Big Data and

Restaurants:
Something to
Chew On
B
ig data. It’s what Amazon uses to track millions of
products and customers to deliver personalized
buying suggestions whenever anyone visits its
website. Or how Netflix recommends movies to keep its
customers coming back.
Maybe you’ve heard the term, but you don’t see how big
data could possibly apply to your restaurant. It seems so
big and so complex.
Actually, big data isn’t that big anymore, thanks to tremen-
dous gains in computing power, storage space, access to
the cloud, and new software designed to help restaurants
of all sizes unlock the secrets of their data and put useful
Savvy restaurant
information at their fingertips.
operators leverage
The data from your POS, marketing, accounting, inventory
and scheduling systems is a vein of gold just waiting to today’s technology
be mined. Now your establishment can benefit from the
same predictive analytics and business insights previously to turn POS and
reserved for the likes of Amazon or Google.
This guide will help you understand what big data is and
marketing data into
how you can collect, measure and use it to make improve-
ments to your operation and your customers’ dining expe-
actionable knowledge
rience. Big data can help you reduce costs and maximize
your marketing ROI. It can lead to new customer insights,
that can yield positive
enhance guest service, build loyalty and increase profits.
business results.
Hudson Riehle, SVP of Research,
National Restaurant Association

Restaurant.org/BigData 3
What is big data?
L
isa Arthur, who wrote the book “Big Data has become the accepted definition of big data.
Marketing,” defines big data as “a collection SAS, the business analytics software company,
of data from traditional and digital sources made further refinements to better understand the
inside and outside your company that represents variables of big data. SAS added two more dimen-
a source for ongoing discovery and analysis.” sions to the original big data definition — variability
and complexity. In a nutshell, big data encompasses
Most experts describe the characteristics of big
structured and unstructured data — from traditional
data using the three Vs: volume, velocity and vari-
sources (inside your operation) and digital sources
ety. Doug Laney of Gartner, a leading information
(including those outside your restaurant from the
technology research and advisory company, origi-
Internet or social media).
nally made those distinctions in a 2001 paper that

Variables of Big Data

Volume Velocity Variety

Transaction-based data stored Data is streaming at unprece- Data comes in many formats.
over time, unstructured data from dented speeds, and it’s becoming Some is structured and in numeric
social media, and sensor and ma- increasingly difficult to process databases. Unstructured data
chine-to-machine data are exam- it in a timely manner. Sensors, include documents, email, video,
ples of large volumes of data that smart metering and RFID tags financial transactions, social posts
can be easily and inexpensively drive the need to deal with or customer preferences. “Manag-
stored in the cloud. However, with torrents of data. As SAS notes, ing, merging and governing differ-
decreased storage costs comes “Reacting quickly enough to deal ent varieties of data is something
new issues: How do you deter- with data velocity is a challenge many organizations still grapple
mine relevance and use analytics for most organizations.” with,” SAS says.
to create value from your data?

Variability Complexity
Data flows may be highly incon- Data flows from multiple sources.
sistent because of periodic peaks. It’s a challenge to link, match,
Social media may trend. Daily, cleanse and transform data
seasonal or event-triggered peak across systems. However, SAS
data loads can be a challenge to notes, “It is necessary to con-
manage. Think about the busy nect and correlate relationships,
times in your restaurant. hierarchies and multiple data
linkages, or your data can quickly
spiral out of control.”

4 Restaurant.org/BigData
Think of the possibilities
A
s you read through this guide, take a few minutes to
jot down the types of data your establishment collects
internally and externally, from point-of-sale transactions to
customer information such as birthdays and anniversaries. You’ll
be surprised how much data you have. The question is, are you
collecting and processing the data in a way that is useful to your
managers and staff?
Mike Hampton, dean of the Chaplin School of Hospitality and Tourism
Management at Florida International University, says the purpose of
collecting data is to better predict changing guest desires, behaviors
and trends. In turn, that data can drive menu changes, service, delivery
changes or new location opportunities.
As the case study below demonstrates, there are many, many data
points in a restaurant. Everything you do creates data. When you think
about it, your restaurant is a complex, multi-faceted operation that
produces an incredibly rich array of data.
Think about your product mix, food and beverage costs, labor costs, You’ll be surprised
customer interactions and social media — a few obvious data points.
You’ve got food coming into your kitchen from various suppliers, menu
how much data
and ingredient considerations, meal preparation, bar management,
staffing schedules, table turnover, customer promotions — a ton of
you have. The
information just waiting to be analyzed.
question is, are
you collecting and
Before considering what data you should collect and how you can
analyze it, take a look at this foodservice example, courtesy of
Gartner’s Doug Laney. This might whet your appetite for big data
processing the
and give you a few ideas.
data in a way that
case study
is useful to your
Quickservice drive-thru
A quickservice chain monitors its drive-thru lanes to determine managers and
which items to display on its digital menu board. When lines are
longer, the menu features items that can be prepared quickly. staff?
When lines are shorter, the menu features higher-margin items
that take a bit longer to prepare. Those subtle changes in the
menu board wouldn’t be possible if the company couldn’t tap
into a steady stream of data in real time to make instantaneous
adjustments.

