Nearly three in 10 Americans say technology is ruining the hospitality industry

• Only 17% of Americans express interest in fully-automated restaurant concepts.
• Speed and convenience are key consumer motivators for using on-premise technology.
• 32% of GenZ consumers want digital ordering screens to suggest food add-ons/pairings.

Technology plays a prominent role in nearly every aspect of US 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 as new research from Mintel reveals that 28% of US consumers agree that technology is ruining hospitality.

However, it may be the fear of the unknown that’s influencing these perceptions as a large minority of Americans have not only never used certain types of technology when dining out, but they are 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 (ie Apple Pay, Samsung Pay).

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. However, as discussed in Mintel’s 2019 US Foodservice Trend ‘Tech in Balance’, as technology drives the changing face of the foodservice industry, operators are finding the right mix of operational efficiency, the desire for human interaction and excellent service.

Striking this balance, many consumers see the value of technology in foodservice when using loyalty programs: 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 towards future purchases (42%), and access to special deals (eg birthday treat) (35%).

Jill Failla, Foodservice Analyst at Mintel, said:

“The majority of Americans are not interested in fully-automated restaurant concepts mainly because they prefer human interaction. 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 18-34-year-olds.

Among the kiosk-averse, a notable 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. Despite the current buzz around cashless payments, one quarter (26%) of these consumers say they avoid kiosks because they prefer paying with cash. And a mere 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,” continued Failla.

AI breaks out
Finally, while AI has been present in the restaurant industry for several years, most recognizably via kiosks, it is now growing rapidly across the US 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%) 18-24-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,” concluded Failla.