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How restaurants will use artificial intelligence to boost sales
Source: Ewan Sargent

Tracking technology can help restaurants plan efficiencies around staffing and serving, as well as help them market their restaurant effectively.

Artificial Intelligence is going to impact us in many ways in the future.

But don't think you'll escape from it on a night out with friends at your favourite restaurant.

It might feel like it's just fun eating and drinking good things, but there could be a lot more going on behind the scenes than you realise.

Take the music. Good isn't it? Nice and loud.

But in the morning the receipt on the kitchen table shows you spent way more than you had planned. Once again.

In future if you ever wonder why a restaurant seems to fit uncannily well into your life, it might be you are being helped or played (depending on your point of view) by artificial intelligence.

AI is coming to New Zealand's restaurants and bars.

Restaurant Association president Mike Egan says artificial intelligence will disrupt the restaurant industry but it will be good for restaurants.
Restaurant Association president Mike Egan says artificial intelligence will disrupt the restaurant industry but it will be good for restaurants.

Restaurant Association president Mike Egan made that clear in a report to the recent combined association and Eat NZ conference in Christchurch.

Egan, a Wellington restaurateur, outlined some of the technology and analysis that will bring sweeping changes, based on the work of Swedish company Livit, which has designed 13,000 restaurants in 43 countries.

It left the audience of about 200 hospitality leaders partly shocked, partly dismayed and partly excited about its possibilities.

One audience member called it a dystopian vision, but others said just using some of what was possible might help in a tough industry.

Livit has put huge resources into studying how to make restaurants more attractive and profitable, including launching a test pizza restaurant called Fast Fine 18/89 in Stockholm.

Egan said restaurants would increasingly be driven by what Millennials (born 1981-1996) wanted and 78 per cent of them wanted this: they would rather spend money on a desirable experience than spend it on something desirable.

It's the experience that counted, "so we have to rethink our restaurants as gathering places to socialise", Egan said.

The 18/89 restaurant aimed to provide that experience.

Even though it was a fast pizza and salads place, it was given a beautifully ornate yet contemporary fine dining look which created the right mindset and backdrop for Instagram posts.

The pizza toppings were designed by a Michelin chef, yet no chefs or cooks worked on the site - it was fast production run by untrained students.
Diners were happy to pay much more for the same pizza if it came in a beautiful, luxurious box.
Diners were happy to pay much more for the same pizza if it came in a beautiful, luxurious box.

It used a pizza box that cost a crazy $1.75 each to make, but it was worth it because it wowed diners. It was silky to touch. It slid open with smooth friction, just like a high-class Apple product box, giving a luxury feel.

Style over substance? Not at all. Surveyed diners said they would pay 27 per cent more for a pizza coming from a box like that rather than from an ordinary box. And it 's the same pizza.

Even better, 80 per cent of the boxes sold ended up being photographed and posted online by impressed diners, creating a big free online marketing effort.   

The test restaurant was packed with measuring and tracking technology to increase efficiencies what worked in helping restaurants do what they do better.

It covered everything from tracking customers movements (their cell phones) inside and outside the restaurant, even to where they worked and lived. Their eye movements in the restaurant were tracked using Google Glasses, heat sensors on all seats helped establish different daily seating preferences (some days more group tables needed setting up), and the usual ordering trends were analysed.

Because the design was so nice and clean, customers felt happier ordering alcoholic drinks. So booze sales were 21 per cent of turnover instead of the usual 2 per cent for a pizza restaurant.

This research produced fascinating insights that helped the restaurant get more customers and make more money.

For example when the same salad was served on a plate instead of a bowl, customers thought there was 15 per cent more salad. Smoothies that were whipped (adding 12 per cent air) were thought more satisfying and filling. So for no cost, customers who order on volume rather than calories could be made happier.

It was spotted that too few people bought second drinks on busy Friday and Saturday nights. It was spotted that if a people wanted more drinks and there was a queue at the bar, then the group tended to get up and walk out together. The answer was to put a button on the table that invited being pressed to get more drinks brought to the table. This lifted drink sales by 9 per cent on Friday and Saturday nights.

Restaurants will be able to use automated cues to steer diners into spending as much as possible.

Music was really important.

Livit used 50 McDonald's restaurants to test its impact. Taking playing no music as a baseline, it was found sales dropped 4.3 per cent if random music from Spotify was played, if half the music was "brand fit" so aimed at the McDonald's customers and environment, then sales went up 1.2 per cent. If all the music was "brand fit" sales jumped 4.8 per cent.

Even more fascinating, it was discovered that the music volume influenced sales. Music played more loudly caused diners to buy more unhealthy foods like pizza and burgers. Louder music towards the end of the evening made people stay longer and buy more. Quieter music boosted healthy food sales.

The volume also mattered as to time of day and how many customers were in the restaurant (counted by those cell phones).

All this information was fed into the software, which automatically analysed all the factors and controlled the music and volume to maximise sales.

Artificial scent was also used to drive sales at different times. Wood-fired oven scent pushed into the room lifted pizza sales, but when basil scent was used, salad sales went up 13 per cent, which was useful during week days when people tended to order more healthily.

Lighting was also controlled by AI so the restaurant presented the most attractive look from the outside. When it's light outside diners don't want to go into a dark cavern. When it's dark outside, they find a different light attractive.

All this measuring and tracking was happening without the customers knowing it was happening.

But it's interesting that when customers were asked to let the restaurant geo-track them they opted out.

This was to help have the pizzas in perfect condition for phone orders. The geo-tracking would have timed the pizza to go in the oven when the customer was 70m away.

The lesson here was tracking diners when they don't know it works best.

Restaurateur Joel Christian says restaurants will struggle if they don't have menus that match Millennial food desires.

What Millennials and Gen Y want in the way of actual food is another matter.

They are driving changes already and this will accelerate, Christchurch restaurateur Joel Christian of The Monday Room told another session.

He said the overwhelming food trend overseas, and in New Zealand, and for all demographics, was mindful choices around ordering food.

That meant knowing where the food had come from, how it was produced, whether it was organic, whether it was ethical and whether it was supporting earth focused sustainability.

Diners now wanted more meat-free meal options and allergen-friendly menus with dishes that catered for gluten-free in particular.

Christian said at his first job at a fine dining restaurant in 2005 a vegetarian main might be a bowl of new potatoes but restaurants couldn't get away with that now.

Vegetarian and vegan dishes had to be at the same standard as the rest of the menu.

It was a lesson he'd learned at The Monday Room because groups would often go where the sole vegetarian or vegan member was looked after well.

Christian said another big issue for Gen Y and Millennials was to being given healthy food choices, or at least the perception that they are healthy.

This included providing an interesting lineup of non-alcohol and low alcohol drinks "not just the row of dusty Amstel Lights in the back of the fridge".

"If you don't have it, they will just drink tap water, which is no good for the bank balance," he said.

Christian said Millennials were probably now the new definition of the middle market and this was contributing to the decline in fine dining.

"They want pseudo fine dining. They want the quality food - nothing frozen, nothing from processed ingredients - but without the silver service, starchy linen and stuffy atmosphere.

"It's about having a space people feel comfortable in and looks fancy enough for those all-important Instagram photos while delivering a great product at an approachable, non-alienating price point.

"We are a fickle lot," said Christian, a Millennial.


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