How 2021 Changed the Restaurant Industry

For restaurants, 2021 has brought many ups and downs with COVID-19, mounting supply chain challenges, rapidly evolving customer ordering behaviors, and a constant labor crunch. But for restaurant owners in the United States,  uncertainty in the industry and the need to survive financially have led them to innovate like never before, adopting a patchwork of technology tools to provide customers with experiences they’ll remember inside and outside the dining room.

From the start of the COVID-19 pandemic, Square has been focused on providing the tools, resources, and technologies that restaurants need to meet the challenges they face daily. We’ve pivoted to prioritize product updates and features to help restaurants grow their revenues, work more efficiently, manage their employees better, and create a customer experience that builds loyalty and community.

As the general manager of Square for Restaurants, who grew up surrounded by aunts, uncles, and grandparents who owned restaurants, I’ve seen firsthand how these last few years have changed the restaurant industry. 

Pivoting and innovating to grow revenue 

Restaurateurs are known for their grit, and it’s no surprise that the industry has pivoted to continue to provide great food and service to their customers, all while knowing they might have to pivot again tomorrow. At Square we focused on making sure we had the solutions that restaurants needed fast. 

Pickup and delivery options quickly became a vital source of revenue for many restaurants at the beginning of the pandemic, and in 2021 they remained a top ordering channel. To support the influx of orders that came through online ordering channels, which was brand new for many restaurants, Square launched a handful of new features this year.

  • Increasing discovery: We integrated with Google to help customers discover and order from your restaurant directly from search results. 
  • Recommended items: To grow your check sizes, we recommended additional items from your menu to customers who ordered from your Square Online site.
  • Alcohol delivery (where permitted): We expanded on-demand delivery to include capabilities that offer alcohol delivery where it’s legally permitted. 

Embracing new technology 

This past year brought a stronger emphasis on embracing new technology and modernizing restaurant systems, both for the back and the front of house. With labor in short supply and operational complexity increasing, 2021 was all about teams working smarter and doing more with less. 

QR codes quickly gained popularity among restaurant owners and customers for their ability to provide an easy and touchless ordering and payment option. To maximize the benefits of using self-serve ordering, we added features to keep tabs open, helping to grow ticket sizes, to increase staff tips, and to expand awareness of your menu. 

Another emphasis for restaurants this past year was on how to use technology to build and strengthen customer relationships. Customers are the lifeblood of restaurants, but often it feels as if restaurants are only able to glean bits and pieces of who their customers are. New tools help restaurants recognize who their regular customers are, which customers churned and why, and how customers experience the restaurant overall. This unlocks opportunities for restaurants to build a larger loyal customer base and launch new revenue streams that will appeal to customers. Square Loyalty can be synced with Square for Restaurants, which makes it easy to engage and reward diners after every interaction they have with your business.  

Working more efficiently 

The influx of new channels this past year brought with it a need for more efficiency and streamlined operations. With orders coming in across online ordering hubs, QR codes, and tableside, the need for all orders to run through a centralized system became paramount. That’s where a Kitchen Display System (KDS) can help. We identified and prioritized restaurants’ top needs and implemented new features to our KDS system, including the ability to control the order in which tickets show up, 86’d items, recall items and tickets, and print directly from the KDS.

There is also a stronger need to process orders faster as more restaurants take on an omnichannel strategy. To make in-person ordering easier, Square for Restaurants added new features that simplifies order mapping by grouping stations together, such as bar, dining room, and patio. For online channels we focused on how to simplify the online ordering experience on mobile devices. We also enabled more options to sync across online and in-person menus. 

Finally, given that many restaurants use multiple technology providers to run their operations, we expanded the ecosystem of apps that work seamlessly with Square for Restaurants to simplify your life. You can now connect your Square account with leading solutions from ItsaCheckmate, Groupon, Otter, Menufy, GRUBBRR, MarginEdge, OrderUp, Tapin2, and more.

Prioritizing and managing staff 

This year it became even more clear that a happy and motivated team is key to running a successful restaurant. To help staff feel that your business is investing in them, we built a number of features that make your team’s day-to-day easier. Here are ways you can provide support to you employees through streamlined technology solutions:

  • Easier tip calculation: Quickly and efficiently counting tips is a big priority for staff. Square Team Management gives restaurants the ability to automate tip calculation and distribution and make this a more accurate and painless process.
  • Pay staff faster: Employees rightfully do not want to wait a long time for their paychecks to be processed, and in some instances they prefer to access their earned income prior to the end of a pay period. In most states qualifying W-2 employees paid through Square Payroll choose to access up to 50% of their earned income (max $200 per pay period) before the pay period ends.  Providing this capability to your employees can be helpful to them and support employee retention and hiring. 
  • Transparent time off: A self-service time-off request process gives employees more control over their schedules and eliminates concern over not finding the right time to approach managers to make in-person requests. Operationally, when employees make their requests directly in the Square Team app, managers can streamline their administrative work, review all requests, and accept or reject them from Square Dashboard. 

Taking care of your team means taking care of your managers too. Square Payroll can ease the administrative work of managers and will calculate the business and employee taxes for employees, now across multiple locations, including employees who work from home. To support hiring efforts we partnered with Checkr so that you can access an all-in-one employee background check solution.

Looking ahead

2022 is just around the corner, and we expect another busy year, as outlined in the Square Future of Restaurants report. Some of the trends I see emerging include:

  • Restaurants will run more as hybrids: In the future we may see restaurants’ physical footprints evolve for the larger amount of revenue that’s going to come from off-premise sales. This means that kitchen sizes will potentially take up more of the overall space and that online ordering will become critical to a restaurant’s bottom line.
  • Staffing costs will rise: Staffing continues to be a number one challenge. As the states continue to push up minimum wages and demand for restaurant staff continues to be robust, restaurants may need to compensate front-of-house and back-of-house staff more and provide benefits that have not been ubiquitous historically. This means that the labor cost for restaurants will go up and that restaurants will need to find ways to operate with more efficient labor. This is where we believe restaurants can lean on tech to help them utilize their existing staffs better, to manage their labor costs, and to maintain exceptional customer experiences.
  • Technology will become even more of a differentiator: Technology is becoming a customer experience differentiator in the restaurant space. In the future we may see large companies continue to be at the forefront of technology, creating highly efficient, innovative, and delightful experiences for their customers. These experiences will reshape customer expectations across the space. It will be critical in the future that tech companies invest heavily to democratize similar technologies on behalf of independent and mid-size chains to ensure that all restaurants are able to offer similar experiences to their customers. Without this there is a chance that those technology-unlocked experiences will act as a strategic moat between the big chains and the independent restaurants.

Thanks to your feedback, we’ve already started work on features you’ve asked for. If you have a feature you’d like to see us work in, head to our Seller Community and keep an eye on what’s to come in 2022.