Internet connectivity has become the backbone of modern restaurant operations in the digital age. Nearly every aspect of a restaurant’s functionality relies on a stable Internet connection. But what happens when this critical lifeline is disrupted?
Internet outages can have far-reaching consequences that ripple through a restaurant’s daily operations. Even a short-lived internet outage can result in significant setbacks, and the higher the average order value, the more costly the downtime.
By understanding these challenges and taking the appropriate steps to address them, restaurant operators can better prepare for and mitigate the effects of connectivity issues, ensuring smoother operations and sustained customer satisfaction despite unforeseen technical difficulties.
The critical role of Internet connectivity
Internet connectivity is crucial in modern restaurant operations, impacting various aspects that contribute to efficiency, customer satisfaction, and overall business success. Here are some of the key areas where connectivity plays a major role:
Point-of-sale (POS) systems
Many of today’s POS platforms are cloud-based, which means that in many cases, without connectivity, orders must be written by hand. Anyone who’s ever worked in a restaurant under those conditions knows what a disaster it can be. Some systems can temporarily operate in offline mode, but functionality may be limited.
Payment card processing
No connectivity means a restaurant needs to go cash-only or accept payment cards without them being approved. In today’s environment, accepting cash-only orders is equivalent to no orders at all. Some systems approve all card payments in offline mode, but if those cards are later declined, the restaurant eats the loss.
Online ordering and delivery services
Statistics compiled by Zippia.com indicate online food ordering has grown 300% faster than dine-in over the past 10 years. In some cases, it accounts for nearly half of a restaurant’s sales. And if telephone service goes down as well, customers have no way to call the restaurant directly. Additionally, the COVID-19 pandemic cemented the role of third-party delivery services in restaurant operations, with the average American spending $67 per week on food delivery. No connectivity means that revenue is lost.
Inventory management and supplier communications
Many restaurant systems track inventory and automatically order food and supplies based on sales. Without connectivity, orders must be compiled by and called into vendors. As a result, a manager may end up spending a significant part of their day either in the stockroom with a clipboard or sitting in the office on the phone instead of in the front of the house, ensuring guests have an outstanding experience.
Customer loyalty programs and digital marketing
Without connectivity, customers will miss out on loyalty program benefits such as tracking points, rewards, and personalized promotions. Additionally, operators won’t have access to the customer data that helps them improve operations and boost sales.
Customer wi-fi services
Offering free Wi-Fi to customers enhances their dining experience and encourages longer visits, which can translate to increased revenue. Salespeople, business travelers, and remote workers often rely on a restaurant’s Wi-Fi service to do their jobs. Not being able to offer Wi-Fi means those customers will go somewhere else.
Security systems
Most, if not all, security systems rely on telephone services or Internet connectivity to perform their duties. Without those connections, a restaurant is completely unprotected.
Staff morale
The decrease in staff morale as a result of having to deal with the chaotic conditions will lead to higher turnover and the added cost it brings. The Cornell Hospitality Report estimates that turnover costs a restaurant around $5,864 per employee.
Long-term brand damage
Internet outages can have a variety of impacts on a restaurant, but ultimately, the main effect of an Internet outage is on customer satisfaction and the brand’s reputation. Increased wait times due to the manual processing of orders and payments will likely result in long lines and potentially drive customers away. There’s also a higher likelihood of errors in order taking and processing when relying on manual systems, further adding to a customer’s frustration. Those who depend on a restaurant’s Wi-Fi to work while they eat will be disappointed as well.
And it won’t take long for word of customers’ experiences to spread via social media, leading to further erosion of brand trust and loyalty.
Adopting a mitigation strategy
Most vendors that provide connectivity solutions promise that if one fails, the system can switch to another. But in that case, if it all comes from the same provider, chances are that if one goes down, they all go down.
And many offer a 99% minimum uptime guarantee. Unfortunately, 99% does not equal 100%, and even 1% downtime will cost the restaurant money and increase risk. The only sure strategy to avoid downtime disasters is to work with an internet solution provider that guarantees uninterrupted uptime.
The SmartCONNECT solution offered by Milagro, for example, guarantees zero downtime by bundling a variety of service providers into a single solution. The all-in-one connectivity solution provides primary internet, backup internet, managed firewall, Wi-Fi, and phone service.
When there is an outage on the primary Internet, SmartCONNECT switches service to a secondary connection within seconds, meaning businesses will not be impacted by the outage. When the primary Internet service is restored, SmartCONNECT will monitor the connection for 5 minutes to ensure the connection is healthy and then switches back to the primary connection again. The SmartCONNECT solution is fully automated and PCI-compliant.
Milagro offers nationwide service and proactive support. Businesses don’t need to deal with multiple carriers across the country, instead working with one company, one team, and one bill. Even if the firewall fails, a switch fails, or even wireless access points fail, Milagro’s fully redundant system provides multiple paths for traffic so that data can keep flowing even in the event of a failure. The internet stays up, and the business continues to run smoothly, no matter what.
A wide variety of top brands already rely on Milagro for their connectivity.
“We worked with other vendors,” said Chuck Zieseniss, Director of Corporate Operations & Supply Chain with Dallas-based Cowboy Chicken, which operates 18 locations in Texas, Georgia, Florida, Louisiana, and Oklahoma.
“The backup systems weren’t consistent with keeping us online at all times,” Zieseniss said. “The communication from other vendors was also lacking which caused an awareness delay in resolving the outages.”
Sandwich powerhouse Jimmy John’s depends on Milagro as well. “I have everything I need from Milagro under one monthly bill, PCI compliance with auditing and verification included, as well as Internet/Backup LTE, and phone lines,” said Jimmy John’s franchisee, Dan Texter.
“I haven’t had any outages related to the internet since switching to Milagro, across all six locations!”
Choosing the correct solution
The long-term financial impacts of internet outages on restaurants can be substantial, affecting everything from customer loyalty to operational efficiency. Lost revenue, diminished customer trust, and increased operational costs can collectively threaten the sustainability of any dining establishment. The cascading effects of these disruptions underscore the critical need for reliable technological infrastructure and robust contingency plans to safeguard against such setbacks.
Partnering with a solution provider such as Milagro can be a game-changer for restaurants looking to mitigate these risks. By leveraging Milagro’s expertise and innovative tools, restaurants can protect their revenue streams, maintain customer satisfaction, and build resilience against future disruptions, securing a stable and prosperous future in an increasingly digital world.
A look at the numbers
Most connectivity providers guarantee 99% uptime.
What does that really mean?
Here’s the breakdown:
• A restaurant operating from 6 a.m. to 10 p.m. seven days a week, 363 days a year, is open for 5,808 hours over the course of a year.
• One percent of 5,808 is 58 hours.
• Assuming annual sales of $2.5 million, a typical restaurant averages slightly more than $430/hr. in sales.
• Assuming lost sales reduces average hourly sales by half, a 1% downtime equates to $12,470 in direct lost sales for the year.
• Add to that the reduced profits, increased turnover, and long-term brand damage, a 1% downtime can have an annual impact in the tens of thousands of dollars.
As originally published on fastcasual.com.
