Deep Dive: Why Technology-Forward Restaurants Are Adopting Digital POS, Menu Management Software

The COVID-19 pandemic is disrupting dining trends, and restaurants need to prepare for restored and enhanced table service operations once COVID-19 containment and response efforts no longer compel social distancing. Consumers in more normal times show strong preferences for technologies that allow them to place orders digitally via apps, kiosks or other tools while inside restaurants, and many eateries had been looking to infuse digital ordering into their dining-out experiences before the coronavirus hit.

The U.S. is home to more than 1 million restaurant locations that collectively were expected to see $899 billion in sales in 2020 — a 4 percent increase over the prior year. This can be a challenging industry even in normal times, however, as these operations face slim profit margins of 3 percent to 5 percent on average. Some eateries have therefore been looking to digital technologies to get the most impact out of each customer visit.

Demand for technological assistance is high, with 84 percent of restaurant professionals saying point-of-sale (POS) systems are critical to their operations and 45 percent saying the same of their inventory management software, according to a 2019 report. The right tools can help restaurants reduce their operational costs while encouraging consumers to buy or visit more frequently, once in-store service again becomes safe.

This month’s Deep Dive explores how popular solutions for digital ordering, payments and menu management are making a difference.

Speeding Service With Digital POS

Technology has its perks in any industry, with companies implementing new products to improve their operations and reduce inefficiencies. Eateries have been turning to digital POS solutions to accelerate ordering and payment processes and serve more customers once they restore table service. These venues can adopt handheld devices, countertop-mounted terminals and self-serve kiosks to accelerate ordering, reduce lines and make table service more efficient.

Full-service restaurants can equip front-of-house workers with handheld terminals loaded with cloud-based software, allowing them to send orders to the kitchen on the fly, eliminating paper tickets by transmitting orders directly to digital in-kitchen displays. This can improve order accuracy, as kitchen workers are spared from having to decipher waitstaffs’ handwriting and keep track of tickets.

Such solutions enable waitstaff to serve more customers, too, earning them more money in tips and providing the restaurant with more revenue. Mobile POS solutions prevent servers from having to trek to the back of the house or to stationary terminals and allow them to care for more tables. A 2016 report found that going from serving three tables per shift to four can boost revenue by 20 percent to 25 percent.

Waitstaff can use digital POS devices to accept payments at the table, too, saving them from having to make multiple trips to ask diners if the bill is needed, return with it, accept payment cards and return them to the table. This more streamlined workflow can remove undesirable time lags, building loyalty, and some POS terminals even let diners split bills and pay with digital wallets or contactless cards for more convenient experiences.

Full-service venues are not the only companies adopting digital POS solutions, either. Quick-service restaurants (QSRs) are deploying countertop-based touchscreen devices, on which customers can quickly swipe, tip and pay, as well as self-serve ordering and payment kiosks. These technologies can ensure order accuracy and reduce lines that otherwise might deter some customers.

Managing Menus

Digital ordering systems could impact what customers are offered as well as what they buy, helping restaurants better manage their menus and tailor offerings to focus on high-demand items. Such functionalities are used frequently, with 31 percent of surveyed restaurant professionals updating their menus every month, 25 percent doing so weekly and 24 percent updating seasonally. Digital POS solutions’ cloud-based software can also track which selections are purchased most often and when, assisting food service companies in identifying customer favorites that should be retained during menu changes. This data will help determine which ingredients to order more of to prevent low stock and which high-traffic times may require more staff on hand.

Eateries that make changes to their meal offerings and prices can also take advantage of cloud-based menu and POS software to launch updates to all their venues at once. This can be done automatically at prescheduled times and ensures smooth coordination across stores, which can be critical to managing various locations.

More than 100 million consumers in the U.S. in 2019 followed dietary restrictions — food allergies, intolerances or other preferences — leading some restaurant technology providers to highlight digital menu filters that help consumers only see items that comply with their dietary needs. Customers can scan in-store QR codes to visit webpages on which they can enter their restrictions and see menu options tailored to their needs. Restaurants can also use artificial intelligence (AI)-powered apps to analyze customers’ purchasing behaviors and offer better recommendations, which might encourage greater purchasing.

Restaurants must be careful when rolling out these tools, however. Consumers may enjoy convenience, but they are also concerned about privacy. A 2020 report stated that 56 percent of surveyed consumers “strongly agree” that they would like more insight into how restaurants use their personal information, for example. Just 37 percent of respondents expressed confidence that their data would not be misused. Food service companies can assuage such fears by providing clear explanations about how they use such data and that doing so enables experiences that consumers find valuable.

Restaurants operate in a competitive market, and adopting the right kinds of technology-powered services can help them stand out. The industry’s low profit margins make it all the more important that these businesses carefully choose their digital investments to ensure maximum impact. POS tools that provide faster, more accurate order acceptance and software to help manage and track menus can be key places to start — and help eateries keep up with consumers’ demands.