63% of Restaurant Operators Say Technology is the Key to Profitability

publication date: Jun 17, 2024
author/source: SpotOn



"63% of operators surveyed reported an increase in profitability due to technology, noting faster customer service, better loyalty engagement, increased check averages, and decreased labor costs as major contributors to their bottom line."

SpotOn, a top-rated software and payments partner for restaurants and small businesses, revealed the details of its Restaurant Operator Intelligence Report, which further solidifies the connection between technology and restaurant profitability. Known for operating on notoriously thin profit margins, the restaurant industry now faces a triple threat of rising costs, increasing regulations, and reduced consumer spending, requiring restaurants to leverage effective industry-specific technology. SpotOn found that 61% of operators say online ordering platforms provide them a way to drive greater customer loyalty and repeat visits.

In the survey of more than 300 restaurant owners and operators, 63% of respondents said their profitability increased in 2023. When asked about the benefits of technology used in their restaurants, many directly correlated new efficiencies and higher profits with the use of technology. Operators noted faster customer service, better loyalty engagement, increased check averages, and decreased labor costs as major contributors to their bottom line.

"In today's tight economy, technology can be the key difference between a restaurant barely making ends meet and thriving," said Kevin Bryla, Chief Marketing Officer at SpotOn. "Restaurants that utilize an integrated tech stack, which includes handheld devices, online ordering, order kiosks, QR codes, and more, will be turning over more tables, pushing through more orders, and making life easier for staff. Restaurant technology that is designed to enhance the experience for both staff and guests has a positive bottom-line impact -- and the results of this survey prove it."

Technology That's Moving The Needle

Over the past 12–18 months, restaurants have seen significant fluctuations in cost and labor. With reduced consumer spending, operators must focus on repackaging menus, supplementing labor, and streamlining operations to ensure sustainable growth. SpotOn is committed to helping operators find innovative ways to maintain profitability, whether by reducing labor costs or increasing average order value.

According to the survey, a majority (51%) of independent restaurants reported increased profit margins, with small restaurant chains (79%) seeing the greatest increase in profit margins during the survey period. Survey respondents pointed to the benefits of technology in several key areas, including faster service, greater customer loyalty, higher check averages, and overall higher profits:

  • Online Ordering: 61% of operators reported that having an online ordering platform led to greater customer loyalty and repeat visits, and 55% said it also contributed to higher check averages. It was also the top-ranked tech tool for increasing profits among respondents.
  • Handheld devices: 58% of operators said that handheld devices provided faster service, and 48% reported that they led to higher average check sizes.
  • QR codes: 61% of operators stated that QR codes provided faster customer service, which in turn led to more tables turned, more guests served, and higher profitability
  • Order Kiosks: 70% of operators reported that order kiosks provided faster customer service, which resulted in more customer transactions and higher customer check averages. 57% also said that the technology helped lower labor costs.

Employee Retention

Outside of the operational benefits of technology, respondents indicated that digital systems play an integral role in employee retention, which is a priority considering that:

  • 56% of operators said that employee engagement is moderate or low in their restaurants
  • 20% of operators state that staff turnover is one of the biggest challenges in the first half of 2024

Respondents indicated that increasing employee earning potential is the key to retention. With increased check sizes and faster table turnover, servers equipped with tech like handheld point-of-sale devices can net larger tips and serve more customers, increasing their take-home pay while making their shifts run smoother. In research among SpotOn clients, restaurant operators found a 4.2% average increase in tables served when using SpotOn handhelds.

Technology Adoption is increasing

The use of technology in the restaurant industry is becoming more widespread, and a majority of operators surveyed expect to increase their investment in technology in 2024. Specific priority areas for investment include online ordering capabilities on owned websites and apps. Only 22% of respondents report that they currently use a point-of-sale system that offers delivery integration, but one in four say they plan on investing in owned delivery technology in the next year. These findings point to a shift away from third-party platforms and toward integration with existing systems.

With most third-party delivery apps taking 30% or more in commissions on online orders as well as critical guest data, technology that allows restaurants to take control of online orders can be crucial to increasing profits. SpotOn's zero-commission online ordering solution, SpotOn Order, lets guests place online orders directly from the restaurant's website or Google and works seamlessly with SpotOn's point-of-sale and loyalty program to keep guests coming back each time.