Digital Transformation in Restaurants and Food industry

Digital disruption is omnipresent, get on board or get thrown off the track.

Digital is no longer a purview of only Banking, Insurance, Healthcare or Retail. The Restaurant industry is having pressure from multiple directions. 

Today’s consumer expects fresh food, whether it is in season or not, with an exotic dining experience.

Successful restaurants recognize that the easy path to their customers' stomachs begins in their minds. They need to grab customer's attention and entice them with a memorable experience in order to trigger repeat visits.

Here are some of the applications of Digital disruption in the restaurants & foodservice industry:

·       Digital Signage to deliver eye-catching graphics to engage customers the moment they walk through the door

·       Online reservations using mobile app & flexibility of customization of the menu as per customer taste

·       Chatbots: Restaurants are using virtual assistants to respond to customer inquiries and to process and customize customer orders. Taco Bell, Pizza hut have adopted chatbots to automate ordering process from a social media platform.

·       Robots – Restaurants are using AI-driven robots to increase the capacity and speed of food preparation and delivery.

·       Recommendation engines – Developers are designing applications which use AI to help consumers choose meals & suggest foods based on their eating preferences.

·       Wi-Fi enabled dining spaces for truly engaging customer experience

·       Kiosks – Restaurants are integrating AI-driven self-service Kiosks to reduce customer waiting time and enhance the customer ordering experience.

·       Pay by phone and flexible paying options

·       Loyalty programs based on a frequent visit

·       Digital supply chains to accurate demand forecasting, inventory optimization, and cost reduction.

Restaurants generate vast quantities of data through software that controls everything from scheduling food delivery and shift staffing to taking reservations to manage vendors and inventory to paying bills

Today almost every consumer is making dining decision on their smartphone.  They have tried new menu item based on the mobile ad.  Mobile payments have become the norm now in this industry. Customers would like to order quick meals via mobile and want to use mobile payments.

McDonald’s was the first store to accept Apple Pay.

Starbucks is a leader in digital transformation. Using more than 50mm Facebook fans & over 15mm Instagram followers at their disposal they mastered the social media engagement. First, they created an app to pay for coffee and food in their restaurants. Then they added the loyalty program, starting to craft hyper-personalized offers and experiences for their 24-hour connected customers. The company also developed new digital services to be enjoyed in its physical stores, achieving a highly praised omnichannel approach.

Pizza Hut has started an order and payment-enabled pepper robot. Customers can now have a personalized ordering, reduce wait time for carryout, and have fun with the frictionless user experience.

TGI Fridays, Wendy’s and other big names have all adopted digital technology to lure their customers.

OpenTable, GrubHub, and Zomato are some of the latest apps showcasing nearby restaurants with high-quality pics, presenting a menu with exotic pictures, price, ratings, etc. you can also get offers, deals instantly.

The digital technology available to restaurants has streamlined the lives of restaurant owners much like smartphones have bettered our daily lives.

Digital has entered the restaurants and food industry through the front door and brings many exciting trends.

As consumers expect Apple to come up with a new iPhone every year that makes the earlier model obsolete, similarly they want fresh ways of serving food with fantastic dining experience which is made possible by Digital disruption.

How do you measure the success of Digital Transformation?

Digitization is disrupting every business and is spreading like a wildfire across every sector such as Banking, Financial Services, Insurance, Retail, and Manufacturing.

Digital Transformation does not happen overnight. It is a continuous process. That is why it is very hard to plan too far ahead in a digital transformation program. The technology is evolving so rapidly that your plans will certainly change.

How do you measure return on digital transformation in order to make the timely course correction and improve its success rate? It is even more important that people who will measure the progress know the actual meaning of digital and customer behavior. You will be surprised to know that how many employees/leaders take the customer journey themselves – buying an online policy on their own website, purchasing a merchandise or calling their own customer center to complain.

One of the ways is to break the long-term plan into small doable projects with specific KPI’s. These should not last more than six months.

While traditional metrics of revenue, costs, customer satisfaction should be measured, companies should move beyond these quarterly revenue and margin guidance as they keep pulling them back to short-term tactical focus. The new metrics have to be added to get the right control and visibility of progress.

