As restaurants become increasingly digital, the industry is facing the same challenges that some of the world’s largest businesses faced when they first became reliant on technology.
One key challenge is the need to unify disparate solutions, and restaurant technology company Curbit, which specializes in dynamic order throttling tools using artificial intelligence, is targeting this opportunity. In an interview with PYMNTS’ Karen Webster, Francis Dougherty, who recently became CEO of the tech company after nearly 22 years at Microsoft, discussed this shift.
“From my time at Microsoft, it’s very reminiscent of the earlier days of digital transformation in some of the largest enterprises around the world,” he said. “They had a collection of technologies, … but it took an army of people to keep them together. Now, when you take a look at … the restaurant business, they have some of the same challenges. They invested in technology to survive during COVID. They all work, but they don’t necessarily all work well together.”
Drawing on insights from his experience at Microsoft, where he worked on digital transformation projects across various industries, Dougherty noted key trends across all of them. For instance, executive sponsorship, scorecarding and sufficient funding are key.
While the restaurant industry heavily relies on the franchise model, making it more difficult to maintain consistency, Dougherty said providing franchisees with purpose-built tools and technology will create a more even experience and improve overall brand performance.
Also making it difficult to provide a unified experience is the rise of disparate ordering channels. Between direct platforms and third-party delivery services like DoorDash, Uber Eats and Grubhub, restaurants are challenged to manage incompatible channels while providing a consistent experience to their customers.
Dougherty said AI is key to managing these disparate systems and maintaining a strong brand across the board.
“Algorithmically, there’s too much variability between restaurants, locations, brands, people — people is always the toughest part in any kind of digital transformation,” he said. “… What we’re able to do is give pretty objective information about what’s happening in the kitchen [and] to provide data for remediation.”
Third-party aggregators account for only a small — but far from negligible — portion of total restaurant purchases. According to PYMNTS Intelligence gleaned from a survey of thousands of consumers for the “Connected Dining” series, 5% of restaurant customers placed their last order via an aggregator.
Overall, however, digital ordering now makes up a significant share of total restaurant sales. PYMNTS Intelligence’s study “Consumer Interest in an Everyday App,” created in collaboration with PayPal, revealed that 1 in 4 U.S. restaurant customers exclusively orders food using internet-connected devices. Plus, another 36% do so both via traditional channels (in person or by calling) and via internet-connected devices.
A separate PYMNTS Intelligence study last year found that almost 55% of all restaurants have implemented curbside pickup and 50% have adopted mobile order-ahead.
Amid this digital shift, Dougherty noted that solutions such as Curbit can play a role in improving omnichannel performance. He cited the example of Smashburger, where 30 of the restaurant’s locations used the restaurant technology company’s tools and 30 did not. In the locations that used the tech, the solutions improved time to pick up by 84% and boosted customer reviews by 11%.
“We were able to show, at a brand level across all of these locations, [which] locations [were] performing really well and [which] needed help,” Dougherty said.
As the restaurant industry moves forward, there is a growing demand for technology that can enhance the guest experience, improve operational efficiency, and provide valuable data for decision-making.
Curbit, for its part, has focused primarily on pickup, but with technology coming to occupy a growing role in the industry, including with on-premise technologies such as QR codes, Dougherty said there is opportunity to expand into new occasions.
“All of those are starting to happen now, where digital ordering is going to be the dominant focus, and all of that requires some level of feedback to the guest,” he said.
Dougherty said he sees the guest experience as the driving force behind the adoption of AI technology in the restaurant industry. By leveraging AI tools, restaurants can personalize and enhance the dining experience, manage customer expectations, and implement dynamic pricing strategies — for instance, pricing items lower at off-hours times to draw in a more consistent flow of customers.
In the coming years, Curbit’s focus will be on scaling and execution. The company aims to make its technology more accessible to a greater number of restaurants as well as to players outside the industry with a stake in restaurants’ success.
“We want to make it so that every franchisee, every brand, sees value in what we’re doing,” Dougherty said, “and … [to offer] the things that we see we can do with data to, say, the consulting community, so they can actively go out and do things like revenue optimization. … So, that’s really the 2024 focus.”
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