Study: Nearly three in 10 Americans say technology is ruining the hospitality industry
Nearly half (48%) of diners have not used and are not interested in trying mobile wallet payment options.
Technology plays a prominent role in nearly every aspect of U.S. consumers’ lives, and the dining out experience is no exception. But, it seems that for some Americans, the spread of mobile, digital and artificial intelligence (AI) technology is unwanted, considering 28% of U.S. consumers agree that technology is ruining hospitality, according to new research from Mintel, Chicago.
However, it may be the fear of the unknown that’s influencing these perceptions as a large minority of Americans have never used certain types of technology when dining out, and are also not interested in trying them. For example, two in five consumers have not used and are not interested in trying a restaurant mobile app (44%) or kiosk (40%) to pay. Nearly half (48%) of diners have not used and are not interested in trying mobile wallet payment options.
Given that less than one in five (17%) Americans express interest in fully-automated restaurant concepts, technology won’t be replacing human hospitality anytime soon.
Striking this balance, many consumers see the value of technology in foodservice when using loyalty programs. For example, 36% have used a loyalty program through a restaurant app and would use it again. What’s more, one quarter (23%) of consumers who have not participated in a loyalty program through a restaurant app are interested in trying it. For the most part, consumers are drawn to loyalty programs for the rewards, including ongoing discounts (50%), earning dollars toward future purchases (42%) and access to special deals (i.e., birthday treat) (35%).
“The majority of Americans are not interested in fully-automated restaurant concepts mainly because they prefer human interaction,” says Jill Failla, foodservice analyst. “However, on-premise restaurant technology offers operators multifaceted solutions to growing labor challenges and consumer demand for speedy service. As such, striking the perfect balance between consumer-friendly technology and human hospitality is key to the success of the industry moving forward. Our research shows that mobile app-based loyalty programs are one of the top forms of digital engagement on premise at restaurants and are integral to the future of personalization within the industry. They offer a compelling way for consumers to opt into targeted messaging, geo-locating and other operator benefits, and all of their loyalty data is immensely valuable to the operator.”
Kiosks—fast, convenient and judgment-free
Speed and convenience are key consumer benefits and motivators for using on-premise technology due to increasingly time-pressed lifestyles. Nearly three in five consumers who use kiosks and would like to use them again do so to bypass the line (57%) or for a faster ordering process (55%). Over two-fifths of kiosk consumers say they do so because of the ability to customize their order (43%) and it offers better accuracy than ordering with a person (38%). Hoping to avoid any critical eyes, nearly one-fifth (17%) say they can order more food at a kiosk without feeling judged.
And, while most consumers aren’t specifically looking to avoid human interaction when they use a kiosk, three in 10 (29%) say they are, including 34% of 18- to 34-year-olds.
Among the kiosk-averse, two in five (40%) consumers who are not interested in using kiosks or would not use them again say they avoid using kiosks because they prefer human interaction. One-quarter (26%) of these consumers say they avoid kiosks because they prefer paying with cash. And, 15% cite sanitation concerns as the reason they avoid kiosks at restaurants.
“A notable two in five consumers who avoid using kiosks do so because they prefer human interaction. This means that while kiosks offer a clear benefit to operators and consumers alike, most operators will not simply be able to evade traditional human-centric hospitality. This is especially true of the consumers who avoid kiosks because of unfamiliarity. A human-based education component is necessary for successful kiosk adoption rates. Aside from kiosk tech, we see huge growth opportunities for operators leveraging pre-ordering options and tableside payments for sit-down meals, given how attractive these options are to younger consumers,” says Failla.
AI breaks out
While AI has been present in the restaurant industry for several years, most recognizably via kiosks, it is now growing rapidly across the United States with fast food chains seeing the greatest potential. This growth is driven by younger consumers in particular. Nearly one-third (32%) of GenZ consumers say they’d like digital ordering screens to suggest food add-ons/pairings, and three in 10 (30%) 18- to 24-year-olds want to see more personalized order suggestions based on their order history.
“There is ample room for the use of AI in restaurants to grow in the coming years. While operators are only just beginning to experiment with personalization via license plate and facial recognition technology, they will likely have the best response with geofencing enabled by mobile app loyalty program usage. Restaurants have begun using this technology to target specific customers and personalize the dining experience, presenting a huge opportunity for the future of personalization in the industry,” adds Failla.