By Rick Hynum
Is AI the compliant, eager-to-please servant you’ve always wanted—minus the guilt of, you know, having a servant? Or is it a nefarious tyrant in the making, just biding its time before rising up and conquering the planet?
To be sure, there are reasons to worry about AI’s far-reaching and ever-growing capabilities. Will it replace human workers and lead to high unemployment and economic upheaval? Will bad actors weaponize it to destroy privacy rights or pillage our bank accounts? Will AI weaponize itself and plunge the world into war?
PMQ doesn’t have the answers to these concerns—no one does, it seems—but we choose optimism over despair. For now, at least, AI tools, such as ChatGPT and Claude, are more like friendly and incredibly smart consiglieri than fearsome virtual bogeymen. And anyone with internet access can turn to them for advice and help.
Just ask Sue Pittacora, chief strategy officer for Wavicle Data Solutions in Oak Brook, Illinois. For PMQ’s June-July 2024 article, “AI for Beginners,” Pittacora and other experts provided insights on how major restaurant chains are currently using AI to grow their sales—and how independent pizzerias can start doing the same. Below is the full interview with Pittacora, covering the full range of AI’s current uses for the restaurant industry, from predictive sales and personalized marketing to menu optimization.
PMQ: First, can you tell me a little bit about Wavicle Data Solutions and how the company serves restaurateurs or restaurant chains? And who are your clients in the restaurant sector?
Sue Pittacora: At its core, Wavicle is dedicated to transforming complex data into actionable insights that drive growth, efficiency and innovation. In the context of the restaurant industry, Wavicle has worked with companies like McDonald’s on everything from accurately assessing the effectiveness of ESG initiatives to optimizing operations, crafting targeted marketing strategies, or enhancing customer engagement through an AI-powered sentiment analysis solution.
By focusing on custom solutions that align with each restaurant’s specific needs and technical environment, Wavicle empowers restaurateurs and restaurant chains to unlock the full potential of their data to meet their business objectives and stay ahead of the competition.
PMQ: Many of our readers are very old-school, and they mostly just love making pizza and feeding people. Some use technology to the extent that they have to but prefer to focus on personal relationships and building a sense of community. What would you say to them about AI? Why should they get comfortable with it?
Pittacora: AI sounds intimidating, but with a little bit of creativity and patience, it can be a powerful tool that makes much of the work they don’t want to do a whole lot easier. From using AI functionality in their existing accounting or email tools to get those tasks done faster to using generative AI tools to come up with a list of specials, promotions or events to get people in the door and serve them great pizza, businesses today are leveraging artificial intelligence across various aspects of operations to streamline processes, enhance customer experiences and drive growth.
PMQ: In what ways are you seeing AI being implemented in the restaurant sector right now?
Pittacora: For our customers, which tend to be global chains, they are already ahead of the game when it comes to AI and are using it for a variety of use cases, including:
- Predictive sales forecasting and demand planning: By analyzing historical sales data, weather patterns, events and other relevant factors, AI algorithms can accurately predict future sales. This enables restaurants to optimize their inventory management, purchasing decisions and menu planning to meet anticipated demand efficiently, minimizing waste and maximizing profitability.
- Predicting staffing and scheduling needs based on predicted demand: AI algorithms can recommend optimal staffing levels for each shift, considering factors such as historical sales patterns, time of day, day of the week and special events. This ensures that restaurants have the right number of staff members with the appropriate skills at any given time, optimizing operational efficiency and customer service.
- Chatbots and automated order-taking: AI-powered virtual assistants or chatbots can handle customer inquiries, reservations and other tasks, freeing up human staff to focus on more complex needs. Chatbots can also facilitate automated order-taking, allowing customers to place orders directly through messaging platforms, drive-thrus or the restaurant’s website.
- Personalized digital marketing: AI enables personalized digital marketing initiatives for restaurants. By analyzing customer data and preferences, AI algorithms can create targeted marketing campaigns tailored to individual tastes and behaviors. This could include personalized recommendations, special offers and promotions delivered via email, social media or mobile apps. By providing relevant and timely marketing messages, restaurants can increase customer engagement, loyalty and sales.
However, a key consideration for these use cases is that the restaurant, chain or parent company must have the right data, AI-ready data architecture and strategy in place to make these possibilities a reality.
PMQ: So is AI really just a tool for the big chains rather than independents and emerging chains?
Pittacora: AI can also be leveraged by smaller restaurants and chains. Many of the tools they use today are introducing AI features to help them make better, faster and more accurate decisions. Additionally, tools like ChatGPT can be used at little to no cost to help with everything from ad copy ideas for promotions and even crafting responses to reviews.
PMQ: Let’s talk about operations. What are some specific ways that AI can be used to improve operational efficiency in restaurant settings?
