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Digitalization - an imperative to reimagine HoReCa segment in 2023 and beyond
Digitalization - an imperative to reimagine HoReCa segment in 2023 and beyond

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HoReCa refers to the food and beverage (F&B) service industry and the infrastructure that makes F&B available to us e.g., restaurants, cafes, and hotels. The COVID-19 crisis has boosted the long-overdue digitalization of the HoReCa (Hotels, Restaurants and Catering Services) sector, which would have otherwise taken years to establish under normal circumstances. This article explores a few trends shaping this industry and discusses technology initiatives that can enable HoReCa enterprises to thrive in this rapidly changing market and drive growth.

Uncovering the megatrends shaping the HoReCa segment:

1. Demand for increased assortment of food choices: HoReCa players across the globe are ramping up the menu card to compete with changing and evolving consumer consumption trends as following:

  • Increase in health and nutrition consciousness
  • Increase in consumption of vegan gluten free meals
  • Rise of functional foods e.g., ‘pharma food’, ‘wellness food’, ‘probiotic and fortified foods’, ‘dietary supplements’
  • Crave for enhanced food products and services e.g., bubble tea, different flavours, and variations of coffee, etc.
  • Desire to have exotic food locally

2. Safety and sustainability: “We believe that the delicious, affordable, and convenient meals you love must be sustainable.” - that is how one of the largest restaurant brands has redefined their mission statement. HoReCa brands are increasingly focusing on sustainability topics and a few of the latest sustainability trends are:

  • Shift to 100% biodegradable cutlery and packaging
  • Source or produce meat, poultry, seafood, and cotton sustainably
  • Focus on driving water stewardship across enterprise value chain
  • Increase in monitoring of carbon emissions and energy consumption
  • Test and scale more sustainable and regenerative practices to help protect nature, reduce greenhouse gases, and secure lives of farmers
  • Increase in focus on employee and guest safety

3. Convenience: Convenience’ is an indubitable trend in the gastronomy business and be it convenient production of food or convenient delivery of food, this is an unavoidable word in the HoReCa sector. A few of the latest convenience related trends are:

  • Rise of ‘Dark kitchens’ with virtual presence to deliver meals in short time
  • Increase in use of augmented reality menus, QR codes and kiosks to limit contact moments
  • Optimization of inventory levels within the supply chain, improved delivery lead times, more inventory turns, and reduced ordering and holding costs

Digital Transformation an imperative to reimagine HoReCa:

As evident, the ‘service’ factor of HoReCa industry is evolving continuously. Digital transformation has played a significant role in solving the challenges faced during this evolution and in fueling growth in business in this industry.

However, enterprises have been slow in the adoption of digital technologies and there is still a need for accelerating these digital initiatives to drive faster innovation and growth. A few ways how HoReCa players can accelerate their digital transformation to stay ahead in the competition are:

1. Leveraging big data to create delightful customer experiences: HoReCa players must leverage consumer data and create insights to deliver contextualized and differentiated experiences across the customer journey. Contextual commerce can take personalization to the next level and further add to the customer delight by enabling HoReCa companies to create a tailored and adaptive experience by further extending existing segmentation details with personal in-moment information.

2. Technology to promote safety & sustainability: With immense focus on sustainability related topics, HoReCa players must focus on tracking waste, carbon footprint, reducing plastic usage, etc. They must invest in technologies that track sustainability metrics and recommends solutions. Leading players like Starbucks and McDonald’s have formed consortiums to accelerate the circularity of foodservice packaging and address waste challenges. Additionally, HoReCa brands must continue investing in energy and carbon tracking smart systems. Hilton’s deployment of proprietary environmental and social impact reporting platform, Lightstay to manage energy performance and drive improvements is an example of investment in such technologies.

3. Digital innovation driven by convenience: While leading HoReCa brands started adopting free WiFi, mobile reservations, contactless payments, installation of smart TVs and content streams inside restaurants and guest rooms and robots for in-restaurant services and hotel concierges, these solutions were just the icebreaker to boost digitalization in the sector. Many of the digital initiatives require added momentum in the post pandemic era. For example, the digital check-in is still a vision and far from being completed. A great user experience would be that all time-consuming activities e.g., filling out registration forms, ID and credit card check, key card printing, get replaced by smart digital solutions. Further, IOT based solutions like people monitoring, queue management will alleviate the waiting or queuing time at front desk and enable companies in this industry to drive social distancing protocols and reduce crowding.

4. Cloud adoption – A must for better cost efficiencies and for harnessing the power of technologies: The last two years has also seen this industry adopt cloud migration to drive cost and operational efficiencies. HoReCa brands must adopt cloud migration to improve point-of-sale experience for customers, reduce IT spending, promote customer loyalty, and harness the full power of artificial intelligence. Cloud-based point-of-sale solutions can also enable restaurants to track real time data to further aid in better decision making, enable contactless payments, easily update menus, reduce downtimes, increase security, and improve staff productivity. Migrating reservation applications, property management and data processing platforms to cloud will aid in tracking reservations and occupancies, seamlessly integrate new properties into its network to meet global demand and offer the best rates and discounts. To enhance employee safety, HoReCa brands are using cloud-based collaboration applications. Further, companies can also leverage technologies to drive automation of their business processes or procedures to reduce labor or unnecessary time spent.

Conclusion

The pace at which the HoReCa sector is investing in digital transformation is way behind from where it needs to be. HoReCa Companies need to act fast now and leverage digital transformation to sustain market pressures, drive growth and boost revenues. Digital transformation is not just crucial for big giants and market players but a necessity for the industry as a whole and the best way to compensate for the lost sales due to COVID and secure long-term growth. Companies need to harness the power of digital technologies and reap holistic benefits (short-term and long-term) by leveraging new age technologies holistically in the area of customer experience, service, loyalty as well as back office to further drive improvements in their customer experience, boost sales and drive efficiencies in operations.

About the authors:

Ankan Guria is a business manager in Wipro and manages digital transformation programs.

Heiko Onnebrink is a principal domain architect at Wipro with 25+ years of experience running production systems worldwide at scale. 

Andreas Schueler is a senior IT consultant at Wipro with 20+ years of experience in managing IT systems in the wholesale and retail industry


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Ankan Guria
Senior Manager

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