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Combatting the labor crisis has proven to be expensive for QSRs. Restaurant technology has evolved to such an extent that it is now possible for a QSR to have a completely unattended front-of-store.
There are myriad challenges QSR operators have to contend with on a daily basis. Some of these difficulties have taken on calamitous proportions in the last couple of years, mainly due to the Coronavirus pandemic. Running a QSR has always required a lot of hard work, but this has become so much worse recently.
Of the adversities faced by QSR managers, the labor shortage is one of the most acute. According to the National Restaurant Association, during the past 12 months, unfilled job openings in the restaurants and accommodations sector averaged 1.4 million, which is the highest level on record. As of April 2022, eating and drinking places were still 794,000 jobs, or 6.4%, below their pre-pandemic employment levels, marking the worst shortage of all industries.
Combating the labor crisis has proven to be expensive for QSRs. With workers seeking better wages and more amenable terms, QSR operators have had to increase salaries and offer perks. With the need for staff being immediate, many QSRs have been offering cash incentives for signing on. When unable to meet their staffing requirement, some QSRs have even cut operating hours which has taken a toll on revenue. The ultimate result of these measures has been greater costs and less profit.
Adding to the woes of QSRs are the predictions of an impending recession. Record inflation levels, coupled with the recent increase in interest rates have led many eminent corporate figures to issue loud warnings about the strong potential for an economic downturn leading to a recession. A recent Bloomberg survey estimates a 30% chance of a recession in the next 12 months, up from 15% in March.
A recession could put QSRs in dire straits. History has shown that as individual incomes decrease, customers tend to reduce their spending on restaurant-prepared meals. For instance, during the 2011 recession Americans ate out 2.1 billion times less than in 2008. As would be expected a decline of this nature hampers the performance of a restaurant. Sometimes the impact is so severe that restaurants can no longer function. A total of 9,450 restaurants closed between April 1, 2010 and April 1, 2011 owing to the economic recession.
Despite these extremely gloomy circumstances, there is still a way for QSRs to be productive and efficient: automation. In order to circumvent the labor shortage and prepare themselves to fend off the impacts of a recession, QSRs should digitize their front-of-house. Restaurant technology has evolved to such an extent that it is now possible for a QSR to have a completely unattended front-of-store.
As the name suggests, an unattended front-of-store has no employees. Customers place their orders and make payments through a machine or device. They will be notified of their order status through the Public Address (PA) display system. When their order is ready, they simply pick it up. There will be no human interaction whatsoever.
When it comes to channels for receiving orders, QSRs have many options: kiosks, tablets, mobile apps and QR codes. Depending on customer demographics and budgets, QSR operators can choose to use one or a combination of several of these. As long as the user interface is friendly, with clear instructions and sensible steps, customers, even the most technologically challenged, will have no difficulty navigating the menu. Payment can be settled immediately through the same device so the customer completes the entire order process in one go.
One of the most obvious and immediate benefits of using technology is that it takes over human duties, drastically cutting down labor requirements. QSRs will not need to allocate any people for front-of-store tasks and so they will be able to function with a much smaller staff base. The labor crisis becomes almost irrelevant because QSRs will no longer be scrambling to hire more hands.
Integrating technology is a one-time cost. On the contrary, hiring new employees incurs ongoing expenses in the form of salaries, paid leave and perks. Unlike humans, machines and devices do not fall ill or need breaks. With an unattended front-of-store, QSRs will not have rostering troubles like finding cover for workers who call in sick or bringing in extra people for rush hours and peak seasons. All forms of spending on front-of-store staff will be completely eradicated, saving a QSR a tremendous amount of money.
Digital order processing can also fortify a QSR against an economic downturn by enabling it to run regardless of what is happening outside. Staff management issues that come with a recession are minimized as the staff base of a QSR will be minimal. What a restaurant needs to survive upheavals is to be prepared and adaptable. Technology is the best tool for this and an unattended front-of-store can help the QSR face any unforeseen obstacles.
Although it may seem paradoxical, recessions can be opportunities in disguise for QSRs. With less disposable income, customers will turn away from more expensive dining options and look for more economical places to dine at. This could increase the customer base of a QSR as long as they have the right pull factors for customers. As industry leaders keep reminding, the competition will always be present regardless of the state of the economy. To draw customers towards them, QSRs need to one-up on their rival eateries. Having an unattended front-of-store will give a QSR an edge over their competition, luring people in through their doors.
The first step to setting up an unattended front-of-store is to figure out what the QSR needs. As mentioned previously, there are many order-processing options - kiosks, tablets, mobile apps and QR-codes - and QSR operators need to identify what would work best for them. This requires understanding the functionalities and differences of each mode.
When it comes to selecting and procuring the required devices and software, the most sensible thing a QSR operator can do is to partner with a good vendor. Choosing a provider who offers a range of options, as opposed to an all-in-one solution, will give QSR operators the flexibility to get only what they need for their restaurant. This will also save them money as they will not be spending on redundant items. The equipment should also have the ability to be easily integrated into the QSRs existing ecosystem. Therefore, QSR operators should seek out vendors who offer solutions that can link up to their current POS without having to spend on a completely new system.
Having an unattended front-of-store is a significant move and QSRs must ensure that what they install can be used in the long-term. Checking reviews and testimonials is essential to ensure the software is robust and reliable. In order to preempt becoming obsolete (which is a widespread problem when it comes to technology), QSR operators must also look for companies that provide regular upgrades.
Because it is still such a novel concept, the thought of launching an unattended front-of-store can be daunting. While QSR owners have many skills, being tech-savvy is rarely high on the list. As a result, many of them could feel intimidated at the prospect of introducing this much technology. This is why partnering with a suitable vendor becomes even more crucial. Apart from getting a quality product, QSRs need a vendor who will assist them with the set-up, offer training in the use of the devices, work with them to market this new change, offer regular maintenance of devices and support the staff in the long-run with any difficulties they may have.
Getting through turbulent times requires agility, flexibility and preparedness. Setting up an unattended front-of-store check all these boxes, providing QSRs with the most efficient and viable solution to tackling the current economic challenges. And when this difficult phase has passed, an unattended front-of-store will continue to propel business for years to come.
Dinesh Saparamadu is CEO and founder of Applova Inc., a company focused on delivering innovative kiosks and mobile app-building platform technology. Saparamadu is also CEO and founder of hSenid Group of companies and is chairman of the board of PeoplesHR.