The restaurant industry is no stranger to challenges, but the last few years have tested the resilience of independent operators like never before. From supply chain disruptions to labor shortages, 2024 was an “out of the ordinary” year for restaurants. With the lingering effects of inflation, restaurants have had to adapt rapidly to stay afloat.
Restaurants that can evolve with shifting consumer attitudes, preferences, and expectations will be better set up to withstand the constantly shifting landscape. The future of the restaurant industry hinges on utilizing cutting-edge technology in order to deliver value-driven, personalized customer experiences and maximize the human aspect of the dining experience.
Here’s how restaurants can adapt and lead the charge into 2025.
The importance of personalization to build loyalty
The era of “one-size-fits-all” marketing is over—70 percent of operators now actively send personalized offers to their customers. Personalization creates a sense of connection and understanding between the customer and the brand. However, it extends beyond just using someone’s first name in an email. Forward-thinking restaurants are building personalized experiences based on customer preferences and behaviors.
This might mean offering discounts on a customer’s usual order, suggesting menu items based on past choices, or even providing special perks on birthdays. The key is to strike the right tone—customers want relevant offers that feel convenient, not intrusive. Restaurants that harness customer data responsibly and use it meaningfully will be better positioned to build long-term loyalty and retention.
Why value is important in a cost-sensitive market
With inflation still squeezing wallets, value and affordability will remain top priorities for consumers heading into 2025. The seemingly never-ending “value menu wars” among fast-food giants only prove how critical pricing strategy has become.
Delivering value is not just about slashing prices, it is about giving customers more reasons to choose a specific restaurant over a wealth of other options. Some operators are exploring subscription models, which have gained traction in industries like media and entertainment. This could look like offering customers a subscription-based dining plan that promises exclusive perks such as free drinks, priority reservations, or discounts with each visit. These types of programs create a sense of belonging while deepening brand loyalty.
Perceived value is also an essential part of building a loyal customer base. Whether through generous portion sizes, complimentary extras, or bundled offers that feel like a great deal—competitive pricing paired with creative strategies to enhance value will set successful brands apart.
Leveraging technology to empower service
Technology continues to redefine restaurant operations. While automation and AI are key tools for cutting costs or improving operational efficiency, their true potential lies in enhancing the human aspects of hospitality.
From a survey of 600 operators across the U.S., 89 percent feel positive about the use of AI in restaurants and its potential to streamline back-of-house operations, such as inventory management and workforce scheduling, ensuring resources are optimized without adding human strain. Real-world applications are already making waves, such as smart scheduling algorithms that prevent overstaffing or underutilization during peak hours, or predictive supply ordering systems that reduce food waste.
Technology can empower frontline workers to provide better customer service. For example, equipping servers with handheld POS systems allows them to spend more time at the table tending to diners, rather than running to and from a stationary system. The right technology provider can help reduce inefficiencies and put real-time data at employees’ fingertips.
Navigating the new era of tipping
The tipping culture in restaurants is on the brink of a significant evolution. With the rising prevalence of mobile ordering solutions and automation, tipping norms are changing. Thirty-six percent of operators have observed customers tipping less, which may be due to increased menu prices or discomfort with overtly suggestive tip prompts on digital devices.
With 99 percent of operators spending more on labor, this recent shift is causing many restaurants to reconsider their approach to service wages altogether. Some operators are transitioning to a no-tipping model, instead focusing on offering staff higher living wages. While tipping models continue to evolve, it provides an opportunity to create a more equitable and seamless dining experience. For diners, it eliminates the mental math of calculating tips. For workers, it ensures financial stability, while alleviating potential income fluctuations that are inevitable during seasonal ebbs and flows.
However, implementing such a change requires careful communication. Operators must engage both staff and customers in open, transparent discussions about why these adjustments matter and how they will benefit everyone involved.
The landscape for success in 2025
Resilience and adaptability are the cornerstones of restaurant success, and as consumers evolve, so must the industry. Prioritizing personalization, delivering on value by embracing tactics like social media marketing, leveraging innovative technology such as artificial intelligence systems to automate back-of-house logistics like inventory, and addressing cultural shifts like tipping head-on are essential strategies for 2025 and beyond. While rising food and labor costs remain a concern, those who invest in technology, innovate their business models and maintain flexibility will be better positioned to thrive in a competitive landscape. The playing field is open, and the restaurants that continue innovating will come out on top.
Samir Zabaneh is the chairman and CEO of TouchBistro. He’s a a seasoned financial and operations executive with private and public companies. Samir held various executive roles, including CFO and COO, in large global fintech companies including Fiserv Inc. (previously First Data), Global Payments (previously Heartland Payments) and Moneris Solutions, during which time he executed various successful strategies related to vertical specific software solutions integrated with payments processing. Earlier in his career, Samir held various leadership roles at Fortress Investment Group, Q9 Networks and Newcourt Capital.