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Artificial Intelligence Rebooting the Restaurant Industry, One Byte at a Time

By streamlining operations, reducing costs, and boosting profits, Artificial Intelligence (AI) is creating new ways for the restaurant industry to flourish.

When one thinks of AI in restaurants, a futuristic world where kitchens are entirely staffed by machines and servers are replaced by robots might come to mind.

While that's not completely science fiction anymore, as restaurants in some parts of the world are already experimenting with robot-run kitchens and dining rooms, AI is transforming the restaurant industry in less dramatic, but highly impactful ways.

Even some of the nation's less-than-tech-savvy food service establishments have begun implementing AI to some degree to streamline operations, improve guest experiences, and manage inventory.

Though AI has become quite the buzzword in 2023, this technology is no longer out of reach for the average restaurateur. Below are ways restaurants are using artificial intelligence to make smart changes.

What Is Artificial Intelligence?

Much more than alien-like robots walking around restaurants taking orders and serving food, artificial intelligence is pretty much exactly what it sounds like—intelligence that doesn't happen naturally.

Systems and functions created by people that allow computers to mimic human behavior, AI works by receiving information from the world around it and reacting to it. By answering queries from users, using information and data supplied by humans, Siri, Google Assistant, and Alexa are prime examples of AI working in our everyday lives.

Though robotic chefs, servers, and delivery drivers might still be out of reach for the vast majority of US restaurants in 2023, more and more AI technologies are becoming accessible, helping humans behind the scenes to run restaurants more efficiently, sustainably, and profitably.

Types of Artificial Intelligence

The field of artificial intelligence includes a variety of subfields:

Natural Language Processing (NLP): This includes text-to-speech phone apps and virtual assistants like Siri and Alexa. Though NLP is able to understand, manipulate, and generate human language, it cannot actually learn and grow.

Machine Learning (ML) : Machine learning takes AI to the next level, allowing computers to not only take in information, but also to use complex algorithms to learn from it, so they can make predictions about events or human behavior based on historical patterns.

This type of technology, used by platforms like Pandora, Netflix, and Spotify, works by consuming and learning from data and getting to know users’ likes and preferences over time and suggesting new content the user might enjoy.

Just like humans, this subfield of AI learns from experience. Email spam filtering is an example of how machines learn which emails are undesirable to a recipient and place them in a spam folder instead of an inbox.

Generative AI: A type of machine-learning-based AI technology, generative AI, which works in response to prompts, is capable of generating new and unique outputs such as text, images, or 3D models. ChatGPT is an example of generative AI that’s currently garnering massive attention.

Computer Vision (CV): This subfield of AI is concerned with enabling machines to “see” and derive understanding from images and videos. Self-driving cars use computer vision to maneuver through streets and highways.

22 Ways AI Can Assist Restaurants

1. Virtual Answering

Missed phone calls can have a disastrous effect on a restaurant business. In fact, a recent survey found that a whopping 83% of customers will hang up and find another restaurant if they reach a voicemail more than once.

That's why many restaurants are adopting virtual answering technology that helps them avoid missing customers' calls. AI virtual answering technology can not only answer commonly asked questions, freeing up front-of-house staff to focus on their tasks and eliminate long, and potentially costly wait times for guests, but it can take delivery orders, make reservations, and add customers to wait lists.

2. Enhanced customer service

AI can analyze customer feedback from online reviews and social media. This allows restaurants to address customer concerns promptly, identify service gaps, and maintain a positive online reputation.

3. Voice Ordering

Online consumers are already using voice search when searching for nearby restaurants. As voice assistants like Alexa, Google Home, and Siri have grown in popularity, the tasks they can help users accomplish have become more complex and far-ranging as well.

But though guests have been using virtual assistants for a while now, a new technology that's gaining popularity is voice ordering, which lets guests use their smart devices to place restaurant orders on the go or while multitasking online.

