Post by account_disabled on Mar 4, 2024 5:30:01 GMT -5
My teammate Noah Gross and I both grew up working in restaurants. Our first jobs as children were receptionist, waiter, cashier, taking stock and preparing for the next shift. Really, whatever it takes to get food into the hands of our hungry customers. The work was hard and sometimes exhausting. Unlike other industries, restaurant work has its share of hardships, and that's probably always going to be the case. That being said, the restaurant industry (and the wider food supply chain) still relies on countless human inputs. The industry as a whole lags behind other verticals where adoption of technology has been more pronounced. There are many drivers of this behavior, but as more vertical-specific technologies begin to surface, the restaurant industry is starting to become more digital and more automated. In a recent conversation, my teammate Alex gave an interesting explanation of how this transition seems to have occurred. It feels like we are in the midst of the third wave of technological transformation in the industry (Wave 3.0). The first wave (1.0) was just about establishing a digital presence (building a website; posting menus online, maybe even allowing customers to make reservations). The second wave (2.0) is characterized by the emergence of online information aggregators (e.g., etc.) that create distribution channels for many restaurants that would otherwise be too cumbersome or expensive to generate independently. Then there’s the second part of the second wave (call it 2.5), which has given rise to online delivery platforms like , which, rather than acting as an information exchange, actually provide new channels for food in their own right.
What we have observed in the market recently is a third shift, brought about by a new wave of digital solutions that take control of the customer lifecycle (and all the data and workflows that go with it) Give it back to the Paraguay Mobile Number List restaurateur (not the restaurateur). .Third Party) We’ve been paying close attention to the shift taking place and have spoken with dozens of emerging companies and restaurant operators along the way to better understand some of the nuances in the market. We thought we'd share some of our observations below: Setting the Table Everyone needs to eat, but few understand the many underlying complexities and challenges that exist within ecosystems. Before the pandemic, there were more than 1 million restaurants in the United States, with annual revenue totaling more than $1 trillion, according to the National Restaurant Association. The industry is massive, but it's also characterized by an unusually long tail of small businesses, with 9 out of 10 restaurants employing fewer than 50 employees. As a result, most restaurants do not have the ability to implement complex systems and automated processes on a larger scale. Margins in this industry are notoriously low (if you're a restaurant and your net margins are in the low double digits, you're probably happy). Historically, this setup has not been conducive to significant reinvestment in the business, let alone the adoption of new technology.
Even at a larger scale, where one may encounter more systems and automation, replacement cycles can be long and disruptive - this is one reason why, for example, you may still encounter point-of-sale systems, Examples include Micros (now owned by Oracle) or Aloha (owned by NCR), which first went public decades ago. The industry is known for unusually high employee turnover and rising food costs in recent quarters. Among other things, these factors contribute to one of the unfortunate complexities of the industry: very high casualty rates. About 60% of restaurants fail in their first year; 80% fail within the first five years. A Year of Transition The COVID-19 pandemic has had a devastating impact on the restaurant industry in some ways. As of the end of 2020, the industry's total sales were $240 billion (27%) below pre-pandemic forecasts. As of December 2020, more than 110,000 restaurants, or more than 10% of all restaurants in the United States, were temporarily or permanently closed. But beyond these challenges, opportunities also arise. The COVID-19 pandemic has had a significant impact on nearly every business in the sector, but it has also forced the industry to rebuild, with many owners beginning to view the adoption of new technologies as not just a business enhancement, but a necessity. For many, innovation is no longer an existential crisis but a life-or-death decision. The National Restaurant Association estimates that during the pandemic, more than 40% of restaurant operators have adopted new technologies to accommodate online orders and contactless and digital payments.
What we have observed in the market recently is a third shift, brought about by a new wave of digital solutions that take control of the customer lifecycle (and all the data and workflows that go with it) Give it back to the Paraguay Mobile Number List restaurateur (not the restaurateur). .Third Party) We’ve been paying close attention to the shift taking place and have spoken with dozens of emerging companies and restaurant operators along the way to better understand some of the nuances in the market. We thought we'd share some of our observations below: Setting the Table Everyone needs to eat, but few understand the many underlying complexities and challenges that exist within ecosystems. Before the pandemic, there were more than 1 million restaurants in the United States, with annual revenue totaling more than $1 trillion, according to the National Restaurant Association. The industry is massive, but it's also characterized by an unusually long tail of small businesses, with 9 out of 10 restaurants employing fewer than 50 employees. As a result, most restaurants do not have the ability to implement complex systems and automated processes on a larger scale. Margins in this industry are notoriously low (if you're a restaurant and your net margins are in the low double digits, you're probably happy). Historically, this setup has not been conducive to significant reinvestment in the business, let alone the adoption of new technology.
Even at a larger scale, where one may encounter more systems and automation, replacement cycles can be long and disruptive - this is one reason why, for example, you may still encounter point-of-sale systems, Examples include Micros (now owned by Oracle) or Aloha (owned by NCR), which first went public decades ago. The industry is known for unusually high employee turnover and rising food costs in recent quarters. Among other things, these factors contribute to one of the unfortunate complexities of the industry: very high casualty rates. About 60% of restaurants fail in their first year; 80% fail within the first five years. A Year of Transition The COVID-19 pandemic has had a devastating impact on the restaurant industry in some ways. As of the end of 2020, the industry's total sales were $240 billion (27%) below pre-pandemic forecasts. As of December 2020, more than 110,000 restaurants, or more than 10% of all restaurants in the United States, were temporarily or permanently closed. But beyond these challenges, opportunities also arise. The COVID-19 pandemic has had a significant impact on nearly every business in the sector, but it has also forced the industry to rebuild, with many owners beginning to view the adoption of new technologies as not just a business enhancement, but a necessity. For many, innovation is no longer an existential crisis but a life-or-death decision. The National Restaurant Association estimates that during the pandemic, more than 40% of restaurant operators have adopted new technologies to accommodate online orders and contactless and digital payments.