A recent report by the World Bank projected a sharp decelerate and a downturn in growth in advanced economies. This is due, in part, to the unwinding of the fiscal and monetary policy support that occurred during the pandemic. In addition, the World Bank President, David Malpass, said, “The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hampering growth. For many countries, the recession will be hard to avoid.”
Forbes reported that, according to TD Securities, there is more than a 50% chance that the U.S. will fall into a recession within the next 18 months.
Of course, it isn’t easy to forecast the extent of a downturn in growth. That said, it’s essential to start planning now and determining ways to increase your market share and retain customers so that you can weather a slowdown with little consequence to your bottom line. We all remember the Great Recession. In one year, from the beginning of April 2008 to the end of March 2009, about 4,000 restaurants closed nationwide. Among the hardest hit were independent operators.
The good news is that there are actions you can take now to help you in the future, despite a possible economic meltdown. Let’s explore the options.
Leveraging Restaurant Technology and Data
The restaurant industry had typically been one of the last kids on the block to leverage technology. After all, “good food, good wine, good service” was our motto for some time. Then the increasing demands for an experience entered the market as well as ever-evolving technology, and the industry went from simple service practices to state-of-the-art technological enhancements and data-driven operations. At least, for some.
Adapting technology has become one of the cornerstones of success and is especially important with the potential of a recession looming and a downturn in growth. Knowing your customers and having insights into your business is more important than ever. Remember that great concepts and companies grow and are successful in a variety of economic conditions because they meet customers’ needs in new and meaningful ways.
A few prominent people in the industry shared their thoughts on utilizing technology.
Damian Mogavero is the founder of the international restaurant analytics software company, Avero. He is also the CEO and founder of DM Ventures and was named “Data-Dining King” by Bloomberg. He shared that during previous downturns, some of his customers leveraged technology to drive results.
DM Ventures is a hospitality consulting and investment firm that empowers restauranteurs through the use of data analytics, competitive strategy, industry collaborations, and disruptive innovation. Avero processes over $26 billion in annual food and beverage transactions and services over 50,000 hospitality professionals in 70 countries through the use of intelligent data.
Rom Krupp, founder, and CEO of OneDine has over 24 years of experience in innovative technologies geared toward the restaurant and hospitality sectors. He reported, “Leveraging data across a variety of platforms to gain insights into customer behavior, including customers and their spending, and being more effective with marketing to drive results is key to a growing enterprise.”
OneDine empowers guests to browse the restaurant menu, order, and pay from their mobile devices. It incorporates a company’s loyalty program, a customer survey for leveraging data, and generates customized text messaging and emails based on guests’ unique dining profiles.
Sterling Douglass, Co-Founder, and CEO of Chowly, also bolsters the case for leveraging technology to remain profitable during slow times. He suggests that operators “integrate POS, customer information, and data into a single system to be more efficient, reduce costs, and provide excellent service.”
Chowly integrates a restaurant’s POS with all third-party delivery services and allows operators to manage all third-party menus. Online orders are automatically sent to the kitchen. Additionally, it enables restaurants to quickly set up and launch a successful virtual restaurant, today’s go-to for additional streams of revenue.
Technology to the Rescue
Technology has transformed many industries, from construction and finance to manufacturing, education, and healthcare. These industries witnessed significant gains in productivity, reimagining almost every facet of their operations. For those of you who have yet to join the technology revolution, now’s the time. Today, technology is used to improve the customer experience, reduce costs, and optimize marketing strategies.
At EMERGING, we work with companies to use technology to improve and expand the customer experience, driving revenue and profitability for our customers and partners. We execute real estate, supply chain, data science, finance, sales, and labor strategies to scale growth while mitigating risk.
How do you recession-proof a restaurant?
Today, it’s all about the experience. Even when money gets tight, dining out is an inexpensive approach to celebrating milestones and special occasions. Make sure your restaurant is aligned with these values and mitigates any risk by diversifying and extending your customer reach.
Consider developing an experience-based atmosphere and creating Instagram-worthy photo opportunities. You can use technology to create interactive features, improve customer service, build brand loyalty, reduce costs, and extend your reach.
What did restaurants learn from the last recession?
Restaurants have survived extremely tumultuous periods. Before these times, the restaurant industry had settled into a reasonably old-world approach. Few were using technology outside of basic websites.
Then, tough times hit, and operators began realizing the benefits of harnessing technology. They started creating their own apps, using their POS system to its full potential and using technology to provide their customers with a personalized experience. Technology can help restaurants adapt to changing times and ensure a loyal following, whether engaging through meal delivery, curbside pickup, or dining in.