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Why restaurants must go 100% digital to survive post COVID?

July 08, 2020 |   | 

It’s great to see the government stepping in to help hospitality. But long-term survival is about far more than tax breaks and meal discounts. Another battle is raging — that every business must win.

The sense of relief, hope and positive thinking is great to witness, as F&B businesses open their doors across the UK. The new signage is doing its job, staff have been trained and customers are eagerly returning.

But any early optimism will evaporate fast, unless bars and restaurants tackle a problem that’s been stalking them for years — how to preserve wafer-thin margins. Even VAT relief from the government until January 2021 and some discounts in August to encourage demand is not a sustainable solution.

With the arrival of COVID-19, the challenge of being profitable has intensified. F&B businesses can’t expect to hit yesterday’s volumes and get anywhere close to normal margins. Something else needs to give, somewhere … or more businesses will fold over time. Some have already.

But there’s good news. Answers are within easy reach.

What no-one should have missed

The coronavirus pandemic has transformed the world, especially how we use tech and data. In fact, analysts at McKinsey reckon that over a matter of weeks, we’ve leapt forward five years in consumer and business digital adoption[1].

This should be a huge wake-up call for F&B businesses.

Before COVID-19’s arrival, it may have been possible to ‘wing it’ with cost control. A busy restaurant or bar could sometimes get by with a mixture of legacy POS, paper records and manual processes. If an operation’s figures were slightly fuzzy and out-of-date, it could be tolerated.

But that world has ended.

Over coming months, only a laser-like focus on costs — enabled by full digitisation — will enable the F&B sector to transform in the ways that other industries are adopting … to survive.

Never has there been a time when granular visibility and control of costs is so essential. 

How to transform quickly

It’s easy to feel overwhelmed right now. F&B business are having to deal with increased regulation, lower footfall, unpredictable customer behaviour and the pressure on sales through factors like the public’s financial insecurity and unemployment. Then there are added factors like changing competition from dark kitchens and food delivery aggregator costs.

So it might feel as if you’ve got enough on your plate already.

But cost control is the next big wave. You need to harness it — for your business to survive in a world where restaurants operated with fewer staff and higher overheads. In fact, cost control will be your new business model and key differentiator.

You’ll need a POS that covers every moving part of your operation, end to end, from food costs, to inventory management, to staff scheduling. Every penny earned and spent must be measured, captured and tracked in real-time. There must be no dark corners where costs go unnoticed.

However, most POS systems on the market aren’t designed this way.

Instead, your back-of-house is out of sync trying to track the movements of your front-of-house and keep-up with all the data input requirements (batch updates, stock counts and movements etc.) — with all the errors, duplication and lag time that results. If your business is a multi-site operation, the issue is magnified tenfold.

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Even fully integrated POS and back-of-house tools don’t cut it in this era. They are essentially a ‘fix’ and after-thought, that is not built into the fundamental design of the core system… it’s an old school approach that doesn’t deliver the level of control needed.

The good news is that advanced systems (that go beyond POS and designed as ‘all-in-one’ restaurant management systems) use the latest IT to rethink the way your restaurant operations run to help reduce costs and boost productivity.

They are easy to use and fast to deploy, whether you have a single restaurant or a vast chain.

You’ll be able to:

Reduce overall food costs: You’ll have accurate data to negotiate prices better with suppliers. You can control prep plans and portion sizes, and avoid wastage and theft. It takes just seconds for staff to input production data and many processes are highly automated.

Manage your inventory in real-time: You can switch to a more agile approach that eliminates costly guesswork and over/under-ordering, while making stock-checking super-easy via a mobile phone or tablet.

Decrease overheads: You can create staff schedules that match perfectly with busy periods, while also improving staff efficiency/performance through POS-enabled incentives.

Unleash AI: As the F&B industry ebbs and flows in uncertain times, you’ll be able to see patterns. Your POS will also identify best-sellers, your most profitable dishes, and you’ll see how to make tweaks that’ll improve margins without sacrificing quality. 

Increase customer loyalty: A top POS will enable you to better understand your customers — and reward their loyalty with tailored promotions.

Simplify your IT and save money: The right POS can save you hassle. You can get an end-to-end system that avoids the need for separate modules and software licences for a POS or apps for inventory, purchasing, forecasting, kitchen management and more. Just get everything in one package — with accurate data flowing freely across your POS, delivering up-to-the-minute accuracy.

Obtain real-time visibility and control: With the right POS, you’ll be able to see your profit and loss instantly. There’s no need to wait for your accountants to process month-end, or even year-end statements for performance updates. You can drill into every layer of a transaction, every action that took place, every stage – purchase, production, sale, delivery and loyalty. With thousands of workflows at any given moments, you’ll get important, actionable insights with AI-infused, predictive analytics.

It’s a new way of thinking – for a new era

A modern unified POS will reinvent your processes end-to-end  — not just mimic traditional, manual steps.

Cash registers or simplistic POS systems will not help with the running of your restaurant operation, especially post COVID-19. But a real-time, unified system offers agility to handle constant change with ease.

It’s a technical and mind-shift that’ll help you to make your business stronger and more resilient, whatever challenges you face next.

If the government’s new measures buy you a little breathing space, then use this time to address your underlying cost control challenge — and become a truly digital business.

[1] The COVID-19 recovery will be digital: A plan for the first 90 days – (McKinsey, 14 May, 2020)

Simon Dadswell

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