AlixPartners: Restaurants should embrace technology

08 January 2015 Consultancy.uk

According to a recently released report from AlixPartners, if used wisely, technological innovation can help the restaurant industry boost traffic, while lowering costs and improving customer experience. To make strides toward the future, restaurant owners are urged to increasingly add IT and innovation as ingredients of their business recipe.

In the report, entitled ‘Apps as a Main Course’, the consultancy finds that the restaurant industry continues to face challenges, costs are up while competition remains stiff. Getting people to come to a restaurant over that of the competition takes not only good quality food in the relevant price bracket, but also an effort to continuously reach out to and maintain customers. While the macroeconomic fundamentals and consumer interests remain relatively stable, a tough cost landscape has emerged which is putting increased pressure on margins. As a result, many companies are placing cost and margin management on the front burner in terms of their strategic priorities. One emerging method of dealing with costs, say the consultants, is to find innovative ways in influencing possible customers though technology.

Digital Medias influence on dining decisions

In their survey of how mobile and internet technologies are being used, about 30% of respondents said that in the previous month, they had used a mobile device to make restaurant reservations or order a meal. However, the two biggest reasons diners use the Internet are to look up directions to a restaurant and to get discounts and coupons offered by restaurants. Social networking was engaged, for instance, by 19% to follow a favourite restaurant on Facebook or Twitter, which is up from last year’s 15%. Email too was used by respondents, with company’s emails helping to direct customers to their seats. None of the communications technologies however, were ‘very influential’ on getting customers through the door.

Technological engagements
The survey explores four general ways in which companies are attempting to boost their current effectiveness by accessing and attracting customers through digital channels: Loyalty Programs, In-Restaurant Tablets, Mobility Platforms and Focused Targeting.

Loyalty Programs, In-Restaurant Tablets, Mobility Platforms and Focused Targeting

Loyalty programmes were found to effective, and to benefit from the advanced analytics companies are able to create about customer groups, and even individuals. Respondents point out however that they are generally only engaging with loyalty to one or two chains or individual restaurants. Indeed, when asked how influential restaurant loyalty programs were in their selections of restaurants to visit, 34% of the survey respondents said such programs were not at all influential, 26% said they were only slightly influential, and 28% said they were somewhat influential. Just 12% described such programs as either very or extremely influential in their dining out choices.

Restaurant chains using tablet technology

Another way in which customers may be engaged by technologies is to have tablets available in store. When asked whether the availability of technology at the table affects their decisions on where to eat, 37% responded “Not much—I don’t think it helps, but it’s not bad,” and 25% said, “Somewhat—I would consider it helpful but not necessary.” There are risks associated with the introduction of technology as the first face the customer meets instore, with 16% saying they would never consider eating at a restaurant that had technology at the table. This technology, when engaged with by customers is used in a number of different ways, the most common use is for customers to pay their bill through the technology. With reviewing the menu and attending the server following in order. The downside, noted by the report, is the high investment costs, with creating app platforms that provide the same service but without a company equipped electronic tool potentially being more cost effective while delivering relatively the same service result.

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Women remain underrepresented in UK's hospitality industry leadership

12 April 2019 Consultancy.uk

Female engagement at the top level of the UK hospitality industry is still lagging, with the vast majority of decision-making roles continue to be held by men. Only 7% of the industry’s FTSE 350 CEOs are women; however, the pay gap in hospitality and leisure is far better than in other industries, at a median of approximately 7%.

The hospitality, travel and leisure (HTL) sector is one of the UK’s largest employers, with 3.2 million people working in its segments. Despite a poor 2018 in terms of tightening consumer spending, the industry is still one of the top sectors in terms of economic activity, hitting £130 billion last year – besting the UK’s automotive, pharmaceutical and aeronautical sectors’ combined activities.

While the industry is one of the country’s largest employers, it still faces considerable issues around diversity at the top. New analysis from PwC has explored the matter, as well what initiatives the industry has engaged to open up its top ranks to a more diverse background.

Female representation at board level for UK companies and HTLs

According to a survey of CEOs, Chairs or HR Directors of over 100 of the most significant leisure businesses across the UK, the hospitality industry has a relatively male-dominated top level. This lags behind the FTSE 100, where companies have female board level representation at 32.2%. Meanwhile, the figure for the combined executive committee and direct reports stands at 28%. This is well above FTSE 250 levels, where female board level representation stands at 22.4% and executive committee & direct reports stand at 27.8%.

For the hospitality industry as a whole, board level representation came in at 23.6%, with FTSE 350 for the industry performing slightly better at 25.1%, while non-listed companies performed considerably worse at 18.2%. The firm notes that the figures hide that while some companies are making strides to improve equality, others are not moving forward – with the positive result reflecting more often the good work of some, while others are not taking the issue seriously in their agenda setting.

Blind spot

The study states, however, that while the overall numbers are relatively strong, the industry has a number of acute weaknesses. These include CEO numbers, with only 7% of HTL FTSE 350 companies helmed by women and 11% of non-listed companies led by female CEOs. Meanwhile, female chairs at FTSE 350 companies for the sector stand at zero. In terms of wider diversity representation, only 1 in 33 leaders at industry companies is from a BAME background.

Pay gap for HTL and hospitality

The report noted discrepancies between FTSE 100 companies and FTSE 250 in terms of improving the number of women at executive level. The majority have met the Hampton-Alexander Review target of 33% women at board level, up from around 25% in 2016. However, the remaining ~40% are not on target, and are unlikely to meet the target by 2020. A similar trend is noted when it comes to executive committee and direct reporting numbers.

Jon Terry, Diversity & Inclusion Consulting Leader at PwC, said, "To make real progress in diversity and inclusion, businesses need to elevate it onto the CEO’s agenda and align diversity & inclusion strategy to the fundamentals of the business."

Tracking progress FTSE 250 level

However, one area where hospitality travel and leisure companies are outperforming other companies in the wider UK economy, is the mean and median pay gap between men and women. PwC found that the median of the wider UK economy comes is approximately 14% – with upper quartile companies noted for a gap of low 20%, and lower quartile companies noted for differences of around 2%.

The median pay gap for HTL comes in at well below 7%, with the median close to parity. There are considerable differences, however, with hospitality at 7%, while travel comes in considerably higher, at 22%. The latter figure reflects fewer women in higher paid pilot and technical positions within the industry.