Restaurant.org/BigData 5
Measurement
leads to
improvement
B
ut data isn’t just numbers. It’s information. And information
is power. The faster and more accurately you can access and
analyze information about your establishment, the better you
can manage, control and improve your operation.
Performance improvement expert and author H. James Harrington
once said, “Measurement is the first step that leads to control and
eventually to improvement. If you can’t measure something, you can’t
understand it. If you can’t understand it, you can’t control it. If you
can’t control it, you can’t improve it.”
The rate at which you use condiments — that’s data. The number of If you can’t
times employees come in late — that’s data. The number of comped
drinks you give because of service errors — that’s data. There are also measure some-
opportunities to use data to drive incremental revenues and target
new customers more effectively. thing, you can’t
Your data has value. It may seem trivial or underwhelming at first
glance, but even the most discrete bits of information can help you
understand it …
better run your restaurant if you can measure them.
If you can’t
Any information you can collect provides actionable data to identify
trends, reduce costs, gain customer insight and provide a better control it, you
experience. All you need is a way to identify, track and optimize
your data. can’t improve it.
That sounds like a tall order, but it’s not.
H. James Harrington
Author

6 Restaurant.org/BigData
Gathering the data
S
tart with data creation. Where does data in your restaurant
come from, and how do you store it?
Actually, your staff creates most data. This is information that
comes from the operation itself. It’s the inventory you take of supplies,
food and beverages. All of your sales transactions. The ability of your
POS system to break down sales by time, size of party, menu items,
even ingredients. Your employee schedules, payroll expenses, your
gas and electric bills, credit card sales versus cash. The list goes on
and on.
Then there is the data from your customers and outside the operation.
That includes guest preferences, such as a customer’s favorite table or
menu item, special requests, allergies, even photographs.
Other sources of outside information include OpenTable, Facebook,
Twitter, Yelp, TripAdvisor, Foursquare, Urbanspoon or Instagram.
Your POS system is your biggest goldmine for information, but many
restaurateurs have yet to fully utiize it. Everything runs through your
POS, and if you’re not taking advantage of its data-collecting and
reporting capabilities, you’re missing out on huge opportunities.

where data comes from

Structured
(inside the business)
•P  OS — What’s selling, how Unstructured
much does it cost, who’s (outside the business)
buying it
• Suppliers — Product •S  ocial media — Likes, trends, Why you need
availability, prices retweets, shares, comments
• Accounting — Costs, • Customer profiles and  both
revenue, margins loyalty programs — Names, Structured data tells you the
addresses, email, preferences
• Labor — Wages, salaries, “what”; unstructured data
tips • Weather and traffic  tells you the “why.” Using
patterns both gives you a more holistic
view of your customer.

