Are you considering adopting new tech to better manage labor costs? Looking to California might provide some examples of how it can be done. The state’s recent decision to raise the minimum wage for quick-service restaurant workers to $20 has reopened discussions about how technology might be used to automate or streamline restaurant tasks, according to a recent report from Restaurant Technology News. It said the California Restaurant Association has confirmed that some restaurant operators are either deciding against expansion or are closing stores as a result of the decision. Even if you’re not dealing with a mandated wage increase in your state, you’ve likely been considering how to weave new technology into your business to operate more efficiently. Research from the National Restaurant Association found that nearly half of the restaurants they surveyed plan to use technology and automation to manage labor shortages. One-quarter of respondents said they plan to use self-ordering and payment kiosks specifically. Beyond labor, the National Restaurant Association’s survey found that operators’ top priorities for technology spending this year include digital and location-based marketing; loyalty and reward systems; back-office technologies that help operators manage food safety compliance, tax compliance and finance; inventory control and management; and point-of-sale systems.

Artificial intelligence is demonstrating its ability to tap into consumer cravings – and to help restaurants generate more sales as a result. One recent example is IHOP, whose online sales have gotten a significant boost recently with some help from AI. Last year, the brand launched an AI recommendation engine on its website. The platform, which was trained on the brand’s historical order data using machine learning, suggests menu items based on what a customer has already put in their cart. The response to date has been enthusiastic – and profitable. According to a Restaurant Business report about the change, 73 percent of customers who see a recommendation on their order add one to their cart, and IHOP’s digital check average has climbed 10 percent in the year since the feature launched, including menu price inflation. Adopting the AI platform wasn’t an overnight process: IHOP conducted testing with live customers, placing the tool in just 15 stores before expanding it incrementally until it was in use at all of the brand’s roughly 1,700 U.S. locations. During testing, they wanted to make sure customers weren’t turned off by the recommendations and abandoning their carts. They also had legal hurdles to clear regarding how the new platform would be using and storing data. But so far, the investment has been worthwhile – and perhaps one to watch if you’re considering a similar platform. Justin Skelton, CIO of IHOP parent company Dine Brands, said their platform, which they purchased from a vendor after considering building it in-house, costs IHOP just $1 for every $60 it generates.