4. Self-Serve Technology

Self-serve technology goes hand-in-hand with voice ordering, adding the power guests have to control and customize their own dining experience through self-service.

Customizing menu items while ordering from kiosks, splitting checks, and paying from tableside tablets or their own devices, more and more guests are embracing self-service technology in all types of restaurants, from fast food to sit-down dining.

5. Personalized Customer Experiences

While ordering kiosks have become fairly common in a variety of restaurants, there are some eateries that are taking that experience a step further. KFC, for example, has begun experimenting with facial recognition technology that can recognize repeat visitors and tailor their experience based on their past orders and preferences.

While facial recognition might not be yet accessible for all restaurants, there are many ways AI can help personalize the dining experience for guests. Online ordering and digital marketing are two ways restaurants are already collecting guest data, and then using it to provide personalized service, from menu recommendations to targeted marketing.

6. Integrated Inventory and Purchasing

One area of operations where AI can have a major impact on restaurants is by integrating inventory and purchasing systems with point of sale (POS) systems. AI-enabled software can track historical inventory and purchasing data, look for trends, and make real-time recommendations for what ingredients and supplies to buy.

Not only does this ensure that a restaurant has enough supplies on hand to avoid running out of ingredients for a popular dish, but it can help cut down on food waste by tailoring purchasing to meet inventory needs without buying in excess.

7. Smarter Staffing

Staffing and scheduling can be one of the trickiest parts of restaurant management. Using AI-enabled software, restaurants can track staffing and sales data to determine trends or patterns so staff can be scheduled in line with the restaurant’s traffic and expected sales during a shift.

8. Optimized Delivery

Many restaurants are turning to AI technology to help them optimize their delivery processes. Companies like Sauce are using AI to speed up delivery by optimizing dispatch-algorithms between multiple couriers based on real-time distance/traffic. AI helps delivery drivers find the best and fastest routes for making multiple deliveries in one trip, utilizing map data to avoid traffic and other hazards.

9. Tracking Options

By keeping guests in the loop about their orders, AI allows customers to follow drivers and get updates about delivery time by using a real-time moving map.

10. Refund Management

AI systems can handle errors and manage refunds on a restaurant's behalf, saving businesses thousands in lost revenues.

11. Automated Marketing

One place where most restaurants can implement AI today is in their digital marketing plans. There are many tools available now that use automation to conduct email marketing, create social media posts, and target ads to the right people at the right times to maximize views and click-through rates.

AI marketing can also be used to retarget recent visitors to a restaurant, encouraging them to become repeat guests. It can also help identify promotions that can help with upselling.

12. Demand Forecasting

AI algorithms can analyze historical data, including sales, weather, holiday dates, and other factors to predict future demand. This helps restaurant owners optimize inventory, reduce food waste and ensure the right amount of ingredients and staff is on hand.

13. Menu Optimization

AI can analyze guest preferences, customer feedback, and purchasing patterns to suggest menu improvements. It can also identify popular and underperforming dishes, recommend new combinations, and help optimize pricing to maximize profitability.

14. Menu Engineering

Menu Engineering is the process of designing and optimizing a menu to maximize profitability and customer satisfaction. AI can play a valuable role in this process by analyzing various factors such as ingredient costs, popularity of dishes, customer preferences, and pricing strategies.

While Menu Engineering is a legit tactic for analyzing and strategically designing a menu that delivers profits, many restaurant owners and managers find the data-collection process to be a bit daunting.

Here are a few ways AI can assist with menu engineering:

  • Data analysis: AI algorithms can analyze large sets of data, including sales numbers, customer preferences, and historical trends. By examining this data, AI can identify popular and profitable menu items and underperforming dishes.

  • Predictive analytics: AI can use predictive analytics to forecast the demand for menu items based on factors like seasonality, weather, and demographics.

  • Price optimization: AI can help determine the optimal pricing for menu items by considering factors like ingredient costs, competition, demand, and perceived value. It can also analyze data to identify price points that maximize profitability.

