Restaurants Face Two Choices in New Era: Innovate or Fall Behind

    The secret sauce boils down to optimization, communication, and personalization.

    Outside Insights | September 22, 2021 | Ido Levanon
    Fast-food customers order food off a screen inside a restaurant.
    Adobe Stock
    The pandemic forced innovation in the restaurant industry but there’s no reason it should stop there.

    Over the last few months, in-person dining has begun to make it’s reemergence with 49 percent of U.S. consumers willing to increase spending on dining out, according to Integral Ad Science Pandemic Effects Research. Even with consumers ready to open their wallets to restaurants and bars, owners must understand that getting customers in the door isn’t enough to retain loyalty.

    While there’s currently uncertainty for the industry once again due to COVID-19 cases surging with the delta variant, restaurants—whether operating more in-person or through takeout and delivery orders—must embrace the new wave of innovation that’s on the horizon to stay ahead of the curve as we enter the new era of restaurant management. Here’s my take on how to do just that.

    Digitize, Digitize, Digitize

    The fact is that customers today expect quick and convenient service, and the most efficient way to do so is to further digitize operations. Over the last year, digitization is one of the major things that restaurants embraced. We saw this through many major quick-serves offering online services. At first, the reason for the shift to digitalization was because of customer and worker safety, but now it’s mainly because the pandemic has changed the way people consume.

    According to the Verizon Small Business Recovery Survey, 50 percent of restaurants and bars have already started offering new products and services to adapt to changing customer needs. As restaurants shift and forge new paths forward, investing in technology and bringing digitization to the forefront of the food industry will only serve to strengthen business operations. 

    The “secret sauce” for innovating and staying ahead boils down to optimization, communication, and personalization. One of the best ways to improve efficiency is by optimizing the restaurant’s operations. Using artificial intelligence (AI) that lets customers know exactly where their order is and the exact status of preparations can make all the difference in customer satisfaction and loyalty. This can help restaurants strengthen their relationship with their customers and provide a heightened level of transparency. Also, capabilities like this will help in the event a delivery is delayed, giving the customer a clear picture of what has happened and a platform to directly contact the restaurant if they desire. AI technology can also ensure safety measures by automatically checking and confirming that the food has been prepared contactless, the surfaces have been cleaned, and that employees wash their hands. AI can even detect if employees are wearing gloves or a mask. This unique innovation can give consumers the confidence they are aiming for in a specific quick-serve or restaurant. 

    Customers today are looking for easy ways to order and communicate with the restaurants. While communication may seem miniscule, people value detailed information on order status, delivery updates, and a quick way to get in contact if needed. Operators can add consider additional channels for delivery services such as allowing customers to order on Twitter, order with virtual assistants like Alexa, or from a smartwatch and so on. Convenience is at the forefront of many consumers’ minds as we move out of the pandemic, and these additional options for ordering aren’t fully blown out yet. Those that can take charge on new ways to communicate with customers will have a better chance of standing out. 

    Social media pages are also an effective way to establish transparency with customers. Restaurants should always encourage guests to leave reviews and post pictures about their experience, but the next iteration of this can be using social media pages for tracking and placing orders. A recent study by MyBuys found that increasing personalization in more channels can increase overall consumer spending by up to 500 percent. Another study by Accenture found that 91 percent of consumers are more likely to shop with brands who recognize, recall, and provide relevant offers and recommendations. Restaurants that can champion personalization with takeout and delivery services have an opportunity to make better connections with consumers. They can increase personalization by using data from history orders and preferences, loyalty programs, and offering several customer services channels so the customers can choose options that are the most convenient for them.

    Place Customer Experience Front and Center

    One of the most important things for restaurants to prioritize when it comes to online services is improving the customer experience. Customers’ expectations increased significantly in the past year due to more options and competition in the saturated market. They can, and will, easily switch between brands and services in the blink of an eye to ensure they are getting the best experience and value. Restaurants should guarantee an experience that matches or exceeds what their customers might get at the physical restaurant.

    One way to do so is to join in on the ghost kitchen phenomenon. The National Restaurant Association’s “2020 State of the Restaurant Industry” report states that 52 percent of adults claim that ordering takeout or delivery is an essential part of their lifestyle. This may be part of the reason why ghost kitchens made a name for themselves at the height of the pandemic. Since ghost kitchens require less space and fewer employees, it’s an out-of-the-box way for operators to save money, offer more variety for their customers, and streamline operations. The success of delivery and fulfillment with ghost kitchens will define the value of the brand and will help restaurant businesses earn repeat customers.


    The pandemic forced innovation in the restaurant industry but there’s no reason it should stop there. We’re entering a new era—one that is a hybrid mix between in-person/online and dine-in/take out. This is the time to invest in all aspects of customer experience—especially dine-in and delivery services. Those who can strategize for both, and create seamless customer experiences no matter the setting, will thrive. 

    Ido Levanon is the CEO of Dragontail Systems. He has 20-plus years’ experience and a proven track record in successful management and turnaround of various international companies. He was CEO and a seed investor in several technology start-ups and a Financial Planning Manager for Fujitsu USA. Ido holds an MBA from San Diego University. He has been part of DT Israel since its inception in 2013 as one of the founding investors