Technology

AI Restaurant Applications: Everything You Need to Know About Artificial Intelligence

By Katherine Pendrill

Portrait of a small business owner working using laptop at a bar.

Artificial intelligence (AI) is changing the world of work as we know it in nearly every industry, including the restaurant sector. But AI restaurant applications aren’t the first innovation to transform the industry. From microwave ovens and drive-thrus in the 1940s to point of sale systems in the 1970s, restaurateurs have been leveraging technology for decades to help their businesses run smoother and faster. In short, this next wave of innovation is nothing to fear.

There’s actually a lot to be excited about when it comes to artificial intelligence in restaurants, especially considering that many restaurants are chronically understaffed. For one, AI food applications can take a lot of routine work off employees’ plates.

But before you jump into restaurant AI with both feet, it’s important to understand that the technology has its limitations. Remember the burger flipping robot, Flippy? Its tenure at CaliBurger didn’t work out. And AI-driven innovations like drone delivery are still in their early days. Despite the kinks to be ironed out, it’s still worth getting a grasp on how you can start leveraging AI in your restaurant so you can stay ahead of your competition.

In this guide to AI restaurant applications, we’ll cover:

  • What AI is and how it differs from machine learning
  • 7 AI restaurant applications for you to explore
  • 5 benefits of using AI in restaurants
  • The future of AI in the food industry

It’s time to get techy!

What is Artificial Intelligence (AI)?

When Stanford University professor John McCarthy coined the term “artificial intelligence” in 1955, he referred to it as “the science and engineering of making intelligent machines.” Today, AI technology is essentially computer software that facilitates complex activities traditionally performed by humans, like analysis and creation.

AI goes hand in hand with the concept of machine learning, which is just one application of AI. At a basic level, machine learning is a process that enables technological devices to become smarter – like how Netflix recommends TV shows it thinks you’ll enjoy!

It all sounds a little complicated, but you’ve likely encountered AI in everyday life. The iPhone assistant Siri is an example of AI in action. Even smartphone cameras use AI to enhance the quality of the images they produce. And of course, AI has made its way into restaurants, too.

Smiling man using a phone at home.

AI Restaurant Applications

Wondering how this innovative technology could work for you and your customers? Let’s walk through 7 examples of artificial intelligence in restaurants.

1. Voice Assisted Ordering

AI food applications like voice ordering, which is a type of chatbot, let your customers place orders using their voice in the way that’s most convenient for them – whether through an assistant like Alexa, an app on their tablet, or another device. Your staff don’t have to be involved in the interaction as AI takes care of everything for you. 

Here’s an example of how it works:

  1. A customer calls your restaurant and is connected to an interactive voice response system, which prompts them to speak and place their takeout or delivery order.
  2. The system captures and sends the order to your POS, which creates a bill for the order that the customer can pay online.
  3. The system sends the order to your kitchen where your chefs work their magic.
  4. The customer picks up the order or it gets delivered to them.

This is a great example of how restaurant AI and humans can work together to delight diners.

2. AI Phone Answering

This AI restaurant application is pretty straightforward – however, AI phone answering technology can do more than take calls for you. It can also make reservations, answer questions, and take messages.

For example, Wingstop made headlines recently when the fast casual chain decided to implement AI phone answering tech to take multiple phone orders at the same time, reducing hold times and dropped calls, as well as enabling employees to focus on other tasks.

“The bot will also be able to make recommendations based on what a person orders. And it can speak both English and Spanish,” reported Restaurant Business. “Customers can still ask to talk to a human if they want to.”

3. Self-Serve Technology

Self-serve technology is one of the most recognizable applications of AI in restaurants – think kiosks at fast food restaurants like McDonald’s where you place your order, then wait in line for it to be prepared. The tech is also wildly popular with customers.

“Over four-fifths (84%) of Generation Z and Millennials (82%) choose to visit a restaurant with self-serve kiosks over and above those restaurants without,” reported Catering Insight.

This tech has gotten even more innovative recently. Subway installed its first smart fridge, which is similar to a vending machine, at the University of California San Diego in September 2022.

“The fridges are stocked daily by the nearest brick-and-mortar Subway location and use ‘artificial intelligence and natural language processing’ to allow customers to speak to the machine and ask about what’s inside the fridge,” reported The Takeout.

4. AI Inventory Management Technology

Restaurant operations management is a complex area of business, especially if you got into the restaurant game because you love food – not administration. And inventory management is an especially dreaded task, so why not use restaurant AI to make it easier?

Software like TouchBistro Profit Management Powered by MarginEdge does exactly that. For instance, the solution can process handwritten adjustments to invoices and even use optical character recognition to automatically pull that information into your accounting software. This not only reduces the time that you need to spend on data entry, but it also drastically reduces the chance of errors.

5. Smart Staff Scheduling

Employee scheduling used to be a manual process, and a bit of a guessing game if we’re being honest. Now, you can use AI restaurant applications to track your staffing and sales data, so you can determine trends like your busiest times of the week (and less busy times). 

The technology helps you figure out how best to staff up (or down), so you can be sure you’ll have enough employees in the front and back of house to deliver a smooth service, but not too many that the staff out number the guests! And when you avoid overstaffing, you keep more money in your pocket.