Restaurant.org/BigData 7
Guest-check analytics to
the rescue
Y
our point-of-sale software generates National Restaurant Association partner, has been
volumes of data, but most restaurants aren’t working for several years to create a “dictionary” of
using that information to their advantage. POS abbreviations so codes can be matched with
Several software solutions can help you analyze that corresponding products.
data, known as guest-check analytics. You should be Unlike grocery stores, restaurants don’t have UPC
able to draw insights from total sales, total covers, codes on their products, so each restaurant’s POS
average check, sales and covers by server, food has different codes for the same products.
and beverage costs, labor costs by department, the GuestMetrics has created software to “read” these
cost of voids and promotions. It also can help you unique codes and digitalize the data to categorize
construct server scorecards and identify potential it by brand name, supplier and price class. Then it
sources of theft or fraud. analyzes and converts the data into easy-to-read
Guest check analytics is a growing field, and dashboards for you and your staff to review.
chances are your POS vendor has add-on service Data from the kitchen and suppliers also can help
packages that can help you determine what sells you manage recipes and inventory. You’ll be able
well, how often you order certain items and de- to better control costs and quality and assure
tailed pricing analyses. Equally helpful is the ability consistency.
to compare key indicators over time, such as how Thanks to the cloud, much of this data is acces-
many units of mashed potatoes and gravy you sold sible on tablets or mobile devices. You can be at
last Thanksgiving or how busy the bar was on New home, drinking your morning cup of coffee, and
Year’s Eve. pull up sales data for all of your locations. In fact,
That’s just the beginning when it comes to extract- depending on the programs you’re able to access,
ing information from your POS terminals. You might you might be able to change your menu items in
be able to get more granular if you have the capa- response to trends you see, within a manner of
bility to identify individual products, such as a brand minutes rather than days or weeks.
of beer or wine. For example, GuestMetrics LLC, a

Small business and big data

The New York Times reports that a growing number of mom-and-pop shops are using business 
intelligence (BI) software to track inventory, better staff their businesses, determine profit margins
and achieve greater customer insights.
According to the Times, small businesses are using monitoring software to keep up with Facebook,
Twitter, Yelp and other social media networks. Such software can be programmed to alert
companies when they are mentioned so they can respond in a timely fashion.
When it comes to big data, size doesn’t matter. In fact, the SMB Group estimates that 18 percent of
small and 57 percent of medium businesses are currently using BI and analytics solutions.

8 Restaurant.org/BigData
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to bury paper
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Watching your labor costs

W
ith big data, you can drill down on labor average check size, tips, amount of time spent at
costs more specifically than in the past. the table, types of entrées sold and whether the
You can compare labor costs to sales, server sells the special, a dessert or bottle of wine.
overtime pay, absenteeism, and costs by depart- Smart restaurant managers use that data not to
ment and by server. Armed with this information, penalize servers but to motivate them to per-
you can create schedules that accommodate busy form better. Some give incentives, such as letting
and slow times in your restaurant to better manage high-performing servers choose the schedules they
costs and more efficiently prepare and serve meals. want or giving awards for better service. By using
The next level in analyzing labor costs is to look at the scorecards as a teaching tool and motivator,
the efficiency of your servers. Managers can view operators are increasing sales and improving the
individual scorecards that provide insight into a customer experience.
server’s performance. That includes a server’s

Restaurant.org/BigData 9
Using data to drive
customer experiences
P
ersonalizing customer experiences becomes reality when
you draw on all of the data available about your guests. New
technology services like Swipely work with your POS system
to gather information about your guest checks and present it on a Data-driven
dashboard. Such information includes new and repeat customers,
their orders, how long they were at the table and what they tipped. insight can
Bars and restaurants use that data to build customer profiles that
include favorite drinks and food. They also use it to create loyalty maximize your
programs with promotions that target specific items they like to order.
In fact, data-driven insight can maximize your marketing ROI. Scott marketing
Shaw, chief innovation officer of Fishbowl, an email marketing compa-
ny for restaurants and NRA partner, cites a 200-unit casual chain that ROI.
used guest-level redemption data and real-time promotion tracking Scott Shaw
to optimize an automated birthday offer. The result was $5 million in Chief Innovation Officer,
incremental sales from the birthday offer. As Shaw says, “They got two Fishbowl
new stores for the price of a week’s worth of testing.”

FISHBOWL is bringing data driven

marketing to the restaurant industry

ACQUISITION

ENGAGEMENT Predictable
INSIGHTS Sales Growth
EXPERTISE

Guest Centric Marketing

10 Restaurant.org/BigData
Getting to know your
customers
B
ig data can help you get to know your audience. What are the de-
mographics of your customers? What are their ages? Income levels?
Where do they live? Do they have kids? What kind of food do they
like? Do they drink wine? Do they have allergies? Where else do they dine
out?
Pairing data from traditional internal sources in your operation with external
input shows the power of big data.
You can build a customer database with email and by “listening” on social
media. Yelp, Urbanspoon, TripAdvisor and Foursquare allow you to see how
you’re doing, and Facebook, Twitter and Instagram are good for engaging
current and prospective guests.
Services like TDn2K’s White Box Social Intelligence combine social
engagement and measurement tools with operational, sales and competitive
data analysis. The service is undergoing testing and isn’t widely available yet.
However, the company’s Black Box Intelligence service, which is available,
can compare your operation to your market and national competitors.
Those types of solutions allow you to analyze and track social mentions of
food, service, ambiance and intent to return. In addition, you can see how
you rate on a restaurant social scoring index, which looks at reviews on lead-
ing social media sites and correlates social media ROI with actual sales data.

