QR codes have replaced restaurant menus. Industry experts say it’s not a fad

The coronavirus pandemic led to the immediate, widespread use of QR codes, but restaurant industry experts believe the technology will last long after the health crisis ends.

Invented in 1994 by a Japanese engineer to make it easier to keep an eye on auto parts, fast response codes came into the mainstream years later when smartphones with cameras gained the upper hand. But it wasn’t until the ongoing pandemic forced companies to double up on disinfection that they became a ubiquitous sight in U.S. bars and restaurants, replacing physical menus.

Bitly, a link management service, said the number of QR code downloads has increased 750% over the past 18 months. Bitly President Raleigh Harbor said restaurants have recognized the value of technology beyond touchless service.

“They are able to quickly adjust their menu choices to take into account factors such as inflation, fluctuations in food and commodity prices, and other variables,” said Harbor.

According to the Bureau of Labor Statistics, food out-of-home prices rose 0.8% in July and rose 4.6% over the past 12 months. The raw material prices for important goods such as coffee and pigs have risen sharply this year. Restaurants have also raised prices after wages were raised to attract workers.

Bottlenecks are another problem for restaurant owners. Chicken wings, burger patties and tequila are among the items that have been difficult for operators to source due to supply chain issues related to the pandemic.

A QR code also gives restaurants more information about their customers. Reservation services such as OpenTable, SevenRooms and Resy provide data on who made the booking to restaurants – but not to everyone else at the table.

“If you run a restaurant that doesn’t take reservations, you don’t know who your guest is until they pay,” said Bo Peabody, co-founder and chairman of Seated, a restaurant booking service that rewards diners for certain diners. “With the QR code, you may be able to find out who this guest is right for when they sit down.”

Peabody also owns the Mezze Restaurant in Massachusetts, sits on the board of directors of the Boqueria Restaurant Group, and is a Venture Partner at Greycroft, where he invests in restaurant technology. Mezze and all Boqueria restaurants used QR codes instead of menus during the pandemic, according to Peabody.

Experts in restaurant technology see even more possibilities in QR codes than just physical menus. The pandemic has sparked a boom in restaurant ordering online, and industry experts predict the change will continue too. The switch to QR codes is helping to enable online orders on site instead of just being tied to delivery and pick-up transactions.

Noah Glass, CEO of digital ordering platform Olo, told analysts on the company’s earnings call that on-premise digital transactions accounted for 1% of total industry transactions for the first time. The shift is due to both QR codes and the rise of self-ordering kiosks.

“This is a big step in an industry that is doing 60 billion transactions in a typical year, so 1% move to digital on-premise,” said Glass.

Using Olo or the Toast point-of-sale service, for example, a QR code can direct customers to a link for ordering and paying on the phone, even in full-service restaurants.

“This allows restaurants with fewer staff to operate more efficiently – something our customers find an integral part of their operations as restaurants across the country face staff shortages,” said Chris Comparato, CEO of Toast.

Peabody suggested that QR codes could allow restaurants to track past orders from customers so that diners can easily reorder the next time they visit, like the features of third-party ordering platforms like Grubhub and Doordash.

“Bringing all that stuff into the restaurant is the promise of digital connection with the guest, which certainly starts with the QR code,” says Peabody.

Seated started offering additional rewards to its users for scanning the QR code and filling out the contact tracking form. These rewards can be applied to gift cards or balances with providers such as Uber or Starbucks.

“Even if you don’t have contract tracking, it can give you an incentive to just get something interesting and familiarize yourself with using a QR code menu,” said Peabody.

Restaurants can also implement QR code payments on receipts so customers can pay without pulling out a credit card or cash, Comparato said. It’s both more convenient for customers and quicker for waiters, so restaurants can seat more customers by turning the table faster.

However, QR codes are not the answer for all restaurants. Some reverted to physical menus just as easily as removing plexiglass barriers between tables when states began lifting restrictions in late spring and early summer of this year. Darren Seifer, food and beverage analyst at The NPD Group, said upscale restaurants are less willing to replace their menus or ordering process with QR codes.

“I see some hesitation in some of the finer restaurants because it’s not as classy as getting the check at the end of the meal,” said Seifer.

Dine Brands, the parent company of IHOP and Applebee’s, plans to offer customers both options.

“People have different levels of digital comfort,” said CEO John Peyton. “Some people will prefer and enjoy the QR code and using the phone, and others will prefer the traditional menu.”

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