Much as it has, and continues to do, in retail, the mobile internet revolution is fundamentally altering the foodservice industry’s relationship to the consumer. As a wider array of restaurant meals become available outside restaurant outlets, the role of the outlet is evolving, from a sole point of contact to a branding/experience/new product discovery hub within a broader “omnichannel” strategy. At the same time, the endless demands on consumer attention brought by the smartphone have made unique, compelling restaurant experiences a vital part of branding for a growing and varied group of players, both operators and suppliers alike. Finally, technology has created opportunities for new players willing to rethink every aspect of the experience, from delivery-only “virtual” restaurants to fully-automated production, and beyond.
The rise of the smartphone is changing everything
Smartphone penetration has soared from 15% of the global population 10 years ago to nearly half by 2020, and could begin to accelerate again as adoption takes off among lower income consumers in emerging markets. By contrast, passenger car ownership has expanded at a far slower rate. While a car is obviously a greater financial outlay than a phone, the importance of both to many consumers’ lives is comparable, and in dense urban areas the smartphone is winning out.
For the global restaurant industry, this is a signal that change is coming, and soon. If the car defined the US fast food boom in the mid-20th century, it is the smartphone which will define it in the 21st. Smartphones are becoming centres of consumer commerce, branding, social interaction and, above all, attention. As consumers’ lives are increasingly lived on or through their smartphones, the ability of an operator to live there as well – through branding, social media, online ordering/payment and delivery – will determine much of their success.
The battle for delivery
Alongside restaurants and suppliers are a burgeoning global crop of delivery providers, buoyed by massive growth in smartphones and mobile payments. The key differentiating factor among the new crop of delivery players is integration/aggregation, from aggregating restaurants which provide delivery, all the way to a “restaurant in the cloud”, with no physical location and with a small, curated menu designed for delivery. In the end, the user experience is likely to decide which model wins, with a real chance that “delivery 2.0” players like Postmates could be caught in the middle, as they face a difficult hurdle in converting non-delivery clients to a delivery experience which drives repeat business.
Restaurant delivery model
Source: Euromonitor International
Automation touches every part of the experience
The rapid increase in investment – specifically technological investment – in the restaurant industry in markets like the US has created radical new possibilities for automating the restaurant experience. This is typified by new concepts like Eatsa, a nearly fully-automated restaurant that combines touchscreen ordering with robotic food preparation. Much as in other industries, the next 20 years is likely to see a radical rethinking of the role of human workers in the restaurant experience – less about production, more about design, service and menu planning.
Wage growth in the global restaurant industry can create a positive feedback loop in this regard, with higher labour costs creating incentives to increase productivity through process innovation, while higher incomes (the logical flip-side of large-scale wage growth) create space and demand for new models. Going forward, staffing levels in the average restaurant could decrease, while the range of concepts is likely to expand dramatically.
With the advent of drones and, potentially, driverless cars, the “restaurant in the cloud” could become a largely automated affair, a “meal factory” with people driving branding, marketing and menu innovation. Such developments are likely to be years off, but the threat to incumbents is real. A vast existing outlet base can prove both a blessing and a curse, particularly as delivery expansion changes the calculus for what makes the right restaurant site.