Are you measuring the performance

Food for of your marketing campaigns? Do
you know which promotions work?
thought Can you tie your marketing to
specific customer preferences,
menu items, sales and service?
Can you measure the correlation
between menu changes and
profitability?

Are you using data to improve Do you have a way to deliver a

menu items, add new entrées 360-degree view of the customer
or eliminate ones that aren’t to those who need it most? Are
popular? If not, how can you you sharing helpful operations and
better capture customer customer data with your staff so
feedback, suggestions and they can improve? Do you have
monitor social media? buy-in from everyone on your
team?
Do you know what social media
is saying about your restaurant Do you use OpenTable? How are
and other restaurants like yours? you using the data? Are you
How are you tracking it? matching it against your own
customer service software?

Restaurant.org/BigData 11
 Guest-management software can track
Here are a few examples of how which guests drink wine or specialty
restaurants use data drinks, order seafood, enjoy pasta or
have special seating preferences.
Haute Dogs & Fries, a two-unit, quickservice restaurant
The software is one step in a big-data
in Alexandria, Va., leverages social media to connect with
process that can help you note trends
customers. Being small and community-focused allows the
about individual diners. So rather than
operation to quickly identify market trends and make offers
in real-time, says co-owner Lionel Holmes. He monitors social
lumping your regular customers into
media throughout the day and might post a lunch special at groups like “wine lover” or “pasta lover,”
11 a.m. or a dinner offer at 3 p.m. based on what’s trending. you can see that a guest always orders a
“Social media has a pulse and heartbeat,” he says. “It’s per- glass of Malbec or a $79 bottle of Cab-
tinent to today. We like it because it brings us closer to our ernet Sauvignon. You can then begin
core demographics, and it’s immediate.” Haute Dogs & Fries is to customize the dining experience for
on Twitter, Facebook and Instagram and uses email to reach individual guests.
customers and build loyalty. With new customer insight, Florida
Chicago-based Levy’s Restaurants uses big data to University’s Mike Hampton says your
win contracts at stadiums and arenas. Levy’s provides high- managers and team members can
end, restaurant-quality foodservice at 45 major sports venues. optimize the impression of your brand
It uses analytics to better understand the correlation between through suggestive selling and greater
sporting events and food and beverage purchases. It analyzed customer loyalty.
food trends in Portland, Ore., to create a highly successful For example, data tied to your reserva-
10,000-square-foot restaurant near the Trailblazers’ arena.
tion system can provide a sneak peak of
Fig & Olive, a seven-location New York-based restaurant which guests are arriving during upcom-
group, has used guest-management software to track more ing shifts. It can alert chefs and servers
than 500,000 guests and $17.5 million in checks. The restau- to regular or VIP customers. Using guest
rants have been able to customize the dining experience profiles, your servers can subtly suggest
for individual guests and deliver results with targeted email menu choices, celebrate birthdays or
communications. Its recent “we miss you campaign” offered special occasions, or run specials to drive
complimentary crostini to guests who hadn’t dined there in 30 more business.
days. The result: Almost 300 visits and more than $36,000 in The better systems also provide ample
sales, translating into a return of more than seven times the
opportunities to follow up after the
cost of the program. Matthew Joseph, who leads technology
dining experience. For example, you
and information systems for the company, says linking POS
could use email to solicit feedback
data with online reservations, plus monitoring social media
about the meal and service or remind
mentions on Facebook, Twitter or TripAdvisor, helped Fig &
guests about upcoming events that might
Olive create its brand identity and build loyalty.
interest them. Or you might email guests
The software company Venga’s guest management who had positive dining experiences but
system combines dining reservations with point-of-sale data. hadn’t returned in 60 days about a new
By connecting purchases to individual customers, it can build special. The email can be combined
profiles on each guest’s habits and preferences. Restaurants with promotions to generate additional
use the information to increase visit frequency, customer
income.
satisfaction and spending through personalized service and
targeted email campaigns.

