The concept of digital disruption, or disruptive innovation, first gained prominence around 25 years ago, coinciding, of course, with the mass roll-out of the internet. It’s fairly easy to understand – new technology ‘disrupts’ a traditional business model. So, your Netflix account takes over your Blockbuster video account; Uber replaces taxis; Amazon replaces, well, lots of things.
While people tend to feel sympathetic towards companies like Blockbuster, which is still venerated nostalgically by many, there is also a sense that they should have seen it coming. Even today, when it is apparent that the future of business is digital, many sectors refuse to see what is surely coming down the line. Finance, and by that we mean the traditional finance industry, not FinTech, remains incredibly cumbersome; research how banks move money internationally and you’ll be surprised how antiquated it seems. Healthcare, too, is an industry that needs to wake up to a digital future.
But if there is one sector that has been given a pass all these years, it is hospitality. In 2021, many of us will still know a dive bar or restaurant where the idea of using something mundane like a credit card seems positively futuristic. That’s fine, and, in a way, it’s part of the charm. Having a beer or a meal with friends is something that feels so intrinsically natural that there was no hurry for proprietors to change.
But the Covid-19 pandemic should give them pause for thought. For many industries, the pandemic acts as a catalyst for trends that were already building. For instance, remote working was a growing trend before anyone had heard of Covid-19, but the outbreak convinced many employers that it was possible, and perhaps more efficient and productive than having an office full of employees.
And, so we can see some trends in the hospitality industry that were growing pre-pandemic, and which should be tackled now. Below we will discuss how the most traditional of industries, hospitality, should be preparing for a digital future:
Preparing for Cloud Kitchens
What is a restaurant? Is it the building or the food? Both? For some, it is now simply an idea. Cloud kitchens, sometimes called ghost kitchens, had been popping up before the meal delivery boom during 2020. You just need a website, somewhere to prepare meals and a system to deliver them. Many have been successful, but the threat to traditional restaurants comes from the fact that the likes of Amazon and Uber Eats have their eyes set upon this industry.
Amazon has invested massively in Deliveroo, and some believe the restaurant-from-home model will hit over 50% of all quick-food restaurant business in the coming years. Restaurants should be looking at making themselves hybrids, with one part of the business for dine-in customers and another part for the digital food delivery industry. It does not have to be the same type of food, and the concept of ghost kitchens means the restaurant can even operate under different brands.
Point of Sale (POS)
The pandemic acts as a catalyst for some things, but, for others, it could herald a new normal. POS (point of sale) technology was embraced by some bars and restaurants long before the Covid-19 outbreak, but it was always seen as, let’s say, kind of hipster. If you take something like the EPOS system from Touch Bistro, which is designed to manage sales, inventory, transactions, cut down on mistakes etc. A handy tool, and one that has been embraced by many bars and restaurants.
You can click here to read more about Touch Bistro and the POS solutions industry, but the point is that arming employees with iPads or other touch screen devices might be seen as a necessity in a post-pandemic world. Indeed, the trend might be moving to a world where the server is cut out of the transaction altogether, with POS devices given to customers. Cutting down on contact between staff and customers in hospitality is a very real prospect. Simple things: customers sitting at a bar, a server handing a chef a written order – these could disappear, perhaps even be against the law in some respects. We might all have a cash-only dive bar in our neighborhood, but it might have to roll with the times to survive.
As with the threat of ghost kitchens and the Amazonification of the food industry, there is a fundamental danger to businesses that don’t have an online presence. It’s about more than be listed and findable online; rather, it’s about offering the first step in the food experience – pre-ordering, booking tables etc. We might look at businesses that seem like they don’t need to go digital – let’s say a popular taco truck. But even being a hidden gem that thrives on word of mouth could be a thing of the past. People expect convenience. Being able to book a particular table or having your taco ready by the time you walk from the office to the truck is the kind of simple expectation consumers have, and businesses who don’t embrace it might fall by the wayside.
Many thought the idea of hotels couldn’t be digitally disrupted. After all, the industry remained unchanged in its fundamentals for centuries. And then Airbnb showed up. Not only is there the ease of booking and diversity of property choices, but there is a direct connection between the property owner and guest. That gives the personal touch, which can really have an impact on the overall experience.
Some hotels are getting smarter, however, and it is leading to the ability to offer a personalized experience for guests. The Wynn, for example, has collaborated with Amazon to offer a kind of ‘hotel Alexa’ to help you throughout your stay. Automated check-in services are also helping eliminate queues, and the IoT (internet of things) is being used in many rooms to link up gadgets to your phones and tablets. But these are just a select few hotels and hotel companies – the vast minority. The idea of inn-keeping is the most traditional of hospitality services, but it is exposed to digital competitors just like every other sector. Smart hotels are one way to future proof themselves against that.