Artificial intelligence is the wave of the future, with companies like SpaceX and OpenAi pursuing trillion-dollar valuations, and 1 billion active monthly users for ChatGPT. However, when it comes to restaurants, there seems to be a breakwater between them and the wave of the future, with companies like Starbucks and McDonald’s experiencing setbacks with their AI implementations.
Starbucks abandoned its AI inventory counting system after less than nine months, while McDonald’s eased up on voice AI testing in 2024. Pizza Hut’s AI order management system allegedly cost one franchisee $100 million in sales. Restaurant tech executives have cautioned against expecting AI to solve too many problems, highlighting the need for a more thoughtful approach.
According to Oliver Ostertag, president of growth and AI at Par Technology, a restaurant tech company, the technology’s continued maturation and its ability to integrate a wide range of restaurant data matter more than finding individual tasks for which the tech is especially suited. Ostertag emphasized that use case is important, but it’s really a question of whether or not the technology is enterprise-grade, whether it’s proven, and how deep the data is.
Ostertag noted that new technology being used at enterprise scale is really hard, and that’s why some high-profile AI implementations in restaurants have failed. However, if AI tooling is sitting on really deep data and understands inventory, labor, and sales, it can be very performant. Ostertag highlighted the importance of platform-based technologies that cover point of sale, payments, back-office functionality, and engagement products.
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These platforms understand the full operations of a restaurant, in-store and above-store, and can provide great results with AI. Ostertag explained that AI agents can work on top of existing platforms to provide analytics, insights, and automatic promotions. For instance, an offers agent can set up promotions to optimize based on what inventory a restaurant carries, while a fraud agent can proactively identify where a restaurant is losing cash.
Ostertag also noted that the easiest application of AI will always be on the back-office side, where it can help with tasks such as inventory management and labor scheduling.
In the middle of the conversation, it becomes clear that the key to successful AI implementation in restaurants lies in the ability to integrate a wide range of data and provide a unified tech stack. This allows restaurants to make data-driven decisions and automate certain actions, making the operator smarter and more efficient.
Ostertag doesn’t think AI will replace people operating within restaurants, as hospitality still depends on having a great brand experience. Instead, AI can make an operator more performant and able to engage better with customers.
Par Technology’s restaurant-facing AI product is built on Amazon Web Services, which has done a great job with the launch of AWS Bedrock. Ostertag emphasized the importance of having partners that run an integrated platform-based strategy, and that the size of the data set is not as important as having a unified tech stack. Looking ahead, Ostertag expects to see an improvement in same-store sales and margins for restaurants that have context equity and are able to automate certain actions.
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One of Par Technology’s big partners is Burger King, which is using their point-of-sale and back-office products. Ostertag noted that Burger King is winning in the market, with improving margins and same-store sales, and has made a major capital investment into their technology. Ostertag believes that AI has the power to launch new innovations and create jobs, rather than displacing human talent. They are using AI to optimize their restaurant operations and improve customer experience.
Restaurant companies like Burger King are investing heavily in AI technology to improve their operations and stay competitive in the market. They are using AI to analyze customer data and preferences, and to optimize their menu and pricing strategies. This allows them to make data-driven decisions and stay ahead of the competition.
Ostertag emphasized that the key to successful AI implementation is to have a unified tech stack and to be able to integrate a wide range of data. This allows restaurants to make data-driven decisions and automate certain actions, making the operator smarter and more efficient. They are using AI to improve their inventory management and labor scheduling, and to optimize their customer experience.
The use of AI in restaurants is still in its early stages, but it has the potential to transform the industry. Restaurants like Burger King are already seeing improvements in their operations and customer experience, and they are expected to continue to invest in AI technology in the future. As the technology continues to mature, we can expect to see even more innovative applications of AI in the restaurant industry.