For millions of Americans, opening and running a restaurant is the ultimate achievement of the American Dream. But while creating your own business and being your own boss may sound like fun, keeping that dream alive requires business savvy, and whether restaurant owners want to admit it or not, it also usually requires a helping hand from technology.
Over the years, the restaurant industry has made gains by adopting mobile point-of-sale (mPOS) technologies to help with a variety of services. Shifting to these technologies can help restaurants improve their food service deliveries, help businesses manage labor and inventory and improve the restaurant experience for customers with mPOS devices that can take orders and pay bills.
Restaurants aren’t the only ones investing in these systems. Research from Global Market Insights Inc. finds significant growth in the market coming from the entertainment, health care and hospitality sectors. Demand from these industries and restaurants is expected to push the mPOS market to grow to $48 billion by 2023.
But while mPOS solutions may offer restaurants several benefits, getting them on board with the technology has not always been easy. PYMNTS recently spoke with Mani Kulasooriya, CEO of CAKE, a provider of restaurant management systems and POS solutions, about how mPOS systems are helping restaurants, the challenges businesses face when adopting mPOS solutions and why some restaurateurs struggle with changing technology more than others.
New tools for new challenges
Traditionally, Kulasooriya said, restaurant owners have been slow to embrace mPOS technology. But during the last half of 2016, he noticed more businesses becoming interested in adopting the tech.
Why the sudden change? Kulasooriya believes restaurant owners grew concerned about increased labor costs as movements, such as last year’s nationwide rallies by food service workers, gained traction and urged businesses and policymakers to raise hourly minimum wages. For restaurant owners, Kulasooriya said the demand for higher wages has been a “pain point.”
Technology may be a way for business owners to ease that pain and save costs on labor, while improving services for customers. Kulasooriya said that mPOS systems, which he noted once ranged from $6,000 to $8,000, have become more affordable in recent years, prompting restaurant owners to consider the solutions more carefully.
“Today, it’s more like a $1,500 range,” he said.
Restaurant owners now also have the flexibility to buy only the solutions they need instead of a technology package with programs that may be superfluous to their businesses.
Getting restaurateurs on board with tech
But while recent events may have prompted some restaurants to take a new look at mPOS solutions, Kulasooriya said many restaurant owners prefer to keep a distance from technology because of longstanding attitudes that it could threaten their relationships with customers by reducing the human element from their restaurants. Kulasooriya believes mPOS solutions can also help restaurant owners confront old mindsets about technology.
Kulasooriya said his mPOS products can offer solutions and benefits for larger restaurant chains, but smaller, independent restaurants are more likely to need the solutions. This is because, while smaller restaurant owners are enthusiastic about cooking and creating food, they often lack business management skills that help them run, manage and market their establishment.
“These are folks who are very passionate about food or very passionate about people, and that’s why they started a restaurant,” said Kulasooriya. “They’re not necessarily the most business-savvy or tech-savvy folks out there.”
He said these business owners are still committed to providing their customers with great food and an enjoyable atmosphere. But at the same time, Kulasooriya pointed out that the romantic vision of running a restaurant is part of the reason many business owners shy away from newer technology.
“They want their customers to have a good overall experience, not just the food that they’re eating, which is very important, but the overall experience,” he said. “That’s part of the reason that, traditionally, the restaurant industry has been tech-backwards. Tech almost feels cold in the restaurant world.”
Kulasooriya said getting restaurants on board with mPOS solutions requires mobile payment solution companies like CAKE to help business owners adjust their longstanding attitudes toward technology. The challenge is not only convincing restaurant owners that technology won’t compromise a restaurant’s rapport with consumers but convincing them that these solutions can help build positive bonds instead.
“What we’re hoping is that we can help in the relationship piece because actually you can use technology to improve that relationship,” he said. “That’s the change in mindset that we’re trying to do.”
Tapping data to fix menus
While mPOS solutions are aimed at helping restaurants manage their customer interactions, Kulasooriya also pointed out that the products can tap into data trends that can help restaurants make changes aimed at improving services and operations.
These tools can go beyond helping individual restaurants improve or even fix their businesses, he said. The systems can look at broader trends across the restaurant industry to identify patterns that affect several individual restaurants.
“At an industry level, we’re not just able to understand trends in the industry but also understand within a certain cuisine, inside certain regional locations, which restaurants are doing well and not doing well and what are the characteristics from a data standpoint of someone who is doing well versus not doing well,” said Kulasooriya.
At the end of the day, Kulasooriya said he understands why some restaurant owners have kept technology at arm’s length. But these days, those attitudes appear to be changing, and restaurants are more willing to embrace technology than they have been in the past, partly because the technology is becoming more commonplace and more affordable.
But he also acknowledged that convincing business owners to change their minds about technology and realize its potential to improve operations is not always easy, especially when concerns about costs arise.
“Someone once said the problem with small businesses is they have enterprise-like needs but consumer-like pockets,” he said, laughing.