A New Industry Frontier: Data Analysis & Ethics

​Guest Blog | Togather Restaurant Consulting

Many people assume that you must be a coder, data analyst, or a tech-savvy professional to collect and use data. Data can be an overwhelming concept, especially when presented with unfamiliar and intimidating terminology. However, when presented correctly, we can view data analytics in a more accessible and understandable way. The current buzz about data and how it is changing business is worth listening to; it is transforming the job market, being used by every technological platform, and is changing the world of business as we know it.

In the hospitality industry, we can break data down into operational and guest data. Operational data includes any data collected by your POS, turnover time, inventory, menu trends, cost of goods, labor reports, and staff performance metrics. Guest data includes customer behaviors, wants & needs, contact info, and demographics. These can be analyzed to uncover patterns, trends, and associations in your operations.

Many people know that their data is sourced from their POS, but operators can also collect data from their loyalty programs, inventory & waste management, kitchen display systems, and other new technology that track restaurant metrics.

But, when you have this data, what do you do with it? In order to recognize and dissect patterns, you need to have it in a structure that is easily analyzed. We call this “data transformation:” taking data, and turning it into an optimized product for business use. But not to fear, we’ve reached a point where your technology does the work for you. Remember to ask your POS representatives the big question – “what can my POS do with the data points it is collecting?” Take a peek at the charts, graphics, summaries, and percentages calculated through your technology.

Only 45% of small business owners analyze their data (airSlate). Analysis doesn’t mean logging in once a month to check your sales and labor numbers. Analysis involves asking the right questions for what you want to know. You must think like a scientist to create hypotheses, but you don’t have to have a Ph.D. to do so. Some examples of questions that data can answer are as follows:

• What menu offerings are most popular based on seasonality?
• Which server is driving the most revenue per hour?
• What marketing tactics drive the highest walk-through rate?
• What is the average lead time for each dish in the kitchen? How does that affect customer satisfaction?

If you can ask these questions and test solutions you will see benefits across your operation. In your marketing, decision-making, revenue, efficiencies, and customer behavior, you will have a competitive advantage. When used the right way, numbers rarely lie.

By 2025, data will be embedded into every decision process in terms of restaurant success. Jobs in the field are expected to grow by 25% by 2026. Restaurants that use big data have 8-10% increased profits, 17% increase in productivity, and improved their products or services by 12%. (PopMenu). If you are in the 55% of operators that aren’t using it to your advantage, now is the time to learn - don’t get behind with data!

Hold your horses though - if we use data, we must ensure that we are ethical about our collection and usage. As the holder of people’s data, you must ask: How are you collecting, protecting, and applying it?

In terms of ethics, your answers should align with four principles:

1. Empathy. Would customers return to the restaurant if you were honest about how you are collecting and using their data?
2. Transparency. Does the consumer understand how I am using and collecting their data?
3. Accountability. Is their data safe and secure?
4. Equity. Are my decisions fair and unbiased?

If the answers are ‘yes’ and the first answer aligns with how you would want your data to be treated, then proceed! If you are using a platform or raw data in a way that you cannot answer ‘yes’ to those questions – you may want to step back and consider if you are providing honest service to your customers. After all, we are the hospitality industry.

As we step forward into the future, we mustn’t let ourselves get bogged down by the learning curve. While it can seem daunting, there are resources available. Data answers a lot of the questions that business owners face. However, data collection is pointless without transformation. We must transform our raw data values into something tangible – something that changes how we do business. Otherwise, our research is useless. We can cultivate a competitive edge if we stay in stride with this rapidly-evolving technological industry. Above all else, we must ensure that our data-driven decisions are ethical and build towards profitability. | Anna Janke and edited by Kate Ratledge, Togather Restaurant Consulting

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This guest blog was submitted by Togather Restaurant Consulting. For more information on guest blog opportunities, contact Marla McColly, Business Development Director, Oregon Restaurant & Lodging Association.