Artificial intelligence (AI) is something of a buzzword these days — so much so that a lot of restaurateurs shy away when they hear the phrase. 😨
People are saying things like:
“Surely AI can’t help hospitality businesses, right? It’s so cold and machine-like, and we’re a people-first industry. It simply can’t augment operators because it wouldn’t understand the nuances of my restaurant and our customers.”
Well, they’re right. AI can’t replicate the nuance of humans, and it shouldn’t. That’s not where it offers the most value.
So where does it add value?
In this article, we’re answering this question and dispelling the myths around AI in restaurants. Keep reading to find out how AI works in hospitality, the problems that it solves, and the answers to some common questions about AI.
What does AI mean for restaurants, and how does it work?
With AI, hospitality businesses can make informed and timely decisions to improve scheduling, reduce costs, and increase profit margins. AI learns how your restaurant operates and provides valuable suggestions and recommendations to make improvements.
But how does the technology actually work?
Let’s look at Nory’s AI as an example:
- Nory analyses your restaurant data. First, our technology analyses your restaurant data. From sales and performance to inventory usage and staffing — we review everything.
- We use this data to make predictions. We automatically analyse all this data in real-time to identify trends and make predictions about future performance. Based on the findings from our analysis, we give you suggestions and recommendations on how to increase profits, meet customer demand, and optimise your scheduling to help you make as much money as possible.
Example: Let’s say that our analysis shows you’re overscheduling shifts on a Thursday. We’ll suggest that you reduce the number of staff working every Thursday to keep labour costs down but still meet customer demand.
- We keep learning from your data. The longer we work together, the more data we have to analyse. With more data in the system, we can make even better predictions, creating accurate sales forecasts to help you produce demand-based schedules, order the right amount of inventory, and increase profit margins.
Nory success story 🥳 See how Masa accurately forecasts demand within a 3% margin after just three months of working with Nory!
“Constantly being able to see what your sales are, what your cost of labour is — and trusting that is really valuable”
Shane Gleeson, Owner and Founder at Masa
The problem with big data sets, and how AI is the solution
There’s a lot of data out there for restaurants to analyse. Menu sales, productivity levels, food waste, inventory usage — the list goes on. If you’re not used to manually analysing these large data sets or understanding financial metrics, it can be pretty overwhelming.
But you need to analyse this data effectively to identify key opportunities to improve your bottom line.
This is where Nory’s AI can help.
Our software automatically analyses large data sets from your restaurant so you don’t have to. We pull all the data together in one system, analyse it, and give you actions or recommendations to improve your business.
For example, we can help with:
- Demand forecasting. We analyse your historical data alongside external factors (like local events, seasonality, and the weather) to predict demand. As a result, you can improve your labour scheduling, optimise inventory orders, and deliver a seamless dining experience.
- Staff planning. With demand forecasting, we can help you optimise your labour schedules to increase profits and prevent overspending on wages. Have we predicted a busy Saturday coming up? We’ll tell you how many staff you need on shift to meet customer demand. Or perhaps we’re telling you a quiet Monday is on the horizon? We’ll let you know that you need less staff than usual so you don’t dent your profits by scheduling too many staff.
- Inventory management and procurement. When we analyse your sales and performance metrics, we’re also looking at your inventory usage. Are you overordering ingredients and spending money on food that goes to waste? Are you not ordering enough to meet customer demand? We’ll let you know so that you can update your inventory orders accordingly.
In other words, we do the heavy lifting so that you can focus on other areas of your business — like running a profitable restaurant.
Improve your restaurant operations with Nory
AI shouldn’t manage all your restaurant operations. It should support your existing processes, helping you optimise your schedules and cut costs to improve your bottom line — but it shouldn’t be used to manage every little detail of your business. It’s simply not built for that.
Conor Sheridan, Founder & CEO of Nory, put it pretty well in his LinkedIn post:
“AI is a tool that can solve certain problems / use cases, it’s not a general solution to running a complex and challenging business.”
FAQs about AI for restaurants
How can AI be used in a restaurant?
AI can analyse historical sales and performance data to make predictions about future demand. It helps restaurant owners improve their operations, optimise staff schedules, and increase their bottom line.
How is AI transforming the restaurant industry?
It’s always been hard for restaurant operators to track key data points accurately and in real-time. With AI, this challenge is becoming a thing of the past. Now, restaurant owners can accurately track key data points across the business, getting valuable insight into performance. It’s unlocking new ways to improve operations and make more money.
What are the disadvantages of AI in restaurants?
Learning how to use new technology can be challenging for restaurants that are new to it. The good news is that some platforms — like Nory — are super easy to use.
Plus, we provide unparalleled customer support, ensuring that we’re on hand to answer any questions to help you make the most of the system. You’ll have a dedicated account manager to check in with, and we’ll arrange regular calls and catch-ups to ensure everything is running smoothly.
Can AI create a menu?
Yes! With Nory, for example, we can analyse your most popular and profitable items to help you engineer a menu that’ll increase sales and boost profits.
