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Why settle for dinner for two when you can share a meal with 200 of your closest Facebook friends? New socially-oriented restaurant applications have opened up a whole new dimension to dining out, and it could be a game-changer for restaurants and users alike.
Driven by improvements in cloud-based technology and competition from Facebook Graph, new web and mobile food applications have quickly spring up to change the way people interact with their meals.
OpenTable, a San Francisco-based online restaurant reservation company, is at the forefront of new programs to help move meals back to their “natural social state.” Having facilitated over 400 million restaurant and diner reservations, the company is now looking for ways to make thoughts about meal choices a lot more social.
In late February, OpenTable launched Places I’ve Eaten, a free Facebook application that asks users to share their restaurant wish lists, history and recommendations. Those who join the application gain access in turn to their friend’s data about where —and with whom— they have eaten.
Scott Jampol, Vice President of Consumer Marketing at OpenTable, says he has always seen dining as an inherently social activity. “There is so much that happens around the dining table with friends, family, life events. When you think about what experiences you’ve had, dining is involved in some of the most important ones,” he said.
OpenTable, Jampol said, is really interested in exploring “what role we can play in those conversations.”
Propelled by rapid growth in the number of smartphone users worldwide and the innovation possibilities fueled by cloud computing technology, OpenTable executives say they plan to continue to focus on making restaurant selection more personal for users.
“I would say the leading priority, personalization, socials or rich content are all in the kind of the umbrella of a better diner experience,” OpenTable Chief Executive Officer Matt Roberts said in the company’s February fourth quarter earnings call.
“This cloud-based architecture is absolutely a game-changer for our restaurants going forward,” Roberts said, adding that the new technology would allow restaurants to have much more insight into their customer base and into metrics around their business.
To this end, OpenTable also recently acquired Foodspotting, a social media start-up that incorporates user-generated food images into their interface.
And while it may be a big player in the industry, OpenTable is far from the only company looking to invest in food chatter. Companies like Yelp, UrbanSpoon and restaurant.com all offer customers ways to publish, share, and display their dining habits.
Jim Brock, the founder of PrivacyChoice, a Santa Cruz company dedicated to promoting transparency in consumer privacy, said Facebook’s new Graph Search may be fueling this trend. Graph Search is the social network’s new search engine, which allows users to look up things like places, check-ins, and other users.
In his view, the social media giant’s new function can drive commercial interest in food applications. “If OpenTable can get their data about my dining history into my TimeLine, Graph Search will pick up those entries when other people are looking for restaurants,” Brock wrote in an e-mail interview.
Graph Search may also compete directly with sites like Yelp and OpenTable, since a user could bypass the sites and search for friends’ restaurant preferences directly through the Graph Search function. The race for market share, in light of this, may continue to accelerate.
While data is not yet available about the demographics of Places I’ve Eaten users, it’s likely to spread more quickly in the Valley, where people are more willing to adopt new applications. “Technology usage is rampant here and people are interested in how apps can help them with their lives,” Jampol said.
Angelica Pappas, communications manager of the California Restaurant Association, agreed that companies like OpenTable make a great effort to market to California restaurants. “Generally they are on the forefront of new trends: food trends, tech trends,” she said. “California tends to be a couple steps ahead.”
While users may relish new opportunities for food discovery, applications tracking people’s dining habits, preferences, and other personal information can pose privacy risks.
Brock warned that social dining applications can pass on personal data in ways users might not expect. OpenTable generally has a relatively protective privacy framework that prevents the transfer of personal data without the user’s explicit consent. But Places I’ve Eaten adds each dining experience to a user’s timeline, automatically making it visible to a user’s friends unless they disable the function.
Second, Brock said, the application asks for information about users’ birthdays and their friends’ birthdays. “Most people don’t understand that I can share information like my friends list and their birthdays with apps, even if the friends don’t know that’s happening,” he said.
While many of these functions can be disabled, it’s important for users to be aware of their implications. Other sites that require real-time data sharing can pose greater privacy risks, since they expose a person’s location before they’ve even had a chance to leave.
In response, sites like PrivacyChoice have emerged to offer users customized privacy control services which shed light on how their data is used in a given application.
And while new technologies can aggravate privacy concerns, this type of information-gathering is nothing new in the restaurant industry. With or without the use of restaurant applications, many large restaurants gather a wealth of information about their clients in order to promote customer loyalty.
“Bigger companies are for sure paying attention to customer trends— what they order, how often they come in, if they come in on birthdays or special occasions,” said Pappas. If restaurants do start using data mined from these applications, she views it as a “natural extension” of the existing information-gathering process.
“Any company with a loyalty program is asking for a certain segment of information from customers,” she said. This could include a person’s name, email address, anniversary, and any number of data points they want to capture. “They have a lot of sensitive information.”
While Pappas says the average restaurant has a zero tolerance policy for waiters sharing information, data confidentiality policies can vary from restaurant to restaurant.
For now, there is no end in sight to the expansion of food applications. Looking forward, Jampol says OpenTable considers expansion in three key areas.
First, before people dine, in what he calls the “discovery phase,” the company wants to help people decide where to go. This is where users can leverage their friends’ experiences to select a restaurant. Through Places I’ve Eaten, users can sometimes see a map of all the places a given friend has dined, and what they thought of the meal.
Second, Jampol said, OpenTable considers what they can do “during the dining experience,” including facilitating social interaction and data-sharing to help users figure out what to order, where their friends are, and how far they are from a given restaurant.
“Foodspotting is a great example of how socially- contributed content can help with decision-making,” he said, referring to the recently acquired company’s database of user-generated food images.
Finally, companies like OpenTable look at ways to share and “memorialize” the dining experience, helping people reflect on their experiences through things like reviews.
In response to these new technologies, the restaurant industry has been forced to change how it thinks of its employees and marketing efforts. Owners and employees now have to worry about a whole lot more than just a great signature dish. Today, they’re expected to be much more technologically savvy.
“There’s a whole piece of social media monitoring now that was never really a factor before,” Pappas said. With the emergence of new technology, restaurants are carefully reviewing their online presence.
“Marketing is a two-way street now,” she said. “You can’t just push messages out or buy ads. You’re also taking in a huge swath of suggestions, responses, and criticism.”
For bigger restaurants and chains, it’s not uncommon to employ a social media manager to track feedback for every location and region, including Yelp reviews and Facebook activities.
Meanwhile, she said, smaller companies have to be more selective about what they have the bandwidth to do.
The online social dimension of restaurant applications also means that restaurants have to rethink every aspect of their business, starting from their very first day of operation.
“Social media in general is a game-changer for the restaurant industry because there’s no time for a learning curve at all,” Pappas explained. In the past, when a new restaurant opened they had a few weeks or months to work out the kinks. “They could open their doors and still be working out bugs,” she recalled.
Now, the first day a restaurant opens, Pappas said it expects reviews online. “It’s totally changed the way the restaurant industry approaches how they open a new location and customer service in general,” she said. “They know there’s potential for a lot of public scrutiny.”
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