How COVID Accelerated Tech Changes to the Restaurant Industry

    Mighty Quinn’s BBQ co-CEO Micha Magid on how the industry is leaning into a more tech-focused future.

    Mighty Quinn’s
    Mighty Quinn’s
    Great food will always be available, a finger tap away.

    When the pandemic’s devastation subsides, we are all prepared for a different version of normal. The restaurant industry is changing, not into something different, but an accelerated version of where it was already headed.

    Some permanent changes

    Dining categories, still as varied as cuisines, will begin to differentiate less on price and more on how customers interact with them. Traditional dining categories (fast food, fast casual, fine casual, casual dining, fine dining, etc.), mostly delineated by check average, all conform to the same analog model of walk-in, order, eat, leave. Should such varied experiences adhere to the same operating model?

    The increasingly important digital interface to our guests will make the physical restaurant less relevant. We can validate this today because ghost concepts have gone from nothing, to something. The gain in market share is not debatable. Service formats, décor, physical branding and other tangible variables that made a location special will begin to matter less. Not in every case, but on average, if we are to paint the next predominant theme for the future with one brush stroke.

    Digital architecture, a beautiful UI (user interface), unique and compelling food backed up by a reliable last mile delivery solution have usurped the hierarchy of dining’s formula for success. Restaurants will of course maintain an elevated importance in our social lives, but the broader trends in what is now in infancy, could become quite large over time.

    The digital impact

    COVID worm-holed the delivery economy years into the future. While we knew delivery volumes would grow, what’s more of a surprise is how the industry is bifurcating into utilitarian versus experiential dining. How many categories will successfully morph into a faceless pickup locker interface? How many don’t need to?

    Post COVID, the pre-order pickup area is consistently busier than the register at every Starbucks in my neighborhood. I see the same at well-funded fast casuals where stanchion guided ordering lines have been replaced by grids of seven-foot-tall pre-order pickup shelving. Between the ever-complex labyrinth of employment regulation and the decreasing pool of hospitality labor we shouldn’t be surprised restaurants are more focused on making a sale before a guest walks in the door.

    What’s next?

    Smaller real estate, increased automation and further reliance on screens vs. people. Despite giant gains on the tech stack that powers this new generation of hospitality commerce, the systems are still clunky.  Like a shanty town connecting power lines in a mess of a web, the system works but needs improvement.

    Naturally when one of the oldest industries modernizes there are a lot of pain points to solve, but disparate systems talking via APIs is not the solution. Consolidation of these providers will be a major theme into 2022 especially as buyers now have richly valued public equities to use as currency. Doordash, Uber Eats, and Grubhub are all armed to spend. Other niche and less well-known companies like Olo and Toast will soon have the same. Imagine if a driver had to buy the steering wheel, the engine and the car’s body from three different companies.  That’s today’s restauranteur reality. Naturally, it all has to come together.

    Once we get past this consolidation phase, restaurants will more easily “plug in” to the digital ecosphere; a tide that should lift most ships. I’m excited to see how brands evolve in this future and I’m personally interested to see how digital-only brands continue to flourish alongside differentiated brick and mortar concepts. Restaurant survivors will benefit from one of the most compelling economic tailwinds in over a decade. I see very compelling growth opportunities with ROI’s that far exceed past norms.     

    The Restaurant is dead, long live the Restaurant!

    We can’t bemoan a little lost romanticism in dining out when customers demand speed and convenience. However, I eagerly await crowding into a packed restaurant, the kind that defined dining out in New York City for the last century. Waiting at a packed bar for a table, noisy restaurants, getting your chair bumped by busy wait staff … it’s going to be awesome. I’m confident that day is near, but it will be nice to know that great food will always be available, a finger tap away.