12 Restaurant.org/BigData
 The Basics of Big Data
Start small. Don’t let big data nologies, but think about what to build cross-functional data-
overwhelm you. Divide it into you’re going to do with the data collection teams.
bite-sized pieces you can tackle you collect from those channels.
one step at a time. IT and marketing are
No “one-size fits all” converging. Data-driven mar-
Have a goal in mind. What solution. Many big data solu- keting is the new paradigm. Make
problems are you trying to solve? tions are available, but no single sure your IT and marketing teams
Are food costs too high? Are one will solve all of your prob- are working together to drive
there scheduling problems? Do lems. Identify your needs, then information-based decisions.
you want to know which menu find a solution that fits.
items are the most popular? Make the case for big data.
Collect the data that makes the Appoint a chief data Make sure your teams understand
most sense to solve these specific officer. Designate someone in that big data has bottom-line
challenges. your organization to be your data impact on your operation. Buy-in
steward. It could be your IT di- is essential, especially if you are
Don’t get technology-tied. rector or your marketing person, instituting new procedures.
Mobile apps, online ordering and but the person needs to be a silo
table tablets are amazing tech- buster who has your permission

Protecting guests’ privacy

B
ig data comes with big responsibilities. If you gathers, how it’s gathered, how it’s used, who has
collect data about your customers, you have access, whether it’s disclosed to third parties, and
a responsibility to protect that data so it can’t if so, for what purpose. It should be posted on your
later be used for identity theft or other fraud. You website, at a minimum. Your notice should describe
should only collect, use and store guest data in com- how customers can opt out of having their infor-
pliance with applicable laws, regulations and best mation tracked and collected. The opt-out process
practices. should be easy, allowing guests to call a toll-free
Setting standards for protecting customers’ privacy number or send an email.
includes, but isn’t limited to, letting your guests how • Comply with the standards you’ve set. Regularly
their data is being used. You need to give customers audit and refine your privacy policy and notice.
a real choice about whether they want their data • Investigate third parties. If you use third parties to
to be tracked, and let them know that the data you collect or analyze guest data, be sure to ask them
collect is stored and adequately protected. about their data-protection measures and whether
Four steps to take as you set privacy standards: they adhere to applicable laws, regulations and best
• Develop a privacy policy and privacy notice. A practices.
privacy policy is your restaurant’s internal gover- • Understand the law. As data breaches grow more
nance document, designed to guide the people who common, more states are regulating in this area.
handle and manage data collection and analytics in Make sure you know the laws and regulations about
your business. Your policy should outline the steps breaches that cover your customers.
your company will take to respond to customer
Respect for customers’ privacy isn’t just good for
opt-out requests in a timely fashion, for example. It
your business and your reputation. Often, it’s the law.
should spell out how you will inform guests about
Consulting with legal counsel about your obligations
data breaches. A privacy policy is a public statement
will protect both your business and your customers.
that discloses the information your company

Restaurant.org/BigData 13
Loyalty programs yield
new insight
P
airing loyalty-program data with other data is be entered into a POS system, and 29 percent partici-
another powerful combination. pated in a program linked to their smart phones.
For example, Scott Shaw from Fishbowl notes Restaurants can build loyalty programs by tapping
that restaurant chains increasingly use their e-clubs as into social media and leveraging online and in-store
a jumping-off point for more sophisticated programs guest experiences. Reward programs, email clubs, gift
by appending payment and third-party data from programs, comp programs and data insights
providers such as Experian. The results are powerful all drive incremental sales and create guest loyalty.
and actionable guest insights tied to spend, demo- Starting from scratch? Begin by collecting email ad-
graphics and menu preferences. dresses. That information might be available
Loyalty programs are on the rise. A recent study from your online reservation system or OpenTable.
by Technomic and American Express found that 44 You can leave comment cards at the table, collect
percent of consumers participate in loyalty/rewards business cards or simply ask guests if they would like
programs at limited-service restaurants, and about a to receive email about upcoming specials and events.
third have signed up for programs at one or more full You also can gather information from your website
service restaurants. Eight of 10 participants said they through signups and offers. There are many ways
were more likely to frequent a restaurant if they are your marketing team can build an email database.
part of its loyalty program. Sixty-three percent partic- You also might wish to collect birthdays and anniver-
saries for specials and promotions.
ipated in a program that uses a plastic card that can

marketing goes digital

Percentage of restaurant operators who planned to devote more of their resources
to the following marketing methods in 2014
family casual fine FAST
dining dining dining quickservice CASUAL

