AI + Machine Learning

The Impact on the Industry: Artificial Intelligence in Restaurants

Learn how it’s impacting restaurant revenue and helping retain your best guests.
Amanda Hamel

As of 2022, Artificial Intelligence has become a regular tool in our lives. Innovative technology is on full display in many industries as it transforms the way we live our day-to-day lives. AI has changed the way we live and work. Businesses are thriving from the positive impact AI has sparked, and the change isn’t stopping anytime soon. The future of AI in business is bright, and for the restaurant industry, the use of AI is endless. This emerging technology is transforming the restaurant industry!

What is AI? 

Artificial Intelligence (AI) is the theory and development of computer programs that are able to do tasks and solve problems that usually require human intelligence. Advanced technology is capable of behaving in ways that both mimic and go beyond human capabilities. The simulation of human intelligence uses deep learning and machine learning to become smarter over time by processing real-time data. Some of the most recognizable AI can be seen on our own cell phones. This is shown each time we unlock our devices using facial recognition powered by AI. As well on our phones, we see artificial intelligence and machine learning in our day-to-day lives without even realizing it.

Machine Learning (ML) elevates artificial intelligence to the next level. It is a type of artificial intelligence that allows software applications to become more accurate at predicting outcomes without being explicitly programmed. The technology is a subset of AI that uses past data to identify patterns, make decisions, and continuously learn through experience. This type of technology has been a game changer for the restaurant industry. In a restaurant, the recommendation engines and algorithms created by machine learning will view trends in customer behavior that allows the software to suggest upsells autonomously and cross-sells as guests checkout via a restaurant mobile app or branded online ordering! AI and ML can be seen in every industry from food service to healthcare, and it’s continuing to grow!

Proactive vs Reactive

The use of AI in the restaurant industry has caused businesses to be proactive and make the changes needed to ensure their business doesn’t fall behind. When running a successful restaurant it’s important to stay up to date with the latest restaurant technology and strategies. Artificial intelligence has begun transforming the restaurant industry with its highly accurate prediction software that is allowing restaurants to be proactive with their business. 

Loyalty programs are a great way for restaurants to interact with their loyal guests. About 69% of guests said loyalty programs incentivize them to revisit more frequently. While traditional loyalty programs are very helpful assets for restaurant owners, they may no longer be enough to keep business booming. A large problem restaurants face each year is the loss of their valued customers. The average restaurant loses 30-40% of its best guests every year. That’s because they’re relying on traditional win-back campaigns that primarily take action after they have already lost the guest, and are only successful at attracting 3-5% of these guests back. 

Retaining existing guests and treating them right has become more critical than ever in the restaurant industry. On average it costs a business 5x more to acquire new customers than it does to keep existing ones. Implementing a strategy to prevent current customers from leaving before it happens will help boost your restaurant’s revenue. A report by the Harvard Business School claims that on average, a 5% increase in customer retention rates results in a 25%–95% increase in profits. An ideal customer makes repeat visits, but not everyone will easily become a regular. That’s why the proactive approach will put you ahead of your competitors time and time again. 

With the power of AI, you can have it all. A loyalty program to keep your best guests interested, and AI-powered prediction software to tell you when those guests may need some extra attention. Be proactive by targeting your best guests before they leave! Using our Churn Management product, restaurants can target at-risk guests using automated marketing offers and campaigns to turn these guests back into loyal customers. Our artificial intelligence engine is able to predict guest churn with 97% accuracy. We automate the process of reaching out to ensure they stay fans of your brand. With this proactive approach, you’ll never have to worry about losing your best guests!

Statistics of AI in Business

  • The number of businesses adopting artificial intelligence grew by 270% in four years. (Source)
  • 61% of employees say AI helps to improve their work productivity. (Source)
  • 62% of consumers are willing to submit data to AI to have better experiences with businesses. (Source)
  • 44% of organizations have reported cost savings as a result of AI implementation. (Source)
  • 3 in 4 businesses say it’s important for them to be able to trust AI’s analysis, results, and recommendations. (Source)
  • 48% of marketing leaders cite AI as making the most significant difference in how customers interact with them. (Source)
  • More than 9 in 10 leading businesses have ongoing investments in artificial intelligence. (Source)
  • AI technology was expected to create 500,000 more jobs than it was expected to replace in 2020. (Source)
  • Gartner predicts AI software will reach $62 billion in 2022 alone, an increase of 21.3% from 2021. (Source)
  • According to Semrush, the forecasted annual growth rate of AI between 2020 and 2027 is 33.2%. (Source)

The Future of AI in Restaurants

Artificial intelligence is an emerging technology with virtually limitless potential. Here are a few ways AI will continue to change the future of the restaurant industry:

Reduce Error: Artificial intelligence is programmed to be efficient and accurate. Using AI in your restaurant will help reduce the chance of human error that could result in a disruption in the workflow. When you make AI the key point of data entry for your guests, there won't be the risk of manual input errors. The technology will help provide a consistent experience throughout your entire restaurant, and won’t get fatigued doing time-consuming tasks repeatedly. 

This gives your employees more time and energy to be attentive towards higher priority tasks and ensures a high-quality experience! AI will boost employee morale which in return will help minimize human errors. It’s more likely that a worker will make a mistake when they’re feeling overwhelmed, but with AI helping out they won’t have as to worry about. This means they’ll be able to keep a productive and energized workflow even during rush hour!

Improve Guest Experience: A study found that 78% of consumers say they prefer a personalized experience. In fact, a personalized customer experience has the potential to boost sales, lower marketing costs, and create more loyal customers. The best way to provide a custom experience is by understanding the needs and behavior of your guests. With AI technology you’ll have the resources needed to do so! The same study of consumers found that 61% are even willing to give up a degree of privacy to enable a personalized experience on a continuous basis. With help from your guests, AI will have the data needed to fulfill your guest's needs every time. The personalized and engaging experience will increase your customer satisfaction rate and leave your guests hungry for more! 

Cut Costs: Sometimes profit margins can be thin, and finding a way to cut the cost of an ingredient will make or break the dish. AI technology is helping take on this obstacle by providing restaurants with more information than ever before. By seeing an increase in data points, restaurants will be able to pinpoint exactly where their profits are falling short. Along with the cost of food, AI is also reducing the need for extra employees that may not fit within the payroll. The technology completes the small tedious tasks an employee may have been in charge of originally. That’s saving you both time and money!

Save Time: The demand for easy and efficient services has increased rapidly over the years and is an expectation in the restaurant industry. Luckily, the use of AI will help your restaurant fulfill those needs. Guests will be able to order digitally with their mobile device or through a designated self-service area, and receive their order fast! The advanced technology will be working overtime so your employees don’t have to! The speed of service will increase as AI takes on time-consuming tasks so your employees can focus on meal preparation and completion. 

Artificial intelligence will boost both your restaurant’s efficiency and your numbers! An increase in revenue can already be seen in restaurants that have started implementing AI into their workspace. In some cases, staff has been able to double the number of orders they can fulfill during peak lunch and dinner hours! The workers who were once stuck behind a register are now free to help increase order efficiency and create high-value guest interactions! 

Artificial intelligence already provides us with a number of micro-solutions to solve our everyday problems, and the capabilities are endless. The emerging technology has proven itself to be a strong asset in the restaurant industry and it’s here to stay!