Tech crunch: Is technology in hospitality here to stay?

Eleanor Dallaway

Eleanor Dallaway

19 November 2020

Covid-19 has accelerated the use of technology in the on-trade. But when life returns to normal, will consumers want to go back to a more traditional approach, asks Eleanor Dallaway

It would be true to say the hospitality industry hasn’t always been the earliest adopter of new technologies, as it arguably contradicts its very ethos, but the pandemic has catapulted it firmly into a technological revolution.

Technology is now being used to reassure customers about safety measures, cleaning schedules, collecting data and eliminating touchpoints between customers and staff. ‘Right now, technology is a necessity,’ reflects Josh Burke, CEO and co-founder of Glug, an ordering and payment app.

It needs to enable the customer to enjoy the on-trade as easily as they did pre-Covid

Mark Roberts

While technology may save hospitality, how much appetite will there be from businesses and customers to order and pay via an app and sacrifice the experience of great personal service, if and when all this comes to an end? The industry will have to make a choice on the direction it will take.

One way leads to a new tech-led sector and the other to the traditional hospitality experience. Unless, that is, we can find a third way.

The journey to here

Most of the tech that has been adopted by the on-trade since reopening was a work-in-progress long before the virus. Safety in a pandemic was not the motivation for the developers, but it has since become the biggest virtue. Importantly though, it’s not the only one.

Glug’s Burke started work on the app two years ago, as a solution to the bar crowding that was a pain point at Bongo’s Bingo, where he is also CEO and co-founder.

Glug
Glug

‘No-one wants to leave their seats apart from during the breaks in the entertainment, so the bars get hammered during break time – bar staff struggle to cope with demand, don’t have a chance to upsell and the queuing interferes with the customer’s night out.’ The Glug app was developed to increase spend per head and give a better customer experience, but when lockdown arrived, it was given an injection of urgency. ‘We got investment and it was all systems go,’ says Burke, acknowledging that nice-to-have had become need-to-have thanks to Covid-19.

‘The point of technology,’ explains Mark Roberts, director of sales at Lanchester Wines, is ‘to make things easier, it needs to deliver efficiency and it needs to enable the customer to enjoy the on-trade as easily as they did pre-Covid-19.’

James O’Sullivan, CEO of hospitality management firm Kobas agrees. ‘It can take the friction out of hospitality – not being able to catch the waiter’s eye, time spent queuing, remembering everyone’s order, splitting the bill,’ he lists. ‘You don’t have to lose the personal interaction; you just need to use it for the important parts and let tech take care of the rest.’

It’s about freeing up human time to give the very best experience to the customer

This is backed up by research from consumer insight firm KAM Media, which has just completed a whitepaper, in association with OrderPay, on technology-enhanced customer service. The research surveyed more than 500 people and the responses leave no doubt as to customers’ expectation of a tech-enhanced, tech-driven, or tech-enabled future for hospitality.

Ninety percent of respondents said that contactless ordering and payment should be in place in venues post-Covid-19. We know that the desire for technology-enhanced hospitality experiences isn’t new, with the younger generation starting to jump on the bandwagon some time ago. But 90%? That’s the result of a pandemic. ‘During lockdown, the gap between the older and younger generations’ use of technology and ability has closed,’ says Katy Moses, founder and MD of KAM Media.

‘Technology is only useful in hospitality if it enhances customer experience. People often get up in arms about robots taking jobs, but actually, it’s about freeing up human time to give the very best experience to the customer.’

Tipping point

Of course, it’s not all shiny futuristic perfection. Speed of service, complications with offering discounts and promotions, technical glitches, cost to implement, inability to run tabs and reduction in tips were all touted as downsides.

This last point is a key one. Tipping is such an important part of the compensation for those that work in hospitality that alienating it through tech will, quite rightly, cause backlash. Some apps (including Glug) have a tipping function with a pop-up notification asking the customer if they want to tip once drinks have been delivered, much like the style of Uber, but this is not universal.

Iain McPherson is the co-owner of Panda & Sons, Hoot The Redeemer and Nauticus. He’s looking for an ordering and payment app to implement in his Edinburgh bars but has been ‘hesitant’ to invest ‘if it eradicates my staff ’s’ opportunity to make tips’.

One solution to the tipping question is Tipjar, developed by BrewDog retail director James Brown and Rosa’s Thai co-founder Alex Moore. Customers can scan a waiter’s QR code to send a card payment tip directly to that worker.

They’ve just doubled their funding, testament to how well-received it has been by both customers and hospitality workers alike.

App opportunity

For McPherson, introducing technology into his venues is definitely a case of necessity not desire. ‘I don’t want people to resent going out and ordering through a phone is like ordering a takeaway – it ruins the experience.’ Customer enjoyment has been at the heart of his decision, thus far, to put in non-tech measures. ‘We do all table service, we’ve invested in protection for the bar so people can sit at it, we laminate our menus and the staff wear masks.’

Another issue is customers having to download a different app in each venue. ‘Some venues are working on, or have, their own apps. But customers don’t want 20 different apps for 20 different venues. They end up deleting a lot of them after their visit,’ says Burke. In fact, as presented in the KAM report, 81% of respondents said they would like just one app to use across all chains and venues, with 52% expressing frustration with having multiple hospitality apps on their phones. 

