The Future of Restaurants – Part 32018/05/21
Restaurants are in flux. Sweeping change is transforming the landscape at a frantic pace, which got us to thinking: What does the future of restaurants look like?
From time to time, we’ll be outlining the improbable, imperiled fortunes of the industry. Part 3: The restaurant with no prices.
Hotels play a nefarious game. They sell sleep (at least they used to; now you can’t move without tripping over a gift shop / cocktail bar / dancehall) and yet my Sunday night’s sleep is priced that much cheaper than my Thursday night’s.
Now, anyone that has had a shitty Sunday slumber knows exactly how false that financial premise is, but let’s focus on the real issue here – that the same service is retailed at a different rate. And when you equate it to something that isn’t differentiated, like the value of waking up for work feeling sharp, then it begs a fair few questions.
The other anchors of the hospitality industry aren’t immune to this approach. The same G&T might be full price on a Friday, 2-4-1 on a Tuesday and bundled with a series of snacks at Saturday lunch. However, while the net result might be the same – a cheaper product, discounted from a ‘rack’ rate – bars & restaurants have found creative ways to camouflage the dynamic nature of their pricing models. The same product doesn’t cost more or less, the offer simply changes.
People are drinking less. And the tenor of booze promotions have shifted in the last decade: Happy hours are frowned upon and alcohol advertising is heavily sanctioned (and could be abolished altogether).
‘Quality over quantity’ – the ballad of moderation – is no bad mantra. But it does limit how the trade can communicate. If guests are only drinking a single beer, wine or cocktail, then there aren’t that many promotional avenues available to the bar or restaurant.
"'Quality over quantity’ – the ballad of moderation - is no bad mantra. But it does limit how the trade can communicate"
Drinks have always been the offer staple in restaurants. High GP, low labour, evergreen appeal and the chance to drive ancillary revenue, without discounting the main event – the food. As dining habits change, and guests become more comfortable combining food & drink (crazy, right), then bars & restaurants are more likely to gain traction with offers that package them together. Pizza & beer; Steak & red; Oysters & white; ya know, food & drink. But, in the future, this won’t be enough.
In the future, people will drink even less. Alcohol will play an increasingly marginalised role in dining. Bars & pubs will still exist but act as a communal meeting place, more than drinks dens.
Technology – as part of an ecosystem that combines POS, booking, website, operational and industry data – will enable proprietors to forecast more intelligently and take immediate action should the day or night ahead look fallow.
How much should you be making on a Tuesday night? No, I’m not asking how much money you made last week / month / year. I’m asking what share of consumer spending can you gain within your catchment area? You don’t know, but the restaurants of the future will.
This data, matched with a more pragmatic mindset (we can thank Deliveroo, MealPal & Just Eat for something), will spur a new generation of operators to vary their pricing by day, hour and month. Dynamic pricing is currently a novelty; it’s a gimmick that a venue can use to establish identity and gamify their offers.
But in the future, just as the value of your sleep will vary from night-to-night, the price of your lunch, dinner and drinks will peak and pale. Welcome to the future of restaurants.
To read part 2 of the series, click here.