Restaurants Chart a New Course for Customers
As vaccinations increase and social restrictions ease in many countries, the restaurant industry in the Asia-Pacific region—as well as worldwide—is beginning to recover and forge a path forward.
But while the pandemic brought hardships, it also cemented new ways of doing business. From consumer expectations to advances in technology, the world of dining has forever been changed.
“Whatever the restaurants are doing today will continue,” predicted Ivan Liang, Regional Senior Vice President of International Markets at Discover Financial Services. “It would be challenging for them to turn back to where they were 12 months ago as the restaurants have adjusted from a technology, manpower and supply chain standpoint.”
As dining habits and payment preferences have been altered over the past year, new customer habits and expectations are shaping the industry’s future in Asia and throughout the world. In particular, observers point to a few key trends that show no signs of slowing.
To win this business, merchants need to understand the new consumer and maintain their loyalty in a post-pandemic world. They will need to build a seamless experience across both physical stores and e-commerce websites, so that a customer who has been shopping at a retailer’s website will have a comparable experience when shopping in-store.
The Convenience of Ordering and Paying Online
With dining rooms closed and alternative models needed quickly, restaurants maximized profits by offering omnichannel services that included click-and-collect, drive-through and delivery services.
These provided a touch-free experience, while giving flexible ordering and payment options.
These changes were critical to continue operations during the pandemic. But consumers adapted perhaps more than expected. They embraced the convenience of ordering and paying through various channels. And with the use of payment and delivery apps, they found the streamlined fulfillment that comes from having their payment information stored and easily accessible.
This continuing trend is seen globally. For example, in the U.S., the mobile order-and-pay market for Quick Service Restaurants (QSR) increased 17 percent in 2020, according to Mercator Advisory Group.1 The research firm further predicts this channel will grow—between 15 and 20 percent annually even after the impact of COVID-19.1
While this pivot to mobile paying represents a shift globally, it primarily cemented what had been occurring in Asia. “China was already much more mature in terms of mobile payments because of widespread use of QR codes and super apps,” noted Susanna Chan, Regional Senior Vice President of Global Acceptance at Discover Financial Services. “Restaurants had already started to use these kinds of payment checkouts a few years ago.” This previous adoption is expected to serve Asia Pacific restaurants well going forward.
The Preference of Touch-Free When Customers Return to Dining In
Although diners are increasingly flocking to restaurants when they reopen, customers remain cautious and expect restaurants to provide a safe and mostly touch-free experience.
“The bar has been raised, and the customer will definitely pick a restaurant where they feel safe,” said Liang, whose focus is primarily on business in China.
This has created a restaurant experience that in many ways mirrors what’s found in the more-remote method of delivery or pickup. Customers still often use a mobile device to read a menu and order. But diners are increasingly avoiding cash, preferring in-person payment methods such as contactless cards, mobile wallets and even facial recognition in some restaurants in China.
This behavior has spurred a significant shift in the point-of-sale technology that restaurants use. Whereas the use of card payments was previously concentrated in middle-tier to high-end restaurants, now even fast-food eateries are turning to cashless, Chan said. “They’re seeing patrons lean toward contactless and mobile wallet payments, so they need to equip their POS terminals to cater for that.”
To help protect these POS payments, many restaurants are also seeking more security through new technology such as D-PAS Connect, which facilitates contact and contactless payments, whether based on a card, mobile phone or wearable device.
Again, this shift is part of a worldwide trend. In the U.K., a study from Discover® Global Network, hospitality research consultancy CGA and UKHospitality reported that 45 percent of consumers like to order food and/or drinks directly on mobile devices. In fact, 40 percent of consumers overall said they think using technology to book, order and pay forms part of a good experience in pubs, bars and restaurants, according to the report.
“There is widespread agreement that restaurants must respond quickly to changes in the way that guests wish to pay—whether through new forms of technology or new types of card acceptance,” the study concluded.
Both Chan and Liang, who are based in Hong Kong and help direct the Asia-Pacific region for Discover, agree. “Since customers no longer want to use cash, restaurants who never considered other payment methods are interested to explore ways to enhance these capabilities,” said Chan. “Our aim is to work with all those mobile wallets whenever applicable so our cardholders can enjoy the benefits of using whatever payment method suits them.”
While customers increasingly shift to touch-free methods for health reasons, they also define “safe” as knowing their information is being used securely. “Discover is one of the most advanced payment companies,” Liang added, “and we are continuously rolling out the latest security technology to enable customers to transact without fear.” In particular, Liang pointed to the increasing popularity of ProtectBuy® for card-not-present transactions, which adds an important layer of protection through additional customer authentication for online payments.
New Technology Adds Up to a Better Customer Experience
As they grapple with labor shortages, restaurants have also invested in new cutting-edge ways to serve their customers dining in. One solution that’s been tried in Japan and China involves robot waiters to avoid the potential health risks associated with human interaction.
More commonly found, though, are new ways to connect more directly with customers. In-house ordering platforms—from self-serve kiosks to computer tablets— allow customers to place orders and pay in person from a single restaurant screen. This connection also gives restaurants an additional chance to engage, and it can even generate revenue through additional advertising options.
“These screens can create an opportunity to engage with the consumer by offering an interaction, such as asking them to scan a QR code, provide a ‘Like’ on the site, or post a photo on social media to enjoy a discount,” Liang explained.
While these changes to traditional service models and new technologies can require some investment, today’s restaurant equipment is increasingly more sophisticated than just a single terminal at checkout.
The increasing popularity of Tap on Mobile, for example, gives consumers the option to tap their mobile device or contactless card to the merchant’s certified mobile device, such as a smartphone or tablet, to complete the transaction. Without the need for expensive hardware, this simple and convenient payment option— at kiosk, curbside or at the table—gives merchants the flexibility to conduct transactions anywhere.
These additional options for easy and quick interactions with customers are increasingly important. As the world reawakens to in-person experiences, the restaurants that take advantage of new methods of service, order fulfillment and contactless payments will find customers who appreciate their focus on safety and efficiency.
“The customer has adopted contactless payment as their method of choice; it’s what they’re familiar with and how they feel secure and safe in enjoying their dining experience,” Liang observed. “We recognize this reality, which is why we continue our commitment to focus on these customer needs and work with our business partners in each market as they continue to move forward with even more advances.”
1 Mercator Advisory Group, November 2020. How Mobile Order And Pay Provides A Lifeline For Restaurants And Retailers During Covid-19. Viewed 18th April 2021.
The information provided herein is sponsored by Discover® Global Network. It is intended for informational purposes, and is not intended as a substitute for professional advice.