Some of the new metrics which can be considered are:

·       % of marketing spend that is digital

·       Brand value in the market

·       Reach of an organization in the market

·       Digital maturity quotient of the employees including board and senior leaders 

·       % revenue through digital channels

·       Contribution to digital initiatives from each department like purchasing, finance, HR, IT, Sales & Marketing

Customer Focus:

·       Net promoter score

·       Rate of new customer acquisition

·       Number of customer touch points addressed to improve customer experience positively

·       % increase in customer engagement in digital channels

·       Reduction in time to market new products to customers

·       Change in customer behavior over time across channels

Return on innovation:

·       % of revenue from new products/services introduced

·       % of the profit from new ideas implemented

·       Number of innovative ideas reach concept to implementation

·       Number of new products or services launched in the market

·       Number of new business models adopted for a different class of customers

·       Rate of new apps and APIs to offer new products/services inside and outside the company

Always keep these metrics simple and measure the right things and celebrate even the small successes so employees are motivated.

A digital transformation is a big culture change so there is plenty of fear which leads to resistance. Such inertia has to be changed with clear communication, as to why it is needed to change and what benefits it will bring to each department and employee.

A lack of urgency is the greatest obstacle businesses face when considering the value of digital transformation. Proper planning is important but more than that execution as per the KPIs you select, is what take you through.

From Bullock Cart to Hyperloop – Digital Transformation of Travel

Remember when you were teenager and wanted to go on vacation with parents-you were asked to go to travel agent and get all the printed brochures of exotic locations?  

Then came the dot.com wave and online booking sites like Expedia, Travelocity, Makemytrip paved so much that took travel agencies out of equation.

We used to send holiday postcards to our friends and families back home, which are gone out of business due to social media postings on Facebook, Instagram.

Lonely Planet used to be the traveler’s bible, but now we go to tons of websites like TripAdvisor, Priceline which provide us with advice and reviews on hotels, tours and restaurants.

Now I am able to book my flight online, have my boarding pass on my phone, check in with machines, go through automated clearance gates and even validate my boarding pass to board the plane

The travel industry, like many others, is being disrupted by great ideas powered by digital technology and innovation.

Some of the digital innovations travel industry taken so far:

·     Online booking sites like Expedia, Travelocity, MakeMyTrip, Trivago

·     Mobile optimization with Wi-Fi enablement

·     Targeting and hyper-personalization with Big Data Analytics

·     Digital discounts on travel by Kayak, Tripadvisor

·     Smartphones for research vacations, deals, feedbacks

·     Wearables like Disney band for payments, room keys

·     Bluetooth beacons to guide travelers in the vicinity at airports

·     Virtual reality – see the places without even getting out of home

All such digital footprint of customers are collected and then analyzed by big data analytics to hyper personalized the experience.

With extensively networked digital properties and deep hooks into customer data collected via travel booking sites and social media channels, travel companies are delivering customized dream vacations according to the likes and preferences of today’s travelers.

Today’s trend is towards spending money on memories & experiences instead of material possessions.

Accordingly, travel companies are investing in their digital storefronts and omni-channels to keep today’s hyper-connected travelers snapping, sharing, researching and reviewing on the fly – leaving immense data footprints for marketers to leverage.

Bluesmart is a high-quality carry-on suitcase that you can control from your phone. From the app you can lock and unlock it, weigh it, track its location, be notified if you are leaving it behind and find out more about your travel habits.

Thomas Cook have introduced virtual reality experiences across select stores.

Digital disrupters like Airbnb have already put tremendous pressure on hotels.

Starwood Hotels have launched “Let’s chat”, enabling guests to communicate with its front desk associates via WhatsApp, Blackberry messenger or iPhone before or during their stay.

World has gone from Bullock Cart to Hyperloop today. The future will belong to those using data-based intelligence to offer better experiences, encourage exotic longer and more frequent stays, and build long-term loyalty.

Do you want to get on Digital bandwagon? 

Product recommendations in Digital Age

By 1994 the web has come to our doors bringing the power of online world at our doorsteps. Suddenly there was a way to buy things directly and efficiently online.

Then came eBay and Amazon in 1995....... Amazon started as bookstore and eBay as marketplace for sale of goods.

Since then, as Digital tsunami flooded, there are tons of websites selling everything on web but these two are still going great because of their product recommendations.

We as customers, love that personal touch and feeling special, whether it’s being greeted by name when we walk into the store, a shop owner remembering our birthday, helping us personally to bays where products are kept, or being able to customize a website to our needs. It can make us feel like we are single most important customer. But in an online world, there is no Bob or Sandra to guide you through the product you may like. This is where recommendation engines do a fantastic job.

