Microsoft’s Foodservice Innovation OutlookQ&A: Tom Litchford, industry solutions director for Microsoft’s U.S. Retail and Hospitality Group, discusses key trends in the restaurant industry and the importance of empowering people with innovative technologies proven to strengthen customer service and drive operational efficiency.
With economic factors such as the sub-prime mortgage crisis, rising gas costs and inflating food prices, all putting pressures on disposable spending, the race for a bigger slice of the consumer spending pie has become more challenging than ever. Nearly 1 million U.S. restaurant and foodservice locations are facing fiercer competition each day from both inside and outside of their industry. In addition to staying on top of consumers escalating expectations for service, quality and trendy menus, foodservice operators must also grapple with a wide range of issues from food safety and wellness to payment card industry compliance and government regulations.
Despite all of these factors — and studies showing that 60 percent of new restaurants close within three years of opening1 — it is possible to survive and thrive in this dynamic industry. Indeed, the National Restaurant Association forecasted that 2007 would represent the restaurant industry’s 16th consecutive year of real growth, with sales expected to reach a record US$537 billion2. Industry experts believe that the restaurants best positioned to harness that growth will be the ones that empower their people with the latest technologies proven to elevate the guest experience, while increasing productivity and profits.
Tom Litchford, Industry Solutions Director, U.S. Retail and Hospitality Group, Microsoft
PressPass interviewed Tom Litchford, industry solutions director for Microsoft’s U.S. Retail and Hospitality Group, for Microsoft’s view on the foodservice industry and the role that innovation can play in driving profitable growth. Litchford leads Microsoft’s sales and services efforts for the foodservice segment, with the goal of helping to solve customers’ business problems through industry-relevant solutions and technology.
PressPass:How have consumer demands and industry trends raised the stakes for restaurants and foodservice operators?
Litchford: The concept that the consumer is king is as strong as ever in the restaurant industry. With such wildly popular television shows on the Food Network as “Iron Chef†and "Emeril Live,†consumers’ awareness in diverse ingredients and better quality, fresher-tasting foods is expanding. Restaurants are scrambling to meet demand for healthier and trendier options including locally grown and organic produce. Today’s digital consumers are also more informed and want to be entertained, expecting restaurants to keep pace.
As restaurants compete amongst themselves for consumer “stomach share,†they also must face heightened competition from outside their industry. Grocers are moving beyond the deli counter in their bids for the quick-service market, increasingly stocking a new wave of take-away offerings that enable consumers to quickly and conveniently create their own meals at home by combining pre-packaged and pre-cooked components.
On top of mounting competition, the restaurant industry is addressing complexities related to payment, food safety and brand protection. The Payment Card Industry Data Security (PCI DSS) compliance rules and Hazard Analysis Critical Control Points (HACCP) are just two initiatives with which the industry must contend. And if all this isn’t enough, expectations for environmental sustainability are also intensifying operational pressures.
With all of these demands, foodservice operators must adopt business processes and technology solutions that seamlessly deliver back-office performance while empowering the people—employees, suppliers, consultants, partners, and of course, customers—who enable them to succeed.
PressPass:How can restaurants and foodservice operators utilize technology innovations to empower their customers?
Litchford: As we predicted four years ago, mobile devices are changing the way that restaurants operate and serve today’s digital consumers. As proof, the 2007 Restaurant Industry Forecast by the National Restaurant Association showed that “46 percent of Americans say they are likely to use customer-activated ordering and payment terminals if available in their favorite table service restaurant. Younger consumers are more likely to do so, as 71 percent of 18- to 24-year-olds, and 64 percent of 25- to 34-year-olds say they would. About half of all adults – and two-thirds of those aged 18 to 34 – say they would use a self-serve order and payment terminal at a quick-service restaurant if it was available.â€(3)
With these findings, it is no wonder that we are seeing an emergence of disruptive technologies that enable restaurants to address their guests’ expectations for using technology while also driving sales. Innovations that expedite table requests, support pre-ordering meals and deliver extended nutritional information are available today on Microsoft software and are accessible to consumers via their Windows Mobile device, Tablet PCs, the Web or a kiosk.
Another emerging opportunity that restaurants are starting to adopt to better connect with consumers is mobile marketing. Restaurants can even extend at home services for their customers by enabling them, for example, to place a delivery order from their gaming console or through a PC-based video game.
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