The restaurant technology space is taking form, with leaders in the space buying up smaller companies. In the past six months, there have been a number of major acquisitions.
Earlier this month, leading restaurant aggregator DoorDash announced that it is set to acquire contactless ordering and payment technology provider Bbot.
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Last month, B2B Software-as-a-Service (SaaS) restaurant technology company Olo announced that it has signed a deal to acquire Omnivore, a restaurant technology company that connects restaurants’ point-of-sale (POS) systems to operational management tools to boost efficiency, and in October the company announced its acquisition of customer intelligence and engagement platform Wisely.
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Also in October, financial technology and financial services company Fiserv announced the signing of an agreement to acquire restaurant marketing and commerce platform BentoBox with a goal to integrate the company’s technology into Fiserv’s Clover restaurant technology solutions.
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Many in the space are predicting more consolidation to come.
“I think there’s going to continue to be consolidation, because there’s, frankly, way too many players out there, too many piecemeal solutions … in the ResTech world, because ultimately no nobody really wants to run a separate software product for every channel that they deal with,” Tim McLaughlin, CEO of restaurant commerce platform GoTab, told PYMNTS in an interview. “So, if you think [for example] about DoorDash as a marketplace solution and Bbot as an on-premises solution, it’s really just a feature, and you still need a POS to underlie all those things, then they’re going to continue to aggregate features.”
Don’t Look Back
Overall, adoption of digital technology in the industry has grown enormously since the initial outbreak of the pandemic, both on the side of consumers utilizing more digital technologies both for off-premises and on-premises orders and on the side of restaurants integrating new digital systems into their operations.
However, as mobility has increased and contagion concerns have lessened, McLaughlin noted that there has at times been a desire to return to the pre-COVID dining experience, with for example face-to-face service and printed menus.
“There’s a nostalgia — everybody wants to pretend like COVID never happened, and … they long for the old personal ways,” he said.
However, he argues that, with the labor challenges restaurants are facing right now, there is no going back. As such, he has observed “a yoyo of sentiment” in regard to technology.
“In COVID there was a big lean toward technology,” he said. “As COVID rescinded, there was a lean away from technology. …Then I think there’s a reality that set in, which is we need technology for efficiency.”
It is worth noting that, on the consumer side, the demand for more tangible, physical experiences remains, as Michele Baker Benesch, president of Menu Men, a company that designs and manufacturers print and digital menus, said in an interview with PYMNTS.
“If you think about it socially, when you go to a restaurant [say] on a date, you want to interact,” she said. “A waiter comes over. You place an order. … There’s a dialogue between you. When you have a QR code, and you’re just looking at your phone, there’s no dialogue.”
The Patience Problem
One trend that insiders from different parts of the restaurant industry cite is consumers’ growing expectation for instant convenience. Research from PYMNTS’ 2021 How We Eat Playbook, created in collaboration with Carat, from Fiserv, which drew from a census-balanced survey of more than 5,200 U.S. adults, found that nearly half of all consumers (47%) order food for delivery online more often than they did before the start the start of the pandemic.
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However, McLaughlin believes that the scope of this trend may be somewhat overestimated, with some mistaking the fallout from restaurants’ labor challenges to be an indicator that consumers are becoming less patient.
“Service is getting a lot harder due to the lack of staff, he said, “and so it seems like they’re less patient but really you just don’t have enough coverage. It is possible they’re less patient, but I don’t have any data on that.”
Simplification of Payment
Looking ahead to technological capabilities that will be relevant in the restaurant industry in the future, McLaughlin said that he is looking forward to “the continuing simplification of the guest experience,” with payments especially becoming more frictionless.
Research from PYMNTS’ 2022 Restaurant Friction Index, created in collaboration with Paytronix, which drew from a census-balanced survey of more than 2,100 U.S. consumers, found that 1 in 4 restaurant customers would be more inclined to shop with restaurants that offered the ability to pay with card on file. Additionally, about 1 in 5 said the same of the ability to pay with QR codes.
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“In a venue where payment is a drag, I want to see payment disappear, personally,” he said. “That’s what we’re aspiring to. … Not that payment doesn’t happen. It just becomes less effort.”
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