How can the digital hospitality technology market reach its full potential?

digital hospitality technology market is huge

I doubt that anyone would claim that the digital hospitality technology market has now reached its full potential. If anything, most still see it in its infancy if not early adolescence.  

COVID-19

The last year has seen hospitality technology propelled forward by the COVID-19 crisis. Brands that had only dipped their toes in the waters of innovation previously, became willing to jump fully-clothed into the lake. They are now embracing new approaches to their operations. Automation tools in particular, have caught the eyes of operation managers. Through automation brands have the ability to standardise processes, create consistency and increasing productivity. Every new technology innovation in the space has the potential to drive service efficiencies, reduce operating costs and raise the bottom line. 

But the challenges of COVID-19 aren’t enough to push an entire market to meet its end goal. That takes time, innovation, and most important, customer need. As a technology company, we’re invested in the process. We are keen to see technology reach its full potential in this space and to contribute to making businesses more profitable, efficient and successful. If it can do that, then there will be knock-on effects outside of the market, with positive GDP growth benefitting whole countries.  

There are several ways that technology vendors and food/hospitality brands can work together to bring the digital hospitality technology market towards maturity. First and foremost, we need innovator brands and early adopters. Companies that are willing to take leaps in order to demonstrate the benefits of a solution to the wider market. Without such adoption, technologies can’t even get off the ground.  

Historical Learnings

Take the tin can for example. You might laugh and say it’s not comparable being an analog technology, and one now ubiquitous in the food market. However, adoption of the solution was initially slow. The British Army and Royal Navy were its flag-wavers, using the technology decades before it became a popular, trendy product devoured by the masses. If they hadn’t, it’s possible that its benefits would have gone unrecognised, and adoption slowed or even halted.   

Adoption by innovator brands/organisations is an important first step, but the second is what drives technology evolution and leads to many product enhancements: competition. Competition is healthy, it pushes developers to stretch themselves and think of ways to expand features, constantly improving the technology they have to offer.  

Take Point of Sale; a technology that has changed dramatically in the last ten years.  

The first digital PoS was a computer-driven cash register, developed by IBM in 1973. It was, in fact, the first commercial use of a computer-based system used by the restaurant industry. Twenty years later in 1992 the first EPoS solution, Nisyst, launched. Now, in 2021 there are tens of brands, all competing hard to be used by operators – most of whom use an EPoS solution of some description. Because of competition (both from EPoS and external solutions), the traditional PoS has taken on a bigger role than calculating bills and issuing receipts. The best let brands view menus and integrate with mobile ordering and kitchen display systems. Some even work with a company’s digital loyalty programme. Would this have happened without competition acting as a driver – almost certainly not. 

Overcoming Reluctance

With new technologies comes reluctance, that reluctance needs to be addressed to be resolved. Pushing adoption beyond early innovators requires the concerns felt by the wider community to be addressed. This helps boundaries be broken down so that other, more risk averse, companies feel confident to try a new solution.  

Of course, sometimes there’s a good reason for the concern. Being risk averse isn’t a bad thing when there’s monies at stake. In 2018, Ottolenghi’s restaurant Rovi lost money when it was forced to close for a week. It had installed a new eco-friendly air-conditioning and ventilation systems that broke down and had to be replaced. Meanwhile the Henn-na Hotel in Japan faced chaos when it adopted robot technologies to greet guests and answer questions. Unfortunately, there were incidents where concierge robots woke snoring guests to ask them to repeat the question. Elsewhere front-desk robots were unable to copy passports from guests checking in. Unsurprisingly, the hotel removed most of its robot staff in response.  

Bad press like that is easy to achieve, but that’s exactly why pushing out positive news is important. When a product is working well case studies, marketing, social media and PR can be used to spread information on its benefits. Though most brands shy away from publicising financial results, there’s no reason that testimonials and reviews can’t be used as product endorsements. Vendors should aim to work with their loyal customers to build a relationship strong enough that the customer feels confident to discuss the solutions in play. 

Reluctance doesn’t sit solely with an operator. On the consumer side, new technologies are seen as exciting for humans while also prompting fears about its long-term impact. For many years, stories have circulated about robotics and automation taking away jobs from people. Meanwhile worries about security and fraud hover whenever a new digital payment method is introduced. The fact is, technology innovation will always provoke a spectrum of hopes and fears. That’s why it’s up to vendors, and the operators using new solutions, to optimise the user experience of the product, building trust and confidence.  

Digital Ordering and the Future

Digital ordering and payment technologies exemplify this. Since the start of COVID-19, more and more suppliers have emerged into the market. It’s to be expected. There’s a clear need amongst brands for streamlined, contactless ordering and payment – and it pushes existing vendors to innovate further. But not every platform in the market is equal, some fall short in terms of functionality or ease of use. In other cases, the technology has potential, but the brand rolling out the solution does so before optimising content or properly strategising its use. In either case, the experience the brand and the consumer have of the solution is sub-optimal. The consumer is put off from using similar solutions again, and the brand becomes averse to using alternative solutions for fear of further negative experiences. Instead, both parties prefer to return to traditional ordering methods where they feel more comfortable. 

The potential for digital technologies in the restaurant and hospitality space is enormous. Especially so in areas where automation can solve bottlenecks in production, improve efficiency and drive profits/cut waste. However, continued development, nor the benefit of any new technology is neither automatic nor guaranteed. When technologies emerge, we need to give confidence to early adopters. We need competition to drive innovation forward and we need conversations and evidence that can be shared to convince dubious operators and customers to invest their attention and money. The results could be transformative, and a decade from now, we could be looking back at a very different industry. 

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