Hey Hot Potatoes,

Welcome to the latest edition of the Hot Potato Newsletter. Today, we’re discussing the ever-changing world of AI. I must admit, when it comes to technology, there are some things my grandma is more clued up on than I am… I’m normally slow to embrace new technology, mainly because I am stubborn and don’t like change. However, change is a good thing, and AI, whether we like it or not, is the direction we’re heading in. In this article, we explore what AI is, it’s impact on both front of house and back of house, as well as some of the best tools out there. Let’s get into it!

In today’s email: AI is changing the restaurant world... and you need to know about it.

Read Time: Approx 5 mins

Alright, what is AI?

Source: Toast / Forbes

For some of us, we may have heard this buzzword thrown around, but what actually is it? Let’s find out.

Think of AI as giving computers a brain of their own. It's not just about following orders anymore - these machines can actually understand stuff, learn from what's going on around them, and make choices based on what they know. It's pretty wild when you think about it.

You know how your phone can understand you when you talk to it? That's AI in action. Or when Netflix seems to know exactly what show you'll want to binge next? Yep, AI again. It's even helping cars drive themselves these days. AI is letting machines do things we used to think only humans could handle.

It’s already making waves in the corporate world, and according to Forbes:

• Over half of business owners use artificial intelligence for cybersecurity and fraud management.

• Almost all (97%) business owners believe ChatGPT will help their business.

• One in three businesses plans to use ChatGPT to write website content, while 44% plan to use ChatGPT to write content in other languages.

However, there are also undoubtedly concerns about AI and it’s uses, with Forbes citing some of the main concerns being an over dependence on technology, needing technological skills to use AI, and potential high costs to adopt the new technology.

The impact on front of house.

Source: Toast / Popmenu 

So in the restaurant world, how can AI impact front of house and make your life easier? Let’s explore.

Key Points:

1. Phone Answering: According to Popmenu, studies show that a whopping 83% of customers will choose another restaurant if they reach voicemail twice. This is a massive loss of opportunity. AI technology however can answer calls and provide accurate information from the restaurant's website and Google page. As well as answering calls, it can be trained to upsell opportunities and promote events.

2. Voice Ordering: We’ve become very accustomed to using AI-powered voice platforms like Alexa and Siri, with some of us using them as second nature. Similarly, QSR (Quick Service Restaurant) brands in particular, who operate drive-thrus, have started to use AI to handle customer interactions and orders too.

3. Customer Experience: AI is now taking the customer experience to the next level through menu ordering. Brands like KFC are able to use facial recognition to recognise repeat customers and tailor their experience based on previous orders. Not sure how I feel about facial recognition being used, but there are platforms out there like SevenRooms and OpenTable that can use AI to collect customer data and personalise experiences based on previous visits.

All the examples above show how AI can help you drive increased sales. This can be achieved through both automating tasks like answering calls (helping you save on staff costs too), and using your AI agent to upsell. There’s also the benefit of personalising guest experiences with data that AI can analyse and providing tailored suggestions for customers.

The impact on back of house.

Source: Digital Restaurant / Publicis Sapient

AI is changing the game, specifically for back-of-house functions. Perhaps all those heavy admin-based tasks won’t be such a chore anymore…

Key Points:

1. Inventory and Purchasing: This clever bit of technology has the ability to analyse historical data on purchasing and inventory levels to make smart decisions about when and how much you need to reorder. This will not only help reduce overspending but also reduce the amount of food waste—a win-win.

2. Staffing and Scheduling: AI tools can address one of the hardest parts of restaurant management. By analysing staff and sales data, it can provide more accurate staffing schedules, ensuring you’re not overstaffed during quiet periods and understaffed during peak periods.

3. Customer Service: Similar to the role that AI can play in answering calls, it can be a useful tool in taking on customer service tasks. From responding to customer reviews online, particularly negative reviews, to handling general customer queries, AI can free up your time to focus on other areas of the business.

4. Robotics: Alright, this is a bit futuristic, but there are companies out there like Aniai who have developed a robot inspired grill that can autonomously cook up to 200 burgers per hour based on AI powered tech. This in turn reduces labour costs and increases operational efficiency. How would you feel about a robot cooking your meal?

As we can see, it’s not only front of house tasks but also back of house tasks that can have real benefits from using AI and all the available tools out there. Time is money, so if you can automate manual and time consuming tasks, what’s the downside?

The best AI tools for restaurants out there.

Source: Medium 

With so many AI tools popping up left, right, and centre, it’s hard to know where to start. Below are a select few worth looking into.

Key Points:

1. All in One: Popmenu is a comprehensive AI-driven technology platform designed for the hospitality industry. Serving over 10,000 independent restaurants and hospitality businesses, it functions as a digital control centre, offering solutions for digital marketing, on-premise technologies, and online ordering. Popmenu's AI capabilities help restaurants optimise their online presence, improve customer engagement, boost sales, and increase loyalty.

2. CRM and Bookings: SevenRooms are knocking it out the park with all things to do with customer bookings and CRM. It is harnessing the power of AI to analyse customer data and provide more tailored experiences based on previous visits. Their recent acquisition of Hey Pluto, an AI powered SMS marketing tool, shows they’re only expanding in this space.

3. Data and Forecasting: ClearCogs is leading the way in data and forecasting. Their solutions are built around three pillars — food prep forecasting, labour and staff scheduling, and sales forecasting based on predictive menu item sales. Using historical data, their AI software will ensure you operate more efficiently by reducing ingredients waste, managing staff efficiently and providing a clearer sales outlook for the future. If you’re already using Toast, they integrate with them too!

4. Virtual Phone: Slang.ai is an AI-powered virtual phone agent specifically for restaurants. It acts as a 24/7 digital concierge, handling reservations, answering calls, and responding to customer inquiries.

AI can be overwhelming, and it’s hard to know where to start. With many family-run restaurants around for years, some may be stuck in their ways or reluctant to change. However, try starting with one tool, get comfortable with the new tech, and see how it can impact your business.

I for one don’t believe AI can or will fully replace the service and human touch in hospitality, but by working together, it can provide an even better experience for both operators and customers.

Today we’ve run through how AI is changing the restaurant game. Let’s hear your thoughts, would you consider using AI in your restaurant? And if not, why not?

Next week, we look at some of the most common upselling techniques you can use to drive additional revenue. From the psychology of menu layouts to bundles and extras, we cover it all. If you have any questions you’d like me to address, or if there are any specific topics you’d like to know more about, send them over.

Thanks for reading and don’t forget to subscribe to stay updated weekly on all things hospitality!

Bon appétit,

Max Shipman, Editor-in-Chief, Hot Potato

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