1. NEW TECHNOLOGY IN THE
RESTAURANT INDUSTRY
A look at how the integration of automation in the
restaurant industry will impact both owners and
workers alike.

2. Various technological utilizations are
currently transforming both the
consumers’ and the restaurant owners’
experience
Technology providers and resellers
will need to adapt in this fast paced
and ever-changing technology
landscape.
Increased minimum wage restriction is
one of the main drivers that drives
restaurants to adopt various
technologies.
Restaurants also have to consider
various psychological impacts on their
customers as they start to employ
more and more technology in their
operation.
The overall findings suggest that casual
lunch restaurants are better suited to
increased technology.
Consumers consider many factors
when they are trying to get a meal.
These factors and their importance
also vary depending on circumstances,
and they will affect the restaurants’
decisions concerning technological
implementation.
Integration of automation and
various types of technology in
the restaurant industry will
have a far-reaching impact on
all of the stakeholders, the
technology providers, the
restaurant owners, and, most
importantly, the consumers.

3. Why automation?
Various technological utilizations are
currently transforming both the
consumers’ and the restaurant owners’
experience
New technologies are improving order
accuracy and wait times for customers looking
for a faster dining experience.These
technologies also change perspectives of the
restaurant owners. Some examples of these
innovations include:
Mobile and online ordering is capable of
significantly reducing the customers’ wait time
and making the experience of getting food more
efficient.
Online payment system also further reduces
the customers’ wait time after they are done
with their meals.
A look at how the integration of new technology in the restaurant
industry will have a large economic and social impact on restaurant
owners.
Kiosk Ordering speeds up the ordering process
without increasing labor costs. It can also be
programmed to upsell, thus increasing the
revenue. In fact,Wow Bao, a Chicago-based
fast-food restaurant, reports that the check
average is 89 cents to $1.49 higher at kiosks.
Digital menu,Tabletop E-waiter and
checkout allow the consumers to enjoy their
experiences at their own paces. Transferring to a
digital menu board also helps a restaurant in
reducing its costs.
Online coupons and promotion help the
consumers keeping track of the restaurants’
offerings, thus increasing the likelihood that
they will make use of these promotions.
Figure 1: Proportion of restaurants that have a smartphone apps.
More than half of apps
feature:
oMenus
oMaps
oLoyalty Program
oPayment Options
oOrdering
oNutrition Information
Adapted from: http://www.hospitalitynet.org/news/4076217.html

4. Eatsa leads the way.
This fully automated restaurant integrates
various technology systems such as online
ordering and payment. It is able to sell high quality
food at a low price because they have almost no
labor costs (with the exception of the chef) due to
the presence of automation in the restaurant.
In fact, a fully automated restaurant unit—
while sounds like something that would only
happen in the distant-future— is already being
developed by the students at MIT. Spyce kitchen
is an entire restaurant that works on its own,
performing all the tasks ranging from taking
orders to cooking and cleaning.The machine is
currently being implemented in dining halls at
MIT.
Utilization of social media and data to help
with customization and improving the consumers’
experience are also expected to be playing a
major role in the future.
Is human interaction vital?
Critics believe that human interaction is a
necessary feature in the restaurant industry,
however, as Uber and Amazon have proven,
human interaction is not necessary for a
company to be successful. We will explore
more of this idea in the customer perspective
section.
Figure 2: What could be holding the restaurant owners back?
Adapted from: http://www.hospitalitynet.org/news/4076217.html

5. Figure 3: Future Enacted Minimum Wage in 2022 by States
(Darker shade represents regions with higher minimum wages)
Increased minimum wage restriction is
one of the main drivers that drives
restaurants to adopt various
technologies.
With the recent increase in minimum wage
in the US, companies are turning to automation
such as tablets to replace waiters and
waitresses possibly leading to an increase in
unemployment.
products and make sure that they are
offering an integrative solution that can
capture the entire chain of their customers’
need.
In addition, as the technology
becomes more and more complex, the
providers will also need to extend their
roles into consulting as well as expanding
their professional services to ease the
process of installation and staff training,
for example.
Ultimately, the key to success for the
resellers is to understand the technological
needs of different types of restaurants
because these insights will help them in
positioning themselves to capture
opportunities that come their ways.
Technology providers and resellers will
need to adapt in this fast paced and
ever-changing technology landscape.
In order to keep up with the constantly
increasing demand from the restaurant owners’
side, the technology resellers will either need to
specialize or keep expanding their range of

6. The Customer
Perspective
Customers are more concerned
with quality of experience when
dining out for dinner versus lunch.
In a survey conducted to
understand the importance of service
to customers’ dining experience, only
7.7% of respondents chose
‘Experience,’ which encompasses
quality of service, as one of the two
most important factors in deciding
where to eat lunch, while 60% of
people cite it as one of the top factors
in deciding where to eat dinner,
meaning they expect more satisfying
and thoughtful interactions with the
staff when dining out for dinner.
Figure 5: Most Important Factors for Dinner
Cost and
Experience
Experience and
Food Quality
Cost and Food
Quality
Cost and
Time/convenience
Time/convenience
and Food Quality
Experience and
Food Quality
Cost and Food
Quality
Time/convenience
and Food Quality
Cost and
Experience
Cost and
Time/convenience
Figure 4: Most Important Factors for Lunch
Affordability of restaurant is a
bigger deciding factor at lunch than
at dinner.
Most respondents were more
concerned with affordability when
going out to lunch, with 55.4% citing
cost as one of the top decision factors
when deciding where to go to lunch and
only 32.3% for dinner.
These results indicate that sit-
down dinner restaurants are not
as suited for highly visible
automation as casual lunch
spots.
Both of these preferences
suggest that more invasive
automation is better suited for fast
casual/lunch restaurants because
customers are not as concerned with
service at lunch and they want to pay
less, which would be possible to do
without reducing profits as owners
would save money from the reduced
staff .