Traditional
marketing 14% 19% 12% 14% 26%
(such as
direct mail or
newspaper ads)

Electronic
marketing 65% 64% 67% 57% 67%
(such as
email or text
messages)

Social
marketing 62% 72% 74% 68% 73%
(such Facebook
ads or special
offers via Twitter
and Foursquare)

Source: National Restaurant Association, 2014 Restaurant Industry Forecast

14 Restaurant.org/BigData
 case studies
Panera Bread’s MyPanera loyalty program
tracks guest purchases and habits through loyalty cards. Guests
receive rewards for purchases or when the chain develops a
new item similar to previous purchases. The casual-dining chain
is leveraging its behavior data with primary marketing research
and third-party data to guide its brand strategy, drive new cus-
tomer acquisition, retain existing customers and assist in real
estate planning.

Pizza Hut uses guest analytics to capture, leverage

and segment customer data based on purchasing tendencies
and behavioral indicators. In fact, Pizza Hut has created more
than 6,000 customer behavioral groups to predict future
purchases and engage its customers in the channels they
prefer. As a result, the chain has seen a significant rise in
customer retention.

Buca di Beppo is showing the power of

analytics to increase customer spend and drive more
effective new customer acquisition. The key is using payment
and promotional redemption data to create best customer
segments for email marketing. Buca then uses look-alike
profiles to make better online and offline media buying
decisions.

Mobile apps and tabletop

technology unlock
additional insights
M
ajor chains are experimenting with table experience. The added benefit of tabletop technolo-
tablets that allow customers to view menus, gy and mobile applications is the additional custom-
order beverages and dessert, pay the check er insight and data they can yield when deployed
at the table, play games and provide real-time feed- properly.
back. Buffalo Wild Wings is rolling out Buzztime’s Digital ordering systems, such as Olo and EatStreet
BEOND entertainment platform; Chili’s has installed seamlessly sync with your POS, payment provider
Android Ziosk tablets at all of its locations; and and loyalty program to allow customers to order and
Applebee’s is using E la Carte Presto tablets in its pay on mobile devices. Five Guys Burgers and Fries,
U.S. locations. Noodles & Company and Cold Stone Creamery are
The primary benefits of these tabletop technologies some of the companies that use Olo. Papa John’s
are lower table turn times, higher tips for servers, and The Pita Pit have deployed EatStreet.
higher check averages and a better customer

Restaurant.org/BigData 15
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case studies
The web and mobile ordering platform at Five Guys Working with Heartland to implement the Heartland ToGo
has resulted in a 25 percent higher average order size solution, Groucho’s was able to implement a dynamic
than phone orders. The percentage of repeat users has mobile and online solution fully integrated with the exist-
more than quadrupled since the program’s inception, with ing loyalty program. Deploying Heartland ToGo has given
three of four customers returning to place new orders. Groucho’s a throughput boost, with a mobile app that
The order-ahead program gives customers a better ex- now enables customers to personalize their orders ahead
perience when they receive orders faster by skipping the of time, freeing staff to focus on more in-store guests in
line. And Five Guys uses the data gathered through the the process. Early results have been impressive: In the
app to unlock a deeper understanding of its most loyal first three months following the launch, the app download
customers. rate has increased by more than 400 percent.

Groucho’s Deli, a 28-unit delicatessen, wanted to In addition, the new platform provides Groucho’s with
reach its full potential for operational throughput and greater access to a deeper level of customer information
increased sales. Crew members struggled with balanc- than with traditional orders. By combining loyalty and
ing in-store traffic of highly customized sandwich orders order convenience digitally, the company now has insight
with incoming catering requests over the phone. The into a registered user’s purchase history, visit patterns
deli believed it could handle more volume and support and demographics, making it easier to target segmented
after-hours catering sales by turning to digital ordering, groups.
while providing a better customer experience with a
complete ordering and loyalty application.

