How Conversational AI Plays a Key Role in Foodservice Industry

By: Gaurav Singh, CEO & Founder, Verloop.io (Customer Support Automation Platform

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With Conversational AI in the foodservice domain, there’s a significant impact on the customer LTV, check size, customer conversion, and loyalty.

With the technological paradigm shift in every sector, the food industry is slowly turning into a food-tech industry; the involvement of Conversational AI in the foodservice industry is phenomenal. 

The food industry is one of the fastest-growing, most popular and biggest industries in the world.  According to the World Bank estimates, food and agriculture constitute 10% of the total global GDP. As per the statistics offered for 2019, the input of food and agriculture was around $8 million of the total projected GDP of $88 million. 

With over 3800 food tech companies working and mapped as per the  FoodTech Data Navigator, it is pretty clear that there is an upward trend and increasing use of robotics, drones, 3D printing, AIs and much more in the food industry. 

Let us try to understand what is Conversational AI in the foodservice industry and the benefits of AI.

What is Conversational AI in food service?

Conversational AI facilitates the machines to understand and respond to human queries in the most efficient manner without any hurdle.

Though Conversational AI works similarly for all industries, the question ‘What is AI in food?’ requires specific answers.

The Conversational AI in food service uses voice, text, or actions to interact with the customers and know their needs to fulfil the customers’ needs. 

Restaurants are using Conversational AI to enhance customers experience while ordering food and supporting customer queries post-purchase. After all, digital ordering is growing 300% faster than dine-in. 

They are also using it for expanding their reach on multiple channels. This satisfies the customers’ need for convenience. 

As per Google and Boston Consulting Group (BCG), the Indian Foodtech industry is expected to be $8 billion by 2022. Moreover, it’s growing at a compound annual growth rate of 25-30%. Clearly, there is a lot of scope for technological improvements.

Now that we know what Conversational AI can do, the question remains, “what will be the benefits of AI in the foodservice industry?” Let us find out.

Benefits of AI in Foodtech Industry

From facilitating 24*7 customer support to adopting the omnichannel presence, there are multiple benefits of adopting Conversational AI. Yet, the use cases of Conversational AI in the foodservice industry are linked to majorly 5 segments. 

Startups like Zomato, Swiggy and FoodPanda have already carved a niche in the food-tech sector. The use of Conversational AI will take the performance of food tech several notches higher.

All this technological shift in the food industry aims at but one thing; the ease of the end consumer, which has made it easier to identify the benefits.

1. Ease of ordering without hassle

The issue that the foodservice industry faced was linked to the ordering cycle. The time taken up by different individuals to place the order varies, ending up to hold the line or repeated visits by the service provider. Though it might not be a visible issue, it could affect the business. 

With the help of Conversational AI in the foodservice industry, customers can place orders without hassle. Conversational platforms talk to customers in natural human language and simplify the whole process. Undoubtedly, 73% of diners agree that using the restaurant technology has improved the guest experience.

2. Increase in the check size 

The conversational platforms are built in the manner that they can initiate the conversation with the users based on their choice and preference. It means that when the customer is placing the order, the Conversational AI in food service can offer multiple options to add to the order that might have been used by other customers or the same customer previously. 

Remembering such things is not possible for humans. This predictive recommendation AI use historical data and context to provide personalised suggestions. Making the suggestions incredibly improves the chances of increasing the check size.

3. Provide the nutrition information by improving transparency

With the health concerns growing among the people, there is an increase in the questions related to the nutrition content. Conversational AI can smoothly answer the questions and even make suggestions for the food choices that suit the nutrition need and taste of the customer. 

Providing details like this ensures the customers get best experience, giving the business a competitive edge. A happy customer is a satisfied customer and a repeat customer.

4. Voice ordering is perfect

With the growing trend of working from home and people stuck indoors, home delivery is also rising. Thanks to the Conversational AI in the foodservice industry, you can operate with the help of voice commands and place the order while working. 

Also, voice orders can clarify the expected needs of the customer more effectively. They are faster, inclusive and provide a better customer experience.

5. Less burden on staff

During the peak hours when there are multiple online and offline orders, the burden on the staff is high. This can lead to errors or mix-ups, creating a base of dissatisfied customers. No wonder restaurants struggle with 73% annual employee turnover.

The Conversational AI in the foodservice sector can lessen the burden of the staff associated with taking and confirming orders; they can now pay more attention to preparation and deliveries. Indeed, this is sure to satisfy the staff and ensure they stay for long.

Conversational AI in foodservice: the food tech future

There is an increase in the number of people placing orders online. With the shift of the food industry to technological platforms, the demand for Conversational AI in foodservice increases at an incredible pace. 

According to a Hubspot survey, 84% use conversation AI at home, 44% in cars, and 27% at work. This trend is expected to rise exponentially in the years to come.  With this projected growth of AI technology in all walks of life and 95% of restaurant-goers agreeing that technology improves efficiency, adopting Conversational AI in foodservice becomes imperative.  To conclude, there’s a significant impact on the dining frequencies, customer lifetime value, check size, customer conversion, and loyalty.