7. Psychology of Human Interaction
A long list of menu could negatively
affect the customers’ experience.
Famous cognitive psychologist George
A. Miller created a theory stating that people
only remember seven pieces of information
at any given time (plus or minus 2). Menus
on tablets and such often are more dense
and have many sections, which could make
for a more confusing and anxious experience
in the eyes of the consumer.
Is the lack of human interaction due to automation a
problem or just a natural trend in society?
0% 10% 20% 30% 40%
1
2
3
4
5
Key: 1 - not important; 5 - very important
Figure 6: How important is human interaction
to your dining experience?
Implementation of various technologies and
decrease in human interactions could impact
the customers’ loyalty.
With the introduction of technology based
self-service channels such as kiosks at airports,
consumers have become “active participants” as
opposed to a “passive audience.” Because of this
automation, customers are beginning to take the
form of employees, which overall reduces costs
and improves efficiency. Research, however,
indicates that customers are more likely to remain
loyal to a given service provider if the provider
treats them with hospitality and kindness.This
lack of human interaction may lead to an overall
feeling of disloyalty among competitors, yet the
consumer may prefer this convenient alternative.

8. Will increased technology affect customer’s
perception of the quality of service?
Intrusive technology hinders customer-
waiter relations in restaurants with high
quality customer service.
While it helps restaurants with poor
customer service.
If employees successfully build rapport
with customers, the presence of technology,
such as a kiosk or ordering device, will make
customers more likely to rate the quality of the
service encounter as lower than they would
have if no technology had been present.
The presence of technology during an
unpleasant service encounter between
employee and customer can help mitigate the
customer’s feelings of discomfort and lead
them to give the encounter a higher quality
rating.
Adapted from: Journal of Marketing Vol. 78 (July 2014), 113 –124
0
1
2
3
4
5
6
7
8
9
10
Present Absent
ServiceEncounter
Evaluations
Figure 7: Rapport-Building Behaviors
Technology
Present
Technology Not
Present
These findings also suggest that casual
lunch restaurants are better suited to
increased technology .
Employees in these types of
establishments are paid by the hour and
therefore are generally not as service-
minded as a waiter working for tips.
Increased technology could then help casual
restaurants mitigate the risks of poor
customer service provision by its
employees. Sit-down restaurants are
generally protected by the fact that waiters
are mostly paid in tips so they are more
motivated to create a positive experience
for customers.

9. Sources
• http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-
chart.aspx
• https://www.dol.gov/general/topic/wages/minimumwage
• http://thenextweb.com/insider/2012/09/22/how-technology-changing-
restaurant-industry/#gref
• https://www.dol.gov/whd/minwage/coverage.htm
• http://www.theatlantic.com/entertainment/archive/2015/09/the-restaurant-
with-invisible-waiters/403297/
• http://www.steamfeed.com/technology-now-part-restaurant-experience/
• http://www.foxbusiness.com/features/2016/07/01/fmr-mcdonalds-usa-ceo-
minimum-wage-should-be-state-issue.html
• http://www.bls.gov/opub/reports/minimum-wage/archive/characteristics-of-
minimum-wage-workers-2014.pdf
• http://www.cstoredecisions.com/2016/07/08/moving-forward/
• http://www.hospitalitynet.org/news/4076217.html
• https://pos.toasttab.com/restaurant-technology-in-2015-industry-report
• https://docs.google.com/a/umich.edu/forms/d/1axEGW52sFAPPVv59uTR4BYDx
Kz5h2BQv-PQGT6i7py4/edit?usp=sharing
• http://www.wsj.com/articles/why-restaurant-automation-is-on-the-menu-
1458857730
• http://www.wsj.com/articles/why-restaurant-automation-is-on-the-menu-
1458857730
• http://www.foodabletv.com/blog/2015/11/20/restaurant-menu-psychology-5-
principles-of-guest-behavior
• http://s3.amazonaws.com/academia.edu.documents/43556152/2004-fr-
jom.pdf?AWSAccessKeyId=AKIAJ56TQJRTWSMTNPEA&Expires=1468832790&Sig
nature=NgBTAWMmKWjfVonYeTtq3MZWx8A%3D&response-content-
disposition=inline%3B%20filename%3DNew_measurement_scales_for_evaluatin
g_pe.pdf
• http://www.mckinsey.com/business-functions/marketing-and-sales/our-
insights/putting-behavioral-psychology-to-work-to-improve-the-customer-
experience
• http://www.mckinsey.com/business-functions/operations/our-insights/using-
behavioral-science-to-improve-the-customer-experience
• http://searchitchannel.techtarget.com/feature/Technology-in-restaurants-Fast-
casual-sector-represents-growing-market

10. Who are we?
Panyakorn “Pan”
Rakpanitmanee is a junior at
the University of Michigan
studying Mechanical
Engineering with a minor in
Economics.
Isabel Sullivan is a senior at
the University ofVirginia
studying Sociology with a
minor in Spanish.
Seth Schostak is a sophomore
at the University of Michigan
studying business in the
Stephen M. Ross School of
Business with an intended
minor in Intergroup Relations
Education.