How AI Is Changing POS Systems for Food and Beverage Businesses

Artificial intelligence (AI) is poised to transform the restaurant industry significantly over the next few years. Restaurant point of sale (POS) systems are already rolling out new AI-enabled features to enhance the customer experience, streamline operations and boost revenue.

Now, more than 80% of restaurant owners say they plan to increase their investment in AI in the year ahead.

This shift is expected to lead to rapid digital transformation — and businesses that don’t adapt face being left behind. To help you prepare, we’ll dive deep into AI in restaurants and explain the potential benefits, use cases and risks of this new technology.

AI in Restaurants: A Growing Trend

Survey after survey of restaurant owners return the same message about AI — it’s here now.

• 63% of major restaurant chains are already using AI daily to enhance their customer experience, while 26% more are piloting AI software.
• 33% of restaurants, from fast-casual to fine dining establishments, plan to implement AI for personalized marketing. 31% plan to implement AI for inventory and purchasing management.
• More than 90% of table-service restaurants are piloting AI for online guest support and voice ordering.

Consumers are also coming to expect AI in their restaurant experience—50% of fast-food restaurant customers are comfortable placing their order with an AI bot.

Furthermore, the industry is becoming increasingly crowded with success stories from major restaurant chains, which have been among the earliest adopters of AI. For example, IHOP is using AI to recommend menu items to its customers and has seen its average check size grow more than 10%.

They’re not the only ones, either. Wendy’s is using AI at its drive-thru locations and has cut ordering times by an average of 22 seconds.

These examples show the potential of AI to enhance the customer experience while boosting revenue. With early results like these, it’s no surprise that restaurants of all sizes — including small, single-location businesses — are thinking about ways to incorporate AI.

How Restaurants Are Using AI in POS Systems

There are many ways restaurants can leverage AI. We’ll highlight several applications already being piloted that could be rolled out much more widely in the next few years.

Voice ordering

Mix-ups and back-and-forth when ordering over the phone or at a drive-thru have long been frustrating for customers. Now, AI is changing that by making voice ordering faster and more accurate.

We mentioned Wendy’s above, which has implemented voice AI for its restaurants at thousands of drive-thru locations. Taco Bell, Pizza Hut and KFC are all piloting similar systems at their drive-thrus.

In addition, Domino’s Pizza has rolled out an AI phone answering system for its restaurants. The virtual assistant, nicknamed Dom, can also engage in casual conversation with customers to make the ordering experience feel more authentic and increase the likelihood of upselling.

Dynamic menu pricing

Restaurants are also using AI to dynamically change their menu prices in response to demand, inventory and even the time of day. For example, AI can increase the price of an item when inventory is low, or charge higher prices for the same menu items during dinner hours compared with lunch hours.

It can also be used to discount items that aren’t selling well or to offer an automated happy hour during slow periods.

A survey by restaurant POS provider Toast found that only a small number of restaurants are using dynamic pricing right now, but 70% of surveyed owners say they’re looking at implementing it soon. Wendy’s announced plans to experiment with dynamic pricing as soon as this year.

Marketing

AI-powered marketing for restaurants has enormous potential, particularly due to the emergence of generative AI tools that can create original images and videos in seconds. Many small, independent restaurants that lack the budget for professional marketing campaigns are using AI to create signage, online ads and content for their social media channels.

Generative AI can also be used to quickly create personalized email campaigns, helping keep customers engaged with your business. According to one survey, 33% of restaurants are planning on personalizing their marketing efforts with AI.

Smart staffing and operational efficiency

Another powerful application of AI tools for restaurants involves predictive forecasting. Restaurants can use AI training techniques to analyze traffic patterns and determine when it’s likely to be busy. You can then use this data to create staff schedules, ensuring you have plenty of staff when needed and fewer when business is slow.

Fast-casual chain Chili’s offers a great example of how this kind of AI can work for quick-service restaurants. The company deployed AI to enhance its staffing model, saving 600 labor hours per week without reducing service levels. This is good for the company’s bottom line as well as for staff, who stand to make more from tips during low-volume periods.

Look for AI employee scheduling software for restaurants to roll out more widely in the near future.

Current AI-Powered POS Providers

Many small- and medium-sized restaurants are likely to encounter AI first through their POS. That’s because many of AI’s most promising applications enhance existing POS features, like menu pricing and recommendations.

Let’s take a closer look at a few examples of restaurant POS systems that are implementing AI.

SpotOn

SpotOn has been at the forefront of putting AI in the hands of restaurant owners. First, it introduced generative AI tools to automate social media marketing, reducing the time restaurateurs need to spend creating content. It then incorporated AI into its financial analysis dashboard, giving users the ability to estimate profit and loss automatically.

Most recently, SpotOn rolled out personalized menu recommendations for online and mobile customers.

Toast

Toast is another one of the best cloud-based AI platforms for restaurants. It offers a customer support AI chatbot for restaurants and an AI-powered marketing hub that lets you create and send personalized emails in minutes. Toast is also incorporating AI into its analysis dashboard, using benchmarking to identify opportunities for revenue growth — for example, by adjusting business hours or offering additional menu items.

Square

Square has focused on using AI to increase operational efficiency in restaurants. It automatically categorizes incoming orders and sends them to different display screens in your kitchen, making it easier for staff to prioritize certain dishes and reduce wait times. It can also generate menus and item descriptions instantly, saving you hours of work every time your menu changes.

Lightspeed

Lightspeed POS uses AI to highlight high- and low-performing menu items and offer tips for your front-of-house staff to boost order sizes. It also streamlines the process of creating menus by generating item descriptions automatically and auto-translating your menu into multiple languages.

Risks of Using AI in Restaurants

While there are clear benefits to using AI solutions for restaurants, business owners need to tread carefully.

AI is expected to generate enormous volumes of customer data and restaurants need to be very careful about how they manage it. Already, 50% of consumers have expressed concerns about privacy issues related to AI ordering. A data leak could permanently cloud a restaurant’s reputation.

In addition, AI ordering isn’t perfect — 39% of consumers say they wouldn’t trust AI to handle their food allergies or dietary restrictions. McDonald’s recently stopped using AI for drive-thru ordering after encountering issues with order accuracy.

Lastly, AI features in POS systems are likely to become expensive once they’re rolled out more widely. Business owners need to weigh the potential increase in revenue they could see against the higher software cost and other risks.

Practical Tips: How To Start Using AI in Your Restaurant

While large restaurant chains have led the way in deploying AI, small- and medium-sized restaurants can also use AI today. Here are a few tips to help you get started.

• Identify the highest-impact AI use case: Think about how your restaurant could benefit most from AI, such as through marketing, upselling or better forecasting. Pick one of these use cases to focus on first, rather than trying to deploy multiple AI tools at once.
• Evaluate your POS capabilities: Your POS may already offer AI-enabled tools you can use to achieve your goals. If it doesn’t, consider switching to an alternative restaurant POS with more features.
• Start with a pilot program: Roll