6. Data Analysis and Reporting

AI in the food industry is all about working smarter. To do that, you need the right data. For instance, AI solutions like Distancematrix use algorithms to optimize food delivery times. The technology considers everything from the mode of transportation to traffic to the delivery driver’s speed to make delivery up to 25% faster.

In another example, Shake Shack used an AI algorithm called Giuseppe to decide which new plant-based items to add to its menu. 

“The AI broke down and analyzed animal-based dairy on the molecular level to find plant-based molecules that would best mimic the characteristics that make the food likable,” reported The Takeout. “The result: a non-dairy chocolate shake and a non-dairy chocolate frozen custard.”

Keep in mind that you don’t need to purchase high-end tools to harness the power of AI data at your restaurant. Even POS reports make use of AI tech to pull data on sales trends, staff insights, and more.

7. Automated Marketing

Email marketing is one of your strongest lines of communication to your customers, since email engagement tends to be much higher than engagement on social media. Email is also a marketing tactic you can easily automate using AI.

Software like TouchBistro Marketing can help you automate restaurant emails so you can send personalized communications to your customers at scale. For instance, you can set up an automated email to send to customers who haven’t visited your restaurant in the past 60 days. Make it a ‘we miss you!’ email and offer them 25% off their next bill. 

Here’s a bonus tip: you can even let AI write the first draft of your emails using a tool like the AI chatbot ChatGPT, which can generate text to help you create content based on questions you ask the chatbot. We recommend always editing the copy after it’s generated by the software to infuse your brand’s voice into it and check facts for accuracy, but this will give you a head start so you’re not staring at a blank screen wondering what to write!

Manager paying bills and wages on a laptop in a cafe.

Benefits of Using AI in Restaurants

While AI and machine learning in the restaurant industry are constantly evolving, one thing is certain: this technology can make your life easier. For that reason alone, it’s well worth looking into! Here are a few specific benefits of AI restaurant applications. 

Reduces Operating and Labor Costs

AI-powered restaurant automation can help you save a substantial amount of time on tasks from inventory management to marketing to data analysis and reporting. This, in turn, can cut your operating and labor costs.

However, using AI doesn’t mean you’ll need to lay off all your employees. Rather, it can automate tasks that you previously needed dedicated staff members to take care of, enabling them to focus on other responsibilities.

Minimizes Errors and Improves Order Accuracy

Humans bring many talents to the table, but the truth is that there are also areas where we could use some assistance! After all, human error occurs frequently in restaurants, especially when it comes to taking guests’ orders. 

Using AI to streamline the ordering process can undoubtedly improve your customer experience. And, according to customer engagement platform Emplifi, “61% of consumers will pay at least 5% more if they know they’ll get a good customer experience.”

Improves Speed of Service

Another way to decrease costs and increase guest satisfaction is by improving the speed of service at your restaurant, which AI can help you do. 

How, exactly? AI can carry out a large number of repetitive tasks in a fraction of the time it would take your staff to perform the same duties manually. The technology has the potential to boost labor productivity by as much as 40%, according to professional services firm Accenture.

Promotes Consistency

Consistency is critical in the restaurant business, especially if you operate a chain or franchise. AI can drive consistency across your operations because, unlike humans, the technology can carry out the same tasks in exactly the same way each time. 

Using AI to answer phone calls or manage inventory are just two examples of how this tech can help promote consistency in your restaurant.

Personalizes the Guest Experience

Today’s guests want personalized experiences. AI can enable you to deliver a more bespoke diner experience that makes your customers feel like VIPs every time they step into your restaurant. For example, technology can notify your servers when loyalty program members make a reservation, so you can offer top-tier members a free appetizer upon their arrival. AI can also help you wow your customers when they receive your marketing emails with communications like birthday discounts.

And personalization pays off in a big way. “Companies that excel at personalization generate 40% more revenue from those activities than average players,” according to consulting firm McKinsey & Company.

The Future of AI in the Food Industry

AI and machine learning in the restaurant industry aren’t going anywhere. This means there’s no need to rush into experimenting with this technology, even if your competitors have already started. The wiser move is to take your time to figure out how you can best use AI in a way that fits your restaurant’s unique circumstances – because every business is different.

Keep in mind that AI should never replace the human element of great restaurant service. By and large, people want to connect with other people, especially when they’re dining out. Your team is the heartbeat of your restaurant, and it should stay that way.

In addition, there are some data privacy concerns to consider when it comes to using restaurant AI, so be sure to do your research to understand how you can safely use the technology. And finally, the cost of some AI restaurant applications may be high upfront, so try to estimate what kind of return on investment you’ll get from AI software before you make a purchase.

We can’t wait to see what kind of progress you can create in your restaurant business by combining your human talent with AI technology!

Photo of Katherine Pendrill
by Katherine Pendrill

Katherine is the Content Marketing Manager at TouchBistro, where she writes about trending topics in food and restaurants. The opposite of a picky eater, she’ll try (almost) anything at least once. Whether it’s chowing down on camel burgers in Morocco or snacking on octopus dumplings in Japan, she’s always up for new food experiences.

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