodservice.

According to The NPD Group, in the year ended December 2022, the majority of restaurants were only moderately digital, generating just 15% of sales through digital channels. Here are five obstacles preventing restaurants from going digital and how to move past them.

1. Our budget is too small. Nearly three-quarters (74%) of operators cited “limited budgets” as the biggest barrier along the path to a state-of-the-art tech stack, according to Nation’s Restaurant News’ 2023 Restaurant Technology Outlook report. Yet, even when resources are limited, brands of all sizes and sophistication can move ahead toward digital transformation. The key to getting there on any budget is choosing partners who know exactly what services are most helpful, who meet your brand wherever it is on the path to digitization, and who can develop a roadmap to help get there. For example, rising fast-casual Sweetgreen has seen rapid growth in digital sales—67% of its 2021 total revenue—since implementing Olo's online ordering and payment solutions.

2. Digital equals impersonal. Many operators still hesitate to invest in digital out of concern of losing that personal touch—the entryway handshake, the word-of-mouth marketing, and the everybody-knows-your-name experience. While it might seem that digital detracts from that on-premise experience, in fact on-demand digital solutions offer operators even more ways to get personal with their customers—and that’s exactly what today’s digital-first consumers expect (thanks, Amazon, Netflix, and Google). By collecting and analyzing transactional and behavioral data, restaurants can go well beyond knowing their customers' names. They can better understand their preferences, and then serve up tailored recommendations based on previous orders and lookalike guest preferences, dietary preferences, and predictive analytics.                                 

With recent research from Zippia revealing that four in five Americans own a smartphone, and average nearly six hours a day on their mobile device, checking it roughly once every 10 minutes, it’s clear restaurants need to meet today’s customers where they are, and most of the time it’s not on-premises.

3. Online ordering is enough. That might have been true back in 2003. But in 2023, having online ordering or a mobile app is merely the price of entry. To be successful in today’s competitive market, operators need to lean into digital innovations and optimize them for modern consumer behaviors. For example, using digital innovations like SEO-friendly local listings not only helps people find your business but very likely leads to greater sales.

Recent research from Safari Digital reveals that “near me” searches have increased by 500% over the past several years, and 78% of local searches on mobile devices result in a purchase. And that’s just the tip of the innovation iceberg.

4. Restaurant staff needs to be tech-savvy. Given that the restaurant industry workforce remains below pre-pandemic levels, the thought of needing to recruit staff with an entirely new set of skills can seem an uphill task for operators. Fortunately, many tech platforms designed for restaurants are built to address this exact problem; they’re intuitive and easy to use, even for non-tech savvy staffers among your team. Using devices and platforms that resemble those staff are already familiar with—such as smartphones and tablets—make it easier to integrate and even upskill when needed. Plus, digitization increases efficiency, and streamlines operations in so many ways—from faster execution of orders in the kitchen to simplifying and expediting payments in the front-of-house— so your staff can focus more of their time on your guests.

5. Digital transformation can wait. With the majority of restaurants having already adopted some digital strategy, operators who are still on the fence need to act now to stay competitive. In fact, the current level of digitalization is fast becoming the new normal, and more digital innovations are in the very near future. The truth is, the longer you wait, the further behind your competitors you could potentially be. Of course, just because you haven’t yet started, doesn’t mean you can’t catch up.

“Other QSR brands were so much further along in their digital evolution,” says Phil Crawford, chief technology officer, CKE Restaurants Inc. “Olo allowed us to get caught up quickly without having to build it all from scratch. The speed to market and the true partnership that we’ve fostered over this short time have made Carl’s Jr. and Hardee’s digitally relevant.”

>Ready to lean into the digital transformation? Download A Buyer's Guide to Future-Proofing Your Restaurant Tech Stack to get a leg up on the race to 100% digital.