Pittacora: Again, it depends on the size of the restaurant or chain. Larger restaurant groups or chains with massive amounts of customer data and AI-ready data environments can use AI for:
- Predicting demand to help determine the right quantity of raw ingredients to prep, resulting in lowered food waste, or to determine the right staffing levels based on time of day
- Analyzing customer feedback across platforms and understanding feedback at scale to drive improvement.
- Understanding the prep time of certain menu items to optimize menus and increase the speed of service.For smaller chains or individual restaurants, it comes down to creativity and determining ways to leverage AI tech to do things faster or even automate menial tasks. This might include leveraging generative AI to help create training manuals and instruction documentation or translating menus to drive traffic from new demographics.
PMQ: How can AI be used to personalize recommendations and menu offerings for individual customers?
Pittacora: Larger restaurants have a massive amount of data about their customers, including customer-specific data such as order histories from apps or accounts or more general information such as demographics of age groups or locations. This information can also be combined with external data sources like census data or income levels in a particular zip code.
AI can help pull this data together into not only highly targeted customer segments and journeys but also help restaurants determine how to use that data to create personalized messages and new menu offerings. For a pizza chain, this might look like:New specials and ingredient combinations based on local ethnic demographics.Personalized emails offering family game-night specials for parents with young children.
Larger or global restaurants can even use geotargeting and weather data to send messages through the app advertising an ice-cream or cold-beverage special to nearby customers on a hot day.
PMQ: What about using AI-driven analytics and predictive modeling to optimize menu pricing and profitability?
Pittacora: AI-driven analytics can help take data insights a step further by increasing the number of sources and complexity of the analytics. For example, rather than analyzing data just from your POS system, AI can make it easier to combine that data with information from your ERP or financial software. You can also add external data sources such as review sites or weather data. Together, these data sources can help optimize operations, look for ways to save costs and find new revenue streams.
Predictive modeling can be used to support dynamic pricing. This means that restaurants can seamlessly raise or lower their prices based on the cost of supplies or even the prices of local competition. Demand forecasting can be used to predict things like future staffing needs, ordering and pricing based on historical data, seasonality, and other relevant factors.
PMQ: It seems to me that AI is a tool that could be very helpful for independent pizzeria operators like our readers, but, like you said, it’s also a bit intimidating. What’s the best and most affordable way for them to get started right away with AI?
The easiest—and often free—way is to start with a generative AI tool like ChatGPT. While it can’t help to automate tasks or tell you anything specific about your operations or customers, it can be a great way to spur ideas, create copy for signage or menu descriptions or more.
For example, here is the prompt we tried in ChatGPT and the answer:
Prompt: Act as a manager at a local pizzeria. The pizzeria has been a neighborhood staple for 40 years, but with changing neighborhood demographics and new restaurants and even other pizzerias moving in, it’s getting more difficult to stay ahead. Come up with a simple way to engage the community, drive brand awareness to these new demographics, and increase business.
ChatGPT Output: “As the manager of our beloved pizzeria, I understand the challenges we face with changing demographics and increased competition. To stay ahead and continue serving our community for another 40 years, we need to engage with our customers in new and exciting ways while reinforcing what makes us special. Here’s a simple plan to achieve that:
Community Events: Host regular community events such as pizza-making classes for kids, pizza-tasting nights featuring specialty pies, or even live music nights. These events not only bring people together but also showcase our expertise and unique offerings.
Social Media Campaigns: Ramp up our presence on social media platforms like Instagram, Facebook and Twitter. Share behind-the-scenes glimpses of our kitchen, feature customer photos enjoying our pizzas, and run contests or giveaways to engage our online audience.
Loyalty Program: Launch a loyalty program where customers earn points for every purchase, which can be redeemed for discounts or freebies. This encourages repeat business and fosters a sense of loyalty among our customers.
Collaborations with Local Businesses: Partner with nearby businesses such as breweries, coffee shops or dessert shops for cross-promotional events or combo deals. This helps us tap into new customer bases while also supporting other local businesses.
Community Outreach: Get involved in community initiatives or sponsor local events, sports teams or school fundraisers. This not only boosts brand visibility but also demonstrates our commitment to the neighborhood.
Online Ordering and Delivery: Enhance our online ordering platform and offer convenient delivery options. In today’s fast-paced world, providing easy access to our delicious pizzas can attract busy customers who might otherwise opt for alternatives.
Customer Feedback and Adaptation: Actively seek feedback from our customers through surveys or comment cards, and be willing to adapt based on their preferences. Whether it’s introducing new toppings, adjusting portion sizes or offering healthier options, listening to our customers can help us stay relevant.
By implementing these strategies, we can strengthen our connection with the community, drive brand awareness among new demographics, and ultimately increase business in a competitive market.”