16 Restaurant.org/BigData
Limitations of big data
Y
ou might have heard the expression, “Garbage
in, garbage out,” with respect to computers.
GIGO applies to big data as well. Muddled
big deals make
data in will mean muddled information out. big data hot
Data quality has become a growing issue, especially
demographic data derived from surveys. For exam- Big data in the hospitality industry is hot right
ple, most restaurants don’t ask their customers’ age. now. Priceline recently announced that it planned
Those that do say customers often leave that ques- to purchase OpenTable for $2.6 billion. Why? It
tion blank. And if they do answer, there’s no way to wanted more data on consumer behavior and to
tell whether guests state their correct age. Paytronix better understand what is driving purchasing
found that parents often don’t say whether they have decisions in the restaurant/hospitality space.
children, yet they are a key demographic group with
decidedly different needs and expectations than An even bigger deal, at $5.3 billion, is Oracle’s de-
guests without children. cision to buy Micros Systems, the sales, customer
So be careful about verifying the quality of data you service and inventory software maker
use. How trustworthy is it? Where does it come from? for restaurants, hotels and retail stores. Micros
itself has shifted in recent years from producing
Are there intermediary steps before it arrives at your
computer-based sales systems to mobile
restaurant?
systems that operate on the cloud, giving
Understand, too, the difference between reporting restaurants real-time access to data.
and analyzing data. A simple spreadsheet report or
data dump isn’t the same as advanced analytics that
allow data to be queried and sorted in ways not avail-
able in a table or report. Make sure you use your data
to its fullest potential.

What are you waiting for?

B
ig data isn’t just for tech giants like Google
and Amazon. Restaurants can take advantage
of sophisticated analytical tools that just a few
years ago were out of reach for all but the largest
companies. With increased competition and grow-
ing demand for personalized service, you owe it to
yourself and your operation to explore your big data
options. At the very least, you’ll discover a wealth of
information to explore and draw insights from.

Restaurant.org/BigData 17
Big data
grocery chains long have mined
4
checklist customer data from loyalty cards
to determine buying habits and
Determine your goals,
and identify the type of data you
need. Are you revenue-driven?
trends.
Food-driven? If your goal is to
reduce costs, streamline oper-
4 Find out whether all ations or better manage your
your systems “talk to staff, you might be interested in
each other.” Your restau- inventory control, supply chain
Big data equals big opportuni- rant is a complex ecosystem of management or scheduling solu-
ties for your restaurant. Ideally, software and networks. POS tions. If you’re more interested in
this guide has given you some registers, self-order kiosks, food trends, menu options and
ideas and gotten your creative kitchen-management systems, improving the customer expe-
juices flowing. So now what? online reservation systems and rience, your focus probably will
Here are some suggestions to websites all generate log files. be on social media, customer
delve deeper into big data: You need a way to organize demographics and dining-out
and query that data. Matthew trends. You might need to invest
4 Talk to your POS
4

Joseph, director of technolo- in different solutions, depending

vendor. Find out whether gy and information systems at on your goals.
you’re getting all the information Fig & Olive, says that the “next
readily available from the data big step” in data analytics for
you collect. Your POS system restaurants is to figure out how 4 Take advantage of
should be able to help you iden- to bring together these dispa- apps like Food Genius,
tify which menu items are most rate information sources. “What which track millions of menu
popular, which marketing efforts good is all that data if you can’t items in different regions and
show positive results, and which make sense of it?” he asks. identify dining trends to predict
guests use incentive and reward the popularity of a new dish.
programs. Most systems also can
store names, addresses, tele- 4 Avoid drowning in too
phone numbers and emails that much data, Rob Bailey, CEO 4 Recognize that even
of DataSift, cautions in a Forbes the smallest operations
guests provide when ordering
magazine blog. “Enterprises can benefit from big data
online.
need to define a focused strate- solutions. But size them to fit
gy and identify exactly the data your operation and budget. You
4 Take the time to care- they need, rather than trying to might be able to do some analy-
fully categorize food and sis yourself or without spending
analyze everything. For those
beverage items in your POS a lot on new software.
that are able to do this, valuable
system. To get the most from
insights await,” he says.
your POS data, you’ll need to
properly assign your inventory
to the correct departments and
4 Look for software
that can integrate
categories. Be as specific as
unstructured data with
possible.
traditional, structured data
sources. The ability to monitor
4 Evaluate what your customer review sites, blogs,
payments processor may forums and social media sites
have to offer. You may be will give you insights about
surprised at the amount of data customers, products and
it has about your guests. Infor- competitors. From online
mation may be available about surveys and feedback streams,
purchases at other restaurants you can determine if menu
and retailers, as well as de- items need to be improved or
mographic data. For example, changed.

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