The vast majority of restaurants today are using a cloud-based POS (point of sale). There’s a good chance your restaurant is among them. As Market Growth Reports tell us, 78% of restaurants around the world are using a cloud-based POS system. That’s up from 42% in 2018.
If you aren’t part of this trend, you should probably get in touch with us ASAP. Why? Because your competitors are already running their operations with modern restaurant management software, and it comes with some pretty huge competitive advantages, especially when it comes to restaurant data analytics.
Toast is a perfect example. The POS industry leader continues to add new features, functions and applications designed to help its users better manage, understand, and act on their own data. And these capabilities are expanding all the time, especially with the addition of AI-powered data tools.
We wanted the inside scoop on everything that’s happening, so we caught up with Toast Product Marketing Manager Catherine Ferrera. Here’s what we learned.
The Data You Should Be Getting From Your POS
Obviously you know that you can get all kinds of valuable data and insights from an all-in-one cloud-based POS system like Toast. You’re probably already using plenty of these data points to run your business. But do you know just how deep and wide this pool of data actually goes?
Catherine gave us a comprehensive look at what’s available. It turns out there’s way more than meets the eye inside of the leading restaurant POS systems. She highlighted some of the valuable data points that restaurants can now collect using a cloud-based POS system.
1. Sales and Menu Performance
Take a deeper look at the overall performance of your menu as well as the sales of individual items with these key data points:
- Net sales
- Top sellers
- Category mix
- Modifier trends
Catherine explains, “Operators can use these figures to re-engineer menus, which might mean 86-ing low performers, repricing high-margin dishes, or bundling popular items into combos.”
2. Labor Efficiency
Your POS system is also great at compiling important data points about labor performance in your restaurant, including:
- Sales per labor hour
- Check throughput
- Prep times by kitchen station
“These data points can help owners and operators optimize shift schedules by matching historical volume patterns and cutting unnecessary labor cost while keeping peak rushes covered,” Catherine points out.
3. Guest Behavior and Channels
Your POS system is also tracking all kinds of data on your customers including:
- Average check size
- Dine-in vs. takeout/delivery mix
- Visit frequency
- Guest lifetime spend
“This collection of data can help you surface high-value regulars for targeted campaigns,” Catherine explained. “It also shows which channels are working and therefore worth doubling down on.”
4. Inventory and Costing
A lot of restaurant operators also rely on their POS system for inventory management, either through an inventory add-on feature or by integrating directly with a full stand-alone inventory management system. Either approach should give you access to these key data points.
- Real-time item depletion
- Recipe costing
- Waste tracking
Catherine tells us that these tools are especially useful for “catching inventory leakage early and reducing waste on high-cost perishables.”
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Reporting and Insights
You may be an expert at running your restaurant. But that doesn’t mean you’re necessarily an expert on making sense of all the data points above. Fortunately, the leading restaurant management software systems now back this data with a full kit of accessible, user-friendly restaurant data analytics tools.
These increasingly advanced restaurant data analytics tools make it a lot easier to understand exactly what you’re looking at and how you can use it to make better business decisions. Catherine outlined just a few of the support tools that Toast provides to help users make the most out of their data.
1. Sales Reports
“In short,” Catherine explains, “Toast provides a variety of established reports to answer the basic question – ‘What happened?’”
That’s because your sales data is backed by an array of support tools including:
- Sales summary
- Sales breakdown report
- Sales analytics report (which incorporates historical sales trends and top numbers)
With Toast, you can also build your own customized sales reports based on the areas that you’re most interested in learning more about.
2. Action Tools
“You can take things to the next level with a variety of action tools,” Catherine tells us. “These tools can help you turn insight into change. And depending on permissions and the modules you decide to use, Toast can often let you act immediately after you learn something.”
Common action items include:
- Menu updates, such as changes to prices, item descriptions, and availability
- Scheduling and labor actions, including publishing schedules and adjusting shifts
- Marketing oversight, including creating email/SMS drafts as well as monitoring and adjusting marketing campaigns
“These action tools,” Catherine notes, “mark the difference between ‘we noticed it’ and ‘we did something about it.’”
3. Enhanced Forecasting
“Advanced sales projections can also provide you with a forward-looking forecast,” Catherine told us. “You can dig into these restaurant data analytics to see what might happen in the future based on recent trends.”
Using patterns in your historical sales data, you can take a look at:
- Projected net sales (within a set time range)
- Projected order volume
- Displayed confidence level in forecasts
These forecasts can be invaluable for making decisions about everything from how many workers to schedule for a happy hour shift to how much beef you should purchase on your next inventory order.
Gathering Data From the Market Around You
Now that we’ve talked about leveraging internal data using restaurant POS systems, let’s talk a bit about the external data. It’s important to understand what’s happening in the market around you. But what kinds of external data points should you be paying attention to? And how can you use these data points to inform key business decisions?
Catherine offered us a few insights.
1. Menu Pricing
“One effective way to understand what’s happening around you is to compare your item prices against local peer benchmarks,” Catherine tells us. “For example, with the Toast Benchmarking feature, operators can adjust prices to protect their margins without running the risk of pricing themselves out of the market.”
2. Customer Outreach and Marketing
Catherine points out that this external data can also be used to understand customer behavior in your local market. She explains, “If peer data shows a regional surge in digital or takeout orders, operators can lean into the Toast Online Ordering System and Toast Advertising solution to reach nearby demand.”
3. Operational Optimization
It’s also a good idea to see how your labor is performing relative to other restaurants in your market. This can give you a better sense of how efficiently (or inefficiently) your operation is running.
Catherine points out, “Comparing turn times and labor productivity against local averages can help you pinpoint where your bottlenecks are coming from, whether it’s kitchen prep, handheld POS device usage, or menu complexity.”
Adding AI Data Tools Into the Mix
As we pointed out at the beginning of our conversation, modern restaurant POS systems are constantly expanding their capabilities. Developments in AI have obviously played a major role in these advancements. Toast, for example, recently introduced Toast IQ, an AI-powered tool designed to help restaurants better understand and use their data.
“Toast IQ is Toast's built-in conversational AI assistant for restaurants,” Catherine explains. “That means you can ask questions in plain language like ‘What were my sales yesterday?’ or ‘What's my labor cost breakdown by job?’ and it can pull easy-to-understand answers straight from your own POS data.”
Toast IQ can answer everyday questions about your operation, sales, payroll, taxes, menu performance, and much more. It can also provide visual insights like charts and graphs to help answer these questions. But there’s more to it than that.
Turning AI Insights Into Automated Action
“Beyond just answering,” says Catherine, “Toast IQ can also take action directly from the chat, like 86-ing a menu item or adjusting stock, so you don't have to jump between reports and settings to get things done.
“And because it's built into the platform,” Catherine explains, “operators can act on those insights immediately by doing things like adjusting staffing, updating menus, and running promotions — all without ever leaving the chat.”
Turning Tech and Data Into Operational Improvements
That kind of automation is a perfect demonstration of the unprecedented power we now have at our fingertips. All-in-one restaurant POS systems are giving us more insight into and control over our data than ever before. This, in turn, is giving us more power over our own profitability.
As Catherine acknowledges, “Operating costs and processing fees are top of mind for every operator. But Toast isn't designed to be another line-item expense. It's built to be the operational foundation that helps a restaurant get busy, stay busy, and run busy.”
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