Consumers Not As Tech-Focused As Local Restaurants Believe: Survey

Restaurant point of sale provider Toast is out with a new “Restaurant Success Report” about the state of the local restaurant industry. The report focuses on a wide array of topics: technology adoption, marketing, menu planning, hiring and other subjects. The data come from multiple surveys of restaurant owners and consumers between June 2018 and March 2019.

There’s too much in the report to cover here but I want to focus on technology adoption, with a side of marketing.

As reflected in the chart below, a substantial percentage of restaurants are using a range of technologies (some are likely SaaS tools) to run their businesses. Beyond the fact that there are multiple software tools, the fact that 50% are saying they’re using BI or analytics software is very interesting.

The bulk of these restaurants are working with between one and three vendors (69%). Previously,  LSA’s Modern Commerce Monitor found that 65% of SMBs would prefer to work with one technology provider for all their needs. To capitalize on this preference, should SaaS companies try to meet more SMB needs by adding features or by partnering? This is a central provider dilemma.

In terms of consumer-facing technology, guest WiFi and online reservations were the most important according to restaurant guests. Other technologies were seen as somewhat important but not imperative (chart below).

Overall, the restaurants themselves appear to place more emphasis on new technologies than consumers, which is counter-intuitive. (Other consumer surveys and considerable industry discussion emphasize how local businesses must embrace cutting-edge tools or be left behind.) For example, nearly two-thirds of restaurant owners (64%)  deliver receipts via email and text as well as paper, but only 28% of consumers said they wanted electronic receipts according to the survey.

Asked where they would invest capital for growth, equipment and physical improvements were the top responses from restaurant owners. That was followed by open a new location and purchase new technology (27%). Interestingly, marketing and advertising don’t appear on this list — perhaps they weren’t provided as options on the survey.

The marketing-related findings in the report are very interesting. Here’s a brief summary:

  • Restaurants are using a wide array of both digital and traditional media channels to market themselves
  • Consumers and restaurants both cite friends and family word of mouth, by far, as the top “channel” influencing consumer restaurant decision-making
  • Restaurants see online reviews and social media as more influential over restaurant decisions than consumers say they are (e.g., 38% of owners said Facebook influenced restaurant choices, while only 28% of consumers agreed)

One comes away from this report with the sense that restaurants are very clearly focused on new technology and digital media. But the report presents something of a disconnect, though not huge, between restaurant-owner perceptions and customer expectations around key technologies and marketing. One also gets the sense that these owners are scrambling to keep up with all the competing demands of operations, marketing and new technology adoption. But they might get away with doing less with more focus.

Many of these findings can probably be generalized to the entire SMB marketplace. The full report is available here.

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