The Future of Restaurants in the AI Era. How Can a Restaurant ERP Software Improve Efficiency?
Intro
Restaurants and other F&B businesses have been using artificial intelligence (AI) within their operations for years. The use of AI in the F&B industry can lead to an increase in the average order value by 10-15%, and improve the order accuracy by 15-20%.
While many restaurant owners and managers still perceive AI with reluctance, unsure of its implications on a long run, others are already reaping the advantages of being among the early adopters of this technology.
This blog looks into how AI will transform the restaurant industry, covering common and advanced applications, benefits, and best practices using AI specifically for improving restaurants’ efficiency.
What is AI in restaurants?
Artificial intelligence applied to restaurants is any form of technology that incorporates non-human inputs for analyzing and managing multiple data points, for the purpose of automating or streamlining operations, which in turn leads to an increased operational efficiency for F&B businesses.
While AI has become hugely popular in recent years, the use of artificial intelligence restaurants goes back to the 20th century. In the 1980s, early 1990s, early forms of AI technology, such as expert systems and rule-base data analysis started to be applied in areas like inventory management or recipe development.
Today, AI has a range of applications in the restaurant industry, with some already widely known and others still emerging. While many restaurants use basic AI applications globally, more advanced uses require an enterprise planning solution (ERP) with built-in AI technology. For restaurants to fully benefit from these advanced AI capabilities and gain a competitive edge, an ERP solution that integrates AI natively is essential.
Common applications of AI technology in restaurants
- Chatbots
AI-powered chatbots handle customer inquiries, reservations, and complaints, managing customer interactions 24/7. Being greeted by a friendly chat bot whenever landing on an F&B website is common nowadays, and it’s a simple and elegant solution to capture customer requests and feedback, which can later be used to analyze behavior and preferences.
- Self-Ordering Kiosks
Self-ordering kiosks are becoming part of customer experience, especially in quick service restaurants. They use Natural Language Processing (NLP) to understand and process customer input, whether typed or spoken. This experience allows for a more efficient interaction, ensuring order accuracy, which also improves customer service and streamlines kitchen operations.
- Basic Personalization
Based on previous orders, AI can provide recommendations for popular dishes, or combinations that might be appreciated by customers.
Advanced applications of AI technology in restaurants
More advanced applications of AI in restaurants go beyond the basic automation and customer interaction processes. The goal with advanced AI applications is to analyze multiple systems and provide predictions and recommendations based on multiple data points analysis. Here are some examples, already in use in F&B businesses around the world.
Predictive Analytics for Inventory Management
Using historical sales data and trends, AI technology applied to an inventory management system can provide powerful insights on future inventory needs. This is beneficial for the F&B businesses because it helps to streamline purchasing, assuring only the needed items are bought, and avoiding, like this, unnecessary waste.
Advanced Menu Engineering
By analyzing the sales and orders placed by customers across a determined period of time, AI technology applied to menu engineering identifies the popular and profitable menu items, as well as the underperforming ones. AI algorithms analyze patterns and insights to suggest strategic menu changes that boost profitability and improve customer satisfaction.
AI-Powered Food Cost Calculator
Restaurant owners and managers often struggle with balancing low food costs while maintaining high food quality. The AI-powered food cost calculator, part of a restaurant ERP system, helps address this challenge. It analyzes data from sales, purchase, inventory, accounting, and recipe management to determine the cost of each item. By comparing these costs with demand, it provides recommendations for profitable menu adjustments. This tool can help reduce food costs by up to 25% of the total food value sold.
What are the benefits of AI for restaurants?
Time Management
AI significantly saves time replacing routine and manually handled tasks such as order processing, inventory management, and staff scheduling with automated processes. This allows restaurant staff to focus on delivering exceptional service and improving the dining experience, ultimately enhancing overall operational efficiency.
Cost Optimization
The use of AI across various restaurant operational areas can result in substantial cost savings. Only by using AI to automate repetitive tasks, staff’s schedule can be optimized, reducing labor costs. Additionally, by automating inventory management, only necessary items are purchased. This reduces waste (that might result from items not being used), which also translates in cost savings.
When applied to kitchen equipment, AI technology can reduce energy costs by automatically optimizing cooking parameters and ensuring that appliances are only used when needed.
Customer satisfaction
When repeated manual tasks are replaced by automated processes, all restaurant staff gain more time to focus on delivering better customer experience. Chefs gain more time to improve signature dishes, or customize dishes based on customer preferences, and food servers gain more time to build a memorable dining experience, interacting more with customers, from a relaxed position, which builds an authentic connection.
Data-Driven Decision Making
An invaluable benefit of the AI application in restaurants is the ability to make informed decisions, based on data driven from across all data points of the restaurant business. Having instant access to data about sales, expenses, profits and available cash flow, can help restaurant owners understand whether it is the right time to extend and grow their business, or whether they need to make adjustments to gain back profitability or reduce expenses.
Best practices: restaurants using AI the right way
A worldwide restaurant chain serving Asian food applied AI technology to boost their profitability. By checking historical sales data with the use of the AI-powered menu engineering, they were able to understand, based on the AI-insights, which were the top 5 most popular and profitable items in specific menu combinations. This helped them to build a new combo, including the most popular items, reaching a revenue boost of 20% in the course of 12 months.
How an AI-Powered Restaurant ERP Solution Fits the Future of Restaurants
While artificial intelligence alone can offer specific applications and localized benefits, an enterprise resource planning (ERP) system designed specifically for restaurants significantly accelerates the process of streamlining operations and reaping the benefits. As a built-in solution, where sales, accounting, purchasing, production, inventory, marketing, and HR are all connected, a restaurant ERP solution like Polaris ERP captures instant insights across all areas of the business. With the smart AI assistant, it can provide actionable recommendations to reduce food costs and boost menu profitability.
Polaris ERP also excels in predicting inventory levels, helping restaurants streamline inventory management to reduce overstock, minimize waste and avoid out of stock, through its restaurant ERP solution. Its advanced automation features enhance efficiency in order processing, digital menu management, delivery, and payment processing through QR codes. This ensures a tailored dining experience that meets customer preferences and enhances satisfaction.
Conclusion
The future of restaurants in the AI era is already happening, and embracing advanced AI solutions is no longer an option but a necessity. By integrating AI with restaurant operations, businesses can achieve greater efficiency, reduce costs, and enhance customer satisfaction. Ignoring these advancements only leaves the door open for competitors to gain a significant competitive advantage. As the industry evolves, adopting a comprehensive restaurant ERP system like Polaris ERP ensures that your establishment stays ahead of the curve, leveraging AI to transform every aspect of your operations and deliver exceptional dining experiences.
