Data should underpin the decision-making process of all modern businesses, and restaurants are no exception. Unfortunately, many restaurants end up shying away from implementing a robust data science strategy because they simply don’t know where to begin. This is a huge mistake and can be detrimental to their bottom line. Restaurants can—and should—be collecting and analyzing customer data in real-time to better understand how guests interact with their brand, and ultimately drive sales. In this article, I’ll break down how restaurants can implement a data science strategy and what benefits will come of that effort.
The first thing you need to do is put a system in place for collecting customer data through every channel possible. This should include online orders, mobile apps, POS, loyalty programs, customer reviews and more. You may decide to invest in technology to enable data collection in-house, or end up outsourcing to a service provider; as long as you’re collecting data, you’re on the right path.
Make the data work for you
Once you’ve collected as much data as possible, it’s time to put that data to work for you. First and foremost, this requires that you ensure the data is “clean”—removing corrupt or inaccurate records, and enabling your machine to process the data. It can be quite tedious and labor-intensive, but is absolutely vital. As the saying goes: “Bad data in. Bad data out.”
After cleaning the data you need to do an exploratory data analysis (EDA) to identify high-level trends that you can examine further with specific models and algorithms. From there, you need to run and re-run your data against these models and algorithms to identify patterns and extract insights that may not be visible to the human eye. And then you rinse and repeat, gaining deeper and more valuable insights as the process goes on.
How data science impacts the bottom line
There are countless ways a well-executed data science strategy can drive sales and widen margins. In our experience, these are some of the most common and powerful benefits restaurants gain through effective data science:
The idea of implementing a data science strategy might seem daunting at first, but the longer you delay it, the more money you’re leaving on the table. Commit to investing in data science today, and you’ll be reaping the benefits for years to come.
Tony Tong is a Senior Machine Learning Scientist at Punchh, where he builds advanced Natural Language Comprehension capabilities for business applications and develops full-stack, highly-scalable machine learning services. He also serves as an ML/AI Ambassador to on-board pilot customers and promote an AI-first mindset. Prior to joining Punchh, Tony served as a Quantitative and AI Researcher at Sentient Investment Management, where he developed end-to-end trading strategies using quantitative and machine learning techniques.
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