Andrew Charles, Restaurants Analyst shares highlights from Cowen’s 2nd Annual Digital Dining Summit: Revolution in Restaurant Innovation, which took place on May 27, 2021. The highlights cover the Cowen Research outlook for restaurant sales. It also contains discussion around investments in technology such as AI, robotics and drones, and how rewards programs personalize consumer offerings.
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THE COWEN INSIGHT
The Cowen 2nd Annual Digital Dining Summit provided a 360° view on restaurant technology offerings designed to help the industry’s top and bottom lines. Presentations and fireside chats spotlighted restaurant technology’s ability to drive toplines (facilitated by the stickiness of digital ordering), reduce labor reliance, and provide frictionless omni-channel payment options. We believe the suite of restaurant technology offerings positions multiunit concepts to gain market share from independents.
3 Key Themes From the Digital Dining Summit
Stickiness of Digital Sales
Several references echoed throughout the summit suggests the industry sales environment remains robust through May. Dining room capacity restrictions have eased. That has led to a rebound in dine-in/front of house sales. Meanwhile, the convenience presented by digital ordering has appeared to establish a habit. Digital orders for carry-out & delivery have largely persisted. In addition, the Biden administration has been forthcoming around implementing programs that provide consumer stimulus.
On the payments side, the wave of digitization induced by COVID-19 is poised to continue. This includes both payments and POS. Restaurants have had to transform their digital offerings overnight, paving the way for accelerated POS disruption – a trend that began even before the pandemic. Demand for cloud-based POS systems is eschewing that of traditional legacy systems, though market penetration in the US is likely still only ~30%
Labor Shortage + Digital Strength = Less Labor Reliant Future
The restaurant industry will be forever rooted in hospitality. However, the current shorted underscores opportunities to reduce reliance on labor. This includes utilizing QR codes for ordering, the expectation for more widespread autonomous vehicle delivery, and the emergence of A.I. voice ordering + robotic kitchen equipment available to lease to restaurants. This has positive ramifications for store development if restaurants structurally require less labor hours.
Alternative Payment Method (APM) Adoption Is of Greater Importance Post COVID-19
The acceptance of alternative payment methods including digital wallets, cryptocurrencies, or Buy-Now-Pay-Later are increasingly important in the post-COVID-19 induced shift to digital. Increasing sales conversion and reducing friction for the consumer is key in an online sales environment. Panelists reiterated the importance of offering payment solutions that are gaining share with consumers. They also noted that the recent cryptocurrency tailwind is nothing to ignore and should be included in go forward road maps.
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