Joey is rushing home after work on a Thursday. The babysitter is coming at 7pm, and she will need some dinner too. Joey and her husband were supposed to catch a 7:45pm movie and they had agreed to grab a bite before the movie. But now, it’s looking like it’ll be best if Joey just order delivery for everyone. If she puts in an order now, the food, the babysitter, her, and her husband will all arrive at the house around the same time. Everyone will have some food in their stomach before the evening comes. While waiting for her train, Joey enters her phone number, email address, and home address and orders food from her corner diner restaurant. What dish will the app recommend for this hectic evening, having no information of Joey’s prior food ordering history, nor her personal associations?
Future Role of Artificial Intelligence (A.I.) in Restaurant and Food Industry
There are two areas where AI can be leveraged when it comes to the food and restaurant industry; essentially, AI can assist customers choose food items and then reduce the time and cost for the transport of those food items. For example, our protagonist Joey, she is about to complete her profile for a food delivery app she just signed up for. Without prior ordering history, the AI system, like a virtual assistant, can give Joey recommendations based on an aggregate of customer profiles that resemble Joey’s, as well as the when and where of Joey’s purchase. The advantage of using AI here is that once there are tens of thousands of consumer interactions, the system can gather insights and patterns to determine recommendations that “work” (given high take-rate to purchase, or high cart value) and those that don’t.
Another area where AI can be a game-changer when it comes to food and restaurant is logistics. Logistics is not just about delivery drones and robotic vehicles. Automation enabled by advanced algorithms have the potential to greatly cut delivery cost, through resolving communication inefficiencies at all stages of a delivery. In the delivery of fresh or hot food, customers expect to be notified and kept update with regards to their food order, both on the food-making front and on the driver’s front. The more the customer is up to date with his or her order, the lower the possibility of customer dissatisfaction and number of non-delivery, and hence reducing the costs of customer services over all.
Bias in A.I.: What Is to Be Blamed?
Countless incidents in recent years have prompted heated debates over bias in AI, especially when it comes to facial recognition software. Most of these stories revolve around how AI systems “unbaisely” reflect the worst prejudice and discrimination latent in our society. The industry has gradually worked towards re-training the data models given these the public outcries. But, what is really to be blamed here?
All AI systems, large or small, begin with a steam of dataset. There is nothing wrong intrinsically with mining the dataset in order to find correlations and patterns within. The problem occurs when what the data shows and then enacts is counterproductive for the very problem we are trying to tackle with the software. Another step to be taken in order to fix this problem lies in re-examining our own cognitive bias while creating the algorithm and interpreting the data output.
Helping Mom-And-Pop Shops Survive Using A.I.
When it comes to adopting cutting-edge technologies, local retails may have the upper hand, compared to large companies, which are extremely slow to change. However, this only applies to technologies that have the highest likelihood to enlist broader retail adoption; meaning, the mom-and-pop shops needs to be able to see an immediate, direct, and hard-line return on investing in these new technologies. An example of such a success is the adoption of payment gateway system—think “modern” point-of-sale systems such as PayPal or Square. These systems have leveraged fraud detection algorithms to protect customer transactions.
PayPal’s deep learning approach is able to promote transaction security by lowering the average fraud rate by one percentage point, to 0.32%. This translates to a saving of $20K a year for a restaurant that sees $2M in revenue annually, for simply switching to a new gateway system—that’s enough savings for being able to buy a new car every year!
The promise of AI in the future of retail is not to be overlooked. With technology such as Pathover’s logistics software, a mom-and-pop shop could reduce delivery costs by 6-10%, through simply switching a logistics vendor. Delivery costs for any order, regardless of the order amount size, can be as high as $20. Using advanced logistics software alone, the costs can be reduced to as low as $4. Given the convenience factor and as the demand for food delivery grows within the Millennial demographics, there are few restaurant ordering and delivery solutions that can compete with Mixbowl, Pathover’s all-in-one ordering and delivery software.
AI-powered commerce and logistics software Mixbowl significantly lowers the cost of food delivery for restaurants that makes it an obvious decision for consumers to order directly from restaurants and for restaurants to participate directly in the growing food ordering market.
For a restaurant that receives about three hundred online orders monthly, Pathover’s smart software Mixbowl delivers a savings of $56K. That’s enough savings to buy two brand new cars every single year, just by switching to the right delivery partner and software solution!
Customers like Joey also sees a lowered, or even waived, delivery fee. The advantage of logistics software is more pronounced for mom-and-pop shops because the savings represent a higher overall percentage of take-home profit, where bottom line is critical to the very survival of their shop.
At the end of the day, even though AI is revealing and amplifying some of society’s not-so-shiny biases and worst impulses, the very mechanism has the potential to greatly optimize prices and reduce costs through smart logistics and recommendations that work. It remains to be seen how would these unresolved issues around AI biases affect mom-and-pop shops that are using AI-powered software.