AWS for Industries

4 surprising restaurant industry trends

In the previous blog post 7 defunct restaurant brands we can learn from, I reviewed how some historic restaurant brands failed to adjust to changing consumer preferences and market dynamics. This post examines the restaurant industry trends that we are watching for in 2020 and how AWS prepares restaurants for the impact.

Trend 1: The effect of millennial aging

The generation that wreaked havoc on your restaurant brand years ago is back at it. They have more spending power than ever before, which means their influence on the industry is growing. Look out for unique, individual trends and preferences. Millennials are looking for fewer single-use plastics, such as reusable bowls and cups. In an effort to save money and take control of their health, “meal prep Sundays” are gaining traction. What will this do to your lunch rush?

Also, from the generation that brought you “promposals” and elaborate choreographed wedding first dances comes the godparent proposal party. Have you been asked to cater one already?

Trend 2: Personalized marketing 2.0

Consumers and brands are exchanging data that allows restaurants to tailor recommendations based on allergies, dietary restrictions, or even desired micro-nutrients based on DNA testing.

Moving beyond famous social media influencers, restaurants will also have success using micro-influencer based marketing. Micro-influencers are individuals that have between 1,000–1,000,000 followers or audience members and are considered experts in their respective sub-niche.

Speaking of social media and FOMO (fear of missing out), ephemeral content will be significant this year.

Ephemeral content is something that is short-lived, lasting for up to 24 hours before disappearing forever. Can’t you imagine the buzz of a national sandwich chain offering a premium lobster roll for just one day in the middle of summer?

Additionally, the advent of cloud-based social listening tools allows restaurant brands to use user-generated content in their personalized marketing. What could be more enticing to a customer than seeing images of similar individuals in their demographic when they search for your brand? But to achieve all this, restaurants need a single view of their customers and way to track their preferences – and to optimize and measure success.

Trend 3: Dietary accommodations, exploration, and substitutions

We are talking about restaurants, so I am happy to share that our third trend is food-related. Popular diets will continue to flourish. Who hasn’t had a friend or coworker talk their ear off about a Keto, Paleo, or Whole30 diet? Meat alternatives continue to gain market share and we will see exploration beyond lab-grown and plant-based solutions with insect variants and pea protein.

Speaking of exploration, two additional categories continue to expand: flours and milks. Super flours offer consumers extra protein or fiber, while alternatives to dairy milk, such as almond, soy, or oat, are being introduced by national chains.

The superfood trend is once again driven by consumers’ access to information and a desire to take back control of their own health situation.

This push impacts the restaurant industry in two ways:

1.        Sober living, low alcohol cocktails, and mocktails: Consumers want all the joy of a crazy night out with friends without any of the social or health after effects. As such, they turn more toward mocktails, spirit-free cocktails, spiked seltzers, collagen-spiked drinks, and even non-alcoholic happy hours. The largest impact may be to the wine industry where piquette, a second or third pressing and fermentation of grapes used traditionally in wine-making, which tastes more like hard kombucha is becoming popular.

2.         Cannabidiol, or CBD: While this trendy ingredient is being used to treat everything from insomnia, anxiety, and even muscle aches in pets, we are still waiting on clearance from the FDA to deem CBD as a “generally safe” product before you will witness its explosion in restaurants.

Trend 4: Acts of God or government

While we wait for the FDA to decide the fate of CBD, restaurants are affected by the government trade disputes as impacts on wine, pork, stainless steel, and others product vital to the industry are likely to continue. Extreme weather events put stress on the supply of food flowing into restaurants, causing brands to seek product substitutions or to stop selling products all together. In response, we see consumer interest rise around the concept of regenerative agriculture.

While still in its infancy, regenerative agriculture is generally accepted as farming and grazing practices that restore soil, improve biodiversity, and reduce or eliminate carbon emissions.

Using data to feed innovation

The previous blog reported that restaurants must focus on the two core areas: enhancing guest experiences (top line) and increasing operational efficiency (bottom line.) It is also important to collect and analyze vast amounts of data and be able to adjust the business as needed. This helps a brand recognize and plan for trends – even before they are talked about by the rest of the industry (or industry blog posts like this one).

This means that big data is at the root of the problem. Yet, most organizations struggle with where to begin. The three key inhibitors to making big data actionable and useful have been found to be: linking disparate datasets together, the frequency at which data is collected, and the lack of specific customer data.

Restaurant brands are rich with data but poor in insights. Data from point-of-sale (POS), labor management, inventory management, operations management, delivery management, customer relationship management, and other technology-based solutions are usually stored in closed or point solutions, making a data lake a foundational step for many to start unleashing the value of their data.

The Data Lake on AWS solution empowers restaurants to solve this challenge in four distinct ways:

1.     Flexibility to ingest any type of data. Building a full data picture requires ingestion of everything: clickstream data, POS data, social/mobile, streaming data from in-store IoT sensors, and more.

2.     One home for all data, no silos. Operators need a single place to access all available customer and operational data to build insights and offers.

3.     The right analytical tools for every job to support any kind of analysis. Tackle basic SQL queries of your data warehouse today to machine learning and artificial intelligence for predictive customer insights tomorrow.

4.     Analytical insights to feed seamlessly into everything from an internal business intelligence tool to a customer-facing product recommendation app.

A few restaurant brands have harnessed the power of data in effectively capitalizing on trends; at Delivery Hero, the focus was on building a single source of truth for all company data to make it actionable.

Beyond marketing, the trends you realize may require you to adjust your operations or create new applications. AWS allows restaurant brands to quickly develop and roll out new applications, plus experiment and innovate more quickly and frequently.

Since resources can always be de-provisioned without risk, restaurant brands can attempt to capitalize on, respond to, and even anticipate emerging trends and quickly replicate the success around the globe when they effectively capitalize on a trend. All of this is possible due to AWS’s core building principles of being cost effective (pay-as-you-go) solutions that are flexible, high performing, and scalable with built-in security and reliability.

Learn more about what AWS is enabling Travel and Hospitality companies

Steven Elinson

Steven Elinson

Steven M. Elinson leads AWS Worldwide Business Development, Restaurants, the global industry practice for Amazon Web Services (AWS), with a charter to support customers as they accelerate cloud adoption. Today’s restaurant must deliver a personalized and seamlessly connected guest experience while being operationally efficient with optimized assets, high utilization, predictive analytics and quality, health and safety standard compliance. As a trusted advisor, Steven utilizes his broad knowledge and 30 years of experience to drive these guest experiences (top-line) and to increase operational efficiency (bottom- line.) Before joining AWS, Steven held various leadership roles in restaurant and restaurant technology businesses. His experience ranges from operations, training, supply chain, technology and new concept creation having created and sold a restaurant concept. He holds a Bachelor of Science in Hotel, Restaurant and Tourism Management from Purdue University, and a Master of Business Administration from Florida International University.