Bryan Solar

Chief product officer, SpotOn

As we think about the restaurant industry in 2024, we expect restaurants will face increasing economic pressures in the form of higher labor costs, elevated food/input costs, and continued competition from well-capitalized, tech-forward restaurant brands. Operators will need to find new ways to protect and boost their restaurant’s profit margins more now than ever. The independent restaurants must embrace “doing things differently” to thrive in this increasingly competitive landscape. Looking ahead to 2024, we anticipate restaurants will need to:

Meet consumers where they are with multiple ordering formats

Adopt technology that provides actionable insights to move their business forward

Address workforce challenges with technology that enhances the employee experience

Reclaim their guest relationships with direct online ordering and reservation platforms

Leverage AI to do more with less and stay competitive

And here are some other things on my mind:

Omnichannel is no longer a nice to have

We believe that a growing part of a restaurant’s business is the ability to sell its offerings in many ways. Consumers no longer view restaurants only as a full-service dining-out experience but rather as a way to feed themselves in various formats—dine-in, carry-out, order ahead, order delivery, QR at table, kiosk, etc. To ensure restaurants can meet their customers where they are, we will continue our commitment to developing flexible technology, investing heavily in ordering technology so restaurants can take their customer’s orders the way they want to place them. Investments include continuing to evolve our QR order and pay offering, deepening our integration with Order with Google, and finding best-in-class partners to unlock flexibility for our customers. For example, Tony’s Pizza averaged three extra orders per hour when they implemented SpotOn Order and QR Ordering, resulting in a $40,000 increase in monthly sales.

Understanding technology’s value and true cost of ownership

In 2023, food and labor costs continue to rise to record highs, and we don’t foresee these costs coming down in 2024. Restaurants that raised prices in 2022 and 2023 are reaching the threshold of what consumers are willing to accept. In 2024, restaurants must be laser-focused on finding value across their cost and revenue centers and will require technology that creates and identifies opportunities to cut costs or drive revenue. The right restaurant tech stack will help operators increase revenue per shift, adopt menus to optimized p-mixes, and reduce operating costs.

For SpotOn, we are being incredibly intentional about where we invest our R&D to create and preserve excellent value for our clients so it addresses the challenges operators will face in the new year and beyond. This means we’ll focus our innovation on where we can make the most impact and continue to build deep integrations that drive actionable insights for operators, boost revenue, and identify cost-cutting measures for their business. Partnering with Fresh KDS allows us to help SpotOn clients make their kitchens more efficient. At the same time, partnerships with MarginEdge enable our clients to save costs by determining the best pmix for their operation.

Employees and guests demand tech-powered experiences

According to a study by the National Restaurant Association, labor remains the No. 1 challenge across our industry. While some restaurants continue to face shortages and are focused on recruiting talent, others have moved on to focus on retention, improved management, and the employee experience. The pandemic decimated the hospitality workforce; as the industry returns to pre-pandemic labor numbers, we see an influx of new workers, while experienced staff are increasingly rare. We believe this shift will necessitate operators to deploy easy-to-use technology that makes their employees’ jobs easier and improves employee retention. For example, handhelds save servers time and steps, while the teamwork employee app makes shift swaps and viewing pay a breeze. This coming calendar will be a year where great talent will be highly sought after, uncharacteristically challenging to source, and critically important to retain; technology will play a key role in addressing these issues.

Restaurants reclaim their customer relationship

For the past three years, we’ve seen a growing trend of tech providers pushing their brands above their clients’ brands. For example, guests are encouraged to download a tech provider’s app to order takeout or delivery instead of ordering directly through a restaurant’s app or website. By funneling consumers through a commission-free online ordering platform, you can save roughly 30 percent. We believe that a wave of change is coming where restaurants and brands, more broadly, will reclaim their guest relationships and focus on building direct relationships with their customers. How? For quite some time, airlines, hotels, and ecommerce retail customers have benefited from bespoke experiences tailored to their preferences, spending, and loyalty. This level of customization and engagement hasn’t quite arrived in the restaurant space. We believe that the restaurant concepts that figure out how to deliver a deeply personalized customer experience—including status, special access, and unique rewards—will be able to create loyal guests and consistent revenue. SpotOn’s bet: it’s all about your restaurant brand in 2024.

Democratizing AI to level the playing field for independents

Finally, Artificial Intelligence remains a big question mark in the industry. Larger restaurant groups are investing heavily in AI; SpotOn wants to democratize these advancements, ensuring independent operators can leverage and benefit from AI to drive their business forward. We believe that in 2024, the wider industry will begin to point AI and machine learning at critical challenges facing our industry, including menu optimization, staff scheduling, and customer engagement. At SpotOn, we believe independent restaurants operating in this competitive environment must have access to the same advantages AI will bring.