“Alexa, Order Pizza!” How Voice Ordering Will Impact Restaurants
According to a presentation given by Mastercard at the 2019 National Restaurant Association Show, while 74.2 million Americans use smart speakers every month and 62% of speaker owners have bought items through voice commerce, only 7.9 percent of people use smart speakers for food and beverage shopping.
However, the numbers suggest consumers might be ready to start, and voice shopping via at-home smart speakers is projected to reach $40 million in revenue by 2022. In 2020, we’ll see consumers leveraging this technology at a growing rate. In advance of this increase in adoption, restaurants will need to ensure they will be compatible with connected consumer devices. In order to keep up with the likes of Dunkin’, Denny’s and Domino’s, restaurants of all sizes need to optimize their tech stacks and diversify their strategies.
As in most other industries, restaurant technology must evolve as consumer preferences change. We saw this last with the growing affinity for mobile payments, which currently account for over $93 billion in transactions in the US, a number that’s projected to double by 2023. Our own research found that restaurants doubled down on their mobile payments strategies in 2018, and 31 percent of restaurants now offer mobile payment options.
As voice ordering gains ground as the next big idea in restaurant technology, industry players must consider investments and partnerships needed to integrate virtual voice-ordering assistants into their ordering apps and optimize menus for digital-first experiences. One great example is McDonald’s purchase of Dynamic Yield earlier this year for $300 million. The goal was to tap Dynamic Yield’s technology in its drive-thru menu displays, which enables the chain to “show food based on time of day, weather, restaurant traffic, and menu items,” and has since seen a profound impact on sales and customer count. As McDonald’s continues to evolve their technology to better meet guests needs, they acquired voice ordering technology company Apprente last month.
It’s probable that we’ll see many restaurant owners invest in tech partners and close deals like this in 2020 in order to get ahead of demand for voice ordering.
The Muscle is In Your Mobile UX
It’s no secret that today’s consumer base is mobile-first, especially when it comes to dining. From 2015 to 2018, the percentage of guests who ordered food from smartphones or mobile apps more than tripled—from 11 to 39 percent. By 2020, mobile orders will make up nearly 11% of all quick-service restaurant sales.
In serving this mobile-first consumer base, restaurants will need to make sure their mobile apps are optimized before implementing virtual voice-ordering tech. Voice ordering is likely to gather more users through drive-through ordering and phone reservations, which already has a captive audience in the U.S. The idea of searching for and ordering food through Google Home or Alexa is exciting, but to implement these changes, restaurants will first have to develop and build out alternate channels to accommodate the expensive and more advanced technology. A good first step towards enabling voice is for restaurants to invest in their own digital ordering, whether through online ordering, kiosk, or mobile apps.
A Picture is Worth a Thousand Menu Descriptions
Once the technology reaches its full potential, voice ordering will bring convenience to a whole new level: diners will have the ability to see (and hear) menu items through Google Home or Alexa. As the voice ordering technology advances, independent restaurants have an opportunity to increase their revenue through the addition of text and pictures. Photos of food naturally entice a consumer more than words alone, so the addition of pictures on a Google Home or an Alexa is likely to hook a first-time user. However, adoption of voice assistants with images like the Echo Show or Facebook Portal has been low compared to voice-only assistants. While that shift in hardware in-home happens, restaurants can get ahead by investing in better photos for their own mobile and web ordering.
Ultimately, by 2025, if a consumer asks their voice assistant what’s on a restaurant’s menu, and it can’t deliver, restaurants could risk customer churn. However, as voice ordering technology advances, restaurants will need to be strategic about partnering with the right platforms and optimizing their mobile experiences. Ideally, this will ultimately increase their revenue through the addition of text and pictures, especially as technology evolves to become far more conversational and predictive about consumer habits.
“Alexa, get me the usual — actually, wait, how about surprise me with something new that you already know I’m going to like from Starbucks.”
Steve Fredette is the co-founder of Toast.