  • Menu layout and design: AI can assist in designing a user-friendly and appealing menu layout using visual aesthetics and psychological factors to recommend descriptions, item placement, and formatting.

  • Personalization: AI can leverage data and guest preferences to offer personalized menu recommendations. By analyzing customer profiles and previous orders, AI can suggest dishes tailored to a guest’s individual preferences and dietary restrictions.

While AI can provide valuable insights and recommendations for menu engineering, human expertise and creativity are still essential. Using a combination of AI-driven analysis and human decision-making, restaurants can engineer the most effective and profitable menu.

15. Minimum Viable Menu (MVM) Design

While creating a data-based menu for your in-person guests can be challenging, designing a scaled-down menu for pick-up and delivery involves a bit more work. With the traditional method focusing on quantifiable profitability and popularity metrics, menu engineering for restaurant delivery involves going one step further; deciding which of those items work best for your off-premise operations.

AI can assist in optimizing the placement and design of a scaled down menu by suggesting how to position high-profit items It can also recommend visual enhancements such as mouthwatering food photography or creative menu descriptions.

16. Monitor Customer Reviews

Though word of mouth will always be the most reliable source, more and more potential customers seek out the opinions of fellow customers by reading online reviews. In fact, 94% of U.S. diners claim they’re influenced by online reviews, so it’s more important than ever for restaurants to understand how to manage, respond, and showcase them.

Reviews from sites like Yelp provide invaluable feedback, offering insight into areas of your business that can be improved. But in the digital age, this highly useful information about your business and your customers’ experiences is constantly updating making it tough for restaurants to keep up.

AI can continuously monitor customer feedback and reviews to track the performance of menu items in real time. By analyzing this data in a timely manner, AI can identify trends, customer sentiment, and suggest areas for improvement, enabling restaurants to refine their menu offerings on an almost daily basis.

17. Supply Chain Management

AI can analyze supply chain data, inventory levels, delivery times, and supplier performance to optimize procurement and reduce costs. It can also automate inventory management, streamline the ordering process, and identify alternative suppliers to ensure continuity to prevent supply chain issues from disrupting business.

18. Restaurant Equipment Monitoring and Maintenance

AI can monitor the condition of equipment and detect potential issues before they lead to breakdowns. By implementing predictive maintenance, restaurant owners can schedule repairs in a timely manner, avoiding unexpected and costly downtime.

19. Fraud Detection

AI algorithms can analyze transaction data and detect fraudulent activity such as credit card fraud or employee theft. This can potentially help restaurant owners to safeguard their business and avoid financial disaster.

20. Streamline Operations

AI can automate routine tasks like taking orders, invoicing, and inventory tracking, freeing up staff to focus on more important tasks like providing customer service. Streamlining operations can improve efficiency, reduce errors, and enhance staff productivity.

21. Write Menu Descriptions

It’s important for restaurants to continually update their online menu copy to provide customers with the most up-to-date information about ingredients, nutritional information, and specials. This is particularly important for online ordering.

But writing menu descriptions can be a difficult, expensive, and time-consuming endeavor. Generative AI-powered tools can help drastically reduce the time and effort spent writing menu descriptions and make changes in menu items in real time.

22. Reduce Food Waste

Food waste is a problem in the restaurant industry, with between 4% and 10% of food purchases never making it to customer plates. AI can help reduce waste by capturing and recognizing images of wasted food and tracking and analyzing what’s being wasted. Not only can this help restaurants make adjustments in purchasing and save money on wasted inventory, but with less food waste generated, it can substantially reduce the amount of waste headed to landfills every year.

Take Away

As Artificial Intelligence continues to develop and improve, restaurants of all sizes and types can benefit from many of these AI-powered solutions. Though the food service industry will always need great people to provide the best customer service and deliver the highest quality dishes, staying up to speed on these new AI technologies can help restaurants stay innovative, competitive, and profitable.

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By Eileen Strauss


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