With personalized product recommendations, you can suggest highly relevant products to your customers at multiple touch points of the shopping process. Intuitive recommendations will make every customer feel like your shop was created just for them.

Product recommendation engines can be implemented by collaborative filtering, content-

based filtering, or with the use of hybrid recommender systems.

There are various types of product recommendations:

           ·        Customers who bought this also bought - like Amazon

           ·        Best sellers in store – like HomeDepot

           ·        Latest products or arriving soon – like GAP

           ·        Items usually bought together – like Amazon

           ·        Recently views based on history – like Asos

           ·        Also buy at checkout – like Lego

There are many benefits that a product recommendation engine can do for digital marketing and it can go a long way in making your customers love your website and making it their favorite eCommerce site to shop for.

Advantages of product recommendations:

·        Increased conversion rate

·        Increased order value due to cross-sell

·        Better customer loyalty

·        Increased customer retention rates

·        Improved customer experience

Application of Data Science to analyze the behavior of customers to make predictions about what future customers will like. Big Data along with machine learning and artificial intelligence are the key to product recommendations.

Understanding the shopper’s behavior on different channels is also a must in personalizing the experience. Physical retail, mobile, desktop and e-mails are the main sources of information for the personalization engines

Amazon was the first player in eCommerce to invest heavily on product recommendations. Its recommendation system is based on a number of simple elements: what a user has bought in the past, which items they have in their virtual shopping cart, items they’ve rated and liked, and what other customers have viewed and purchased. Amazon has used this algorithm to customize the browsing experience & pull returning customers. This has increased their sale by over 30%.

Yahoo, Netflix, Yahoo, YouTube, Tripadvisor, and Spotify are other famous sites taking advantage of the recommender systems. Netflix ran a famous 1 million dollars competition from 2006 till 2009 to improve their recommendation engine.

Many commercial product recommendation engines are available today such as Monetate, SoftCube, Barilliance, Strands etc.

Ultimately most important goal for any eCommerce platform is to convert visitors into paying customers. Today the customer segmentation era as gone and its hyper- personalization. 

Product recommendations are extremely important in digital age !!

Digital Transformation – Age of Instant Gratification!!

Remember the scenario of 1990s office environment:

• We had our family photos pined on the board,
• Our contacts were written by our hands and arranged in alphabetical order for easy retrieval,
• For calling anyone we used to have one black dialing phone at the end of the hall
• Most of the time outside dialing was allowed to only select few privileged seniors,
• We used yellow post-it stickers to put our thoughts on the bulletin board,
• Any software delivery to customer was copied on the 8 inch floppy disk and shipped across continents to be hand delivered.

Now fast forward to 2016 – we have Twitter and blogs to post our thoughts, Pinterest and Instagram to post our photos, no more wait for calling anyone, Facebook to talk to friends, smartphone to store our contacts, we can do not only audio but video calls via Skype or Face Time and software deliveries are instant via email.

Today we live in the world of instant gratification and digital transformation is making it happen.

Our smartphones have become more important than our spouses. We can’t live without them. They can do the jobs of alarm clock, camera, radio, torch, music systems, maps, books, news channels, credit cards, language translators & play games. We can do anything and everything from anywhere at any time. They are no more just a communication device, but has become our life’s remote control.

Here are some examples of Instant gratification – here and now!!

UberRUSH – Delivery service by Uber with ability to directly talk to/ chat with couriers to track the package in real time instead of notification or sms alerts.

Click and collect your merchandise, multi-channel easy returns, free WiFi access while shopping, the ability to check stock online, update customer via beacon technology… these all can enhance the high street experience, bringing it more real time to customers.

An experiment of customer experience started at LaGuardia Airport, where food and Beverage Company OTG had set up 300 tablet kiosks located in the terminal. As a traveler, you can use the tablet to check flight status, order food, play games or shop at airport stores. When you order food or purchase products, they can be delivered to you at your gate. While improving the travel experience, this is also creating more revenue for the restaurants and shops. This new approach has become so successful that it is being rolled out at other airports. This is instant happiness to customers.

Digital transformation is helping to reduce customer information gaps, wait times and frustrations.

"We will revert immediately" is not fast enough. Customer wants the service NOW!!

9 traits to become successful Digital Transformation leader

Digital Transformation is inevitable.

