While the ripple effects of the pandemic have been felt across all industries, the restaurant industry, in particular, has been among the hardest hit. As restaurant operators and owners are forced react quickly to unexpected new realities, Shu Chowdhury has some insights to share on the current state and future of the industry.
A serial technology entrepreneur, systems expert, and consultant, Chowdhury also founded SALIDO, a full-stack restaurants management software company with a mission to improve the hospitality experience. Salido recently announced its acquisition by North American Bancard (NAB), and its customers include top names, such as Eataly, Restoration Hardware, Eleven Madison Park, and ABC Kitchen.
In this interview, Chowdhury discusses how the relationship between restaurants and technology has changed, what measures restaurants can take to ensure operational efficiency, and his predictions for restaurant industry recovery—all in light of the COVID-19.
How do you think the pandemic has shifted the relationship between restaurants and technology?
“Restaurant operators have been forced to evolve their technology infrastructure both in terms of outsourcing to marketplaces, as well as purchasing direct ordering technologies.
Restaurant operators have had to rely on a combination of business savvy and technology to develop new customer channels to drive revenue via online ordering, delivery, meal kits, and more, to help work through their already razor thin majors.
Additionally, restaurant operators are on the frontlines of testing public safety procedures—many of them technology-based—like temperature checks, contactless transactions, virtual menus, and curbside offerings. The generally old-fashioned hospitality industry has shifted from a slow embrace of technology to a rapid reliance on it to keep their patrons safe.”
In light of the pandemic, what are some technology and business measures that restaurants can embrace to ensure operational efficiency without additional costs or labor?
“There’s not a one size fits all playbook for all hospitality operators, but if we focus on the area of hospitality which has experienced the most displacement, it’s fine and casual dining table service operators. The most essential move for implementing delivery is properly getting listed on the 3rd Party Delivery (3PD) Marketplaces. Next, the operator must establish their direct ordering channel across direct online ordering and phone-based ordering for both pickup and delivery.
Additionally, operators can work with specialty ordering solutions like Tock where you can sell meal kits and make delivery appointments directly without the marketplace fees. This way the operator can maximize the channel opportunities to drive the most amount of orders possible.
Operations efficiency via smart cost management across labor and food is essential. Operators can still provide great dining experiences but need to make sure they set their customers expectations around reduced menu choices and less staff to operate.”
How can restaurants set these customer expectations you describe?
“Customer expectation management is the new CRM in the time of COVID.
Regarding the playbook for customer expectation management, it’s a very fine line as not all restaurants are created equal in terms of customer demand. Those restaurants which have to make the choice between an empty table and a rude, disconnected customer are in the challenging situation of business survival and essentially the choice is made for them. Other restaurants who can choose their customers based on their limited capacity will curate and filter to the best of their ability.
Frankly, I’ve experienced multiple situations where customers spoke up on behalf of the restaurants when a testy, unappreciative customer has criticized ‘slow’ service or been vocally critical of the lack of the usual staffing levels. It is a privilege to dine out right now. Customers need to realize that and if they can’t make an adjustment the way the entire world is, they should probably stay home.”
What are your predictions for the restaurant industry recovery?
“There is only so much that restaurants can do on an individual or one-off scale. While safety measures are obviously most important, local, state, and federal governments will need to ease business risks to ensure successful business operating environments.
Measures must be taken to ensure business operator safety and success. The first of which is tax waivers, including federal waiver of payroll tax, state and local waiver of sales tax, labor tax credits on rainy days, and labor and inventory tax credits if the state or local government needs to enforce another shutdown. This will go a long way to help hospitality operators take the risks of operating in service of their neighborhoods in partnership with the government by sharing risks via operating incentives and protection.
Additionally, there needs to be government mandates to regulate both third party delivery marketplace fees and payments processing fees for both online and on-premise orders.
Our reality is that outbreaks will continue to happen and pre-COVID dining habits will not return as soon as we want. The vast majority of consumers will enjoy outdoor dining at minimum and ease into indoor dining as they become more comfortable with safety procedures. That being said, we are also heading into flu season, so that will naturally create an environment where diners will be more conservative with their dining habits, leading to an uptick in delivery and takeout options.”
This interview has been edited for length.