Developing an app is a costly investment for a venue, ‘often more than £10,000 and they’re not recouping that investment,’ says Burke. Aggregator apps can offer a better user experience, he says, as punters can access their favourites and don’t have the frustration of having to download multiple different ones.

Will Broome is the founder and CEO of Ubarmarket. The plan for Ubarmarket to become ‘the world’s best pub, bar, restaurant app’ was chugging along until Covid-19 hit and Broome put his foot on the accelerator. ‘We went to town on it because we didn’t want to miss the boat.’ A week away from launching (at the time of print) it allows customers to view menus, customise orders, pay and even verify their age through the built-in age verification software. Like Glug, the app can be used in various venues.

We are still the hospitality industry and we still want to serve and be served

Katy Moses

‘It’s a visual and simple user experience where you can do everything. The simplicity of the user experience is absolutely crucial as there is so much at stake.’ Broome explains that the app is the ‘person’ that greets you, a communications tool, a consumer-facing menu, and a marketing tool all in one.

Data drive

That help with clever marketing is something apps can clearly offer operators. O’Sullivan’s Kobas team created their own web app during lockdown that will work as a single platform and reporting tool for its customers. ‘The progressive web app collates such a wide spectrum of data that venues can analyse and predict behaviours.

‘As the weather worsens, the next few months are going to be very difficult for hospitality. The upshot of that is that businesses need to know how to entice more customers into their venues. We take all the information we know about a customer – how much they buy, what they drink, when they visit, what reservations they have, etc – and the data analysis helps operators make good decisions about marketing – both generic and targeted.’

Burke adds: ‘For venues, understanding who their customers are is so important. At the moment, they are blind, but this technology gives the information that venues need to know what to stock.’

Swifty, a new app by brewer Heineken, was developed before Covid-19 rather than being a response to it, says Emma Newberry, B2B and quality marketing manager at the company. The aim was to address some of the pain points that both customers and outlets share – ‘for every customer that is wondering how to find the best pub or bar near the office, there is an outlet trying to figure out how to increase footfall,’ the company states. ‘Equally, where customers are frustrated that their loyal custom is not rewarded, operators are wondering how they can incentivise return visits.’

Nevertheless, the app launched in May 2020 with a new primary objective, thanks to Covid-19. ‘The original priority was never order and pay but that’s what it became,’ says Newberry.

She is keen to point out that customers using payment and loyalty apps spend on average 30% more than those who don’t, as well as Swifty’s ability to offer loyalty rewards, integrate with your EPOS, collate customer feedback and allow you to deliver loyalty schemes, promotions and rewards.

Of course, data protection is a concern. Not all customers are comfortable with behavioural data being shared with venues they visit, even if there is a trade-off which gives them a more personalised service. There’s also the little thing called GDPR. ‘Customers have the right to know their data is being used sensitively and within the law,’ says Moses. ‘They’ll want to know what the trade-off is and what they’re getting in return.

Hospitality needs to learn how to give back and we’re not fantastic at doing that yet.’

Futureproof

So, what does the future look like for the on-trade? Post-Covid-19, will new tech toys be cast asunder as part of a regression back to far more traditional hospitality service?

According to O’Sullivan, it depends on what type of venue it is. ‘Mass market brands and chains are much more accepting of tech in hospitality. With a higher level of venue, you expect a higher experience and even the best apps in the world can’t deliver that same level of experience.’ Though he argues that there is a place for technology. ‘There are some elements where technology can actually do better. Take the pain point of paying, for example.’

Sixty-seven percent of KAM whitepaper respondents find waiting – and the process of paying – for the bill frustrating. ‘The payment at the end is the final part of the hospitality experience, leaving a lasting impression, so it’s important to get it right,’ says Moses. ‘It’s not about being flash, it’s about putting things into your venue that will make customers happy, order more, spend more, come back and rave about you online.’

Ubarmarket’s Broome believes that while technology is becoming a more ingrained way of life that isn’t going away, ‘for small independent venues, technology can be overkill’. Broome has visions of a future where the on-trade is a hybrid of tech and old-fashioned hosting. ‘The whole world is so in tune with hygiene now and that will stick post- Covid-19.

We’ve seen a cultural shift to wanting more space and technology in hospitality is here to stay for all the right reasons. There will be a regression as far as the world will allow, but people will see the benefits of tech and that will mean an ingrained change in attitude.’

Broome advises using technology to do the stuff that frees up your people to do the jobs more valuable to enhancing customer experience.

‘We are still the hospitality industry and we still want to serve and be served,’ says Moses. The future, she insists, is giving customers a choice.

Even when tech prevails, ‘we need to make sure we are still catering for the people who don’t want to be tech-service led.’

The best thing the on-trade can do is to give customers a choice. Offer a tech-led experience, but also offer a more traditional hospitality experience for those uncomfortable with apps. A third way, if you please.


Main ilustration: Carol del Angel

This article was first published in the 2020 autumn issue of Imbibe.

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