Across all industries, from consumer goods to health care, manufacturing to financial services, companies are going digital. Digital technologies from social media to mobile computing to big data to the Internet of everything are transforming businesses in these industries.

But how many of them are successful? As per surveys this number is less than 10%. Are you one of them? It all depends on how you lead the digital transformation efforts.

Here are some of the traits you need to show to take the organization on the digital ride:

1. Start the Digital as company wide initiative and not in small departments. Get the commitments from the board of directors and CEO for digital.
2. Develop a Vision & Mission statements that are in line with company growth strategy. Ensure it does not remain only as floor branding and marketing. Describe how the company will actually change: How will you engage differently with customers? How will you rethink your operations?  What new business models are possible?
3. Bring in the cultural change that is required for Digital Transformation. People are extremely important in this roller-coaster ride. Many employees have seen visions come and go. Focus on communicating the vision and helping people know what it means to them
4. Be customer obsessed.  With technology and customer habits changing so quickly, developing a deep and detailed view of customer behavior across all the channels is foundation of digital success.
5. Experiment a fail fast approach with data driven measurements. As W Edwards Deming’s quote says – In God we trust, all others bring data”. Dare to rake risks and take decisions based on the data and move on.
6. Connect with industry leaders & influencers to understand what work and what not. What are the current trends? Keep yourself updated.
7. Simplify the subject so everyone in the company can understand and contribute to your efforts.
8. Connect with partners who support your vision – and not only external third party technology vendors but your own customers and most important your employees.
9. Lastly remember Digital is a long term commitment. Don’t cut the investments & pull back employees on billable roles in just one quarter saying it’s not working. This is the mistake most of the companies are doing. Nurture the efforts like a new born baby as she takes over a year to walk on its own. Have patience to see the results.

There are various successful examples of Digital Transformation in the industry from Starbucks to Uber, from Netflix to Nestle with their leaders showing these and many more characteristics.

My favorite saying for leaders now is “Uber them before they Kodak you”.

Why Open Source is gaining momentum in Digital Transformation?

Once upon a time in IT, using open source simply meant Linux instead of Windows, or maybe MySQL instead of Oracle.

Now, there is such a huge diversity of open source tools, and almost every leading digital business and tech startups are making extensive use of them. It’s been a remarkable turnaround for open source over the last 10 years, placing the trend firmly at the heart of the digital revolution.

The explosive growth of e-commerce, mobile and social media has completely altered the customer’s lifestyle and buying habits. Today, organizations are expected to engage with customers in Omni-channel environment. They need to create a customer journey. This is the driver of digital transformation.

A key differentiator for these companies is often real-time interaction with the ability to try something out fast, to create a new experience in real time. They have two fundamental challenges – reducing costs and growing revenues.

There are various advantages of open source tools and platforms:

• Costs: The less a company spends on proprietary software, the more it can dedicate to other facets of digital transformation efforts, since there is no need to pay per server, per core or per user license fees
• Faster time to market: Less expense & time that would go with traditional, lengthy evaluations of legacy software solutions and commitment to specific technologies that may lock them in
• Fail Fast:  Quickly test and experiment with emerging technologies without the risk & see whether it succeeds or fails and move on
• Security advantage: the transparency of open source code means that bugs are more easily found and patched, and users can inspect the code they're using themselves, which is not so possible with commercial products
• Community Backing: Open source software allows companies to derive benefit not only from their own IT employees, or from the employees of proprietary software vendors, but from the whole open source community
• Customization: The flexibility provided by open source allows users to add features freely, and reformat, refactor and redevelop their platforms however they see fit

Here are some examples of open source successes:

• MongoDB a NoSQL Big data database is used by Expedia, MetLife for customer 360 view 
• Liferay portals are used by Santander Bank, Allianz Insurance & London borough
• Apache Spark has emerged very quickly as a faster successor to Hadoop's MapReduce
• LinkedIn’s developed and built Apache Kafka as the messaging backbone 
• Drupal is used by GE, P&G and other global organizations for their websites
• Google, Amazon, Facebook Microsoft and even Apple have made their platforms open to the public.

The rapid adoption of open source technologies across organizations has provided a network-effect of reliability in scalability, affordability, and adaptability. 

Not only are these traits critical to open source technology, but they are also necessary for successful digital transformations in business to bring in whole new business models and the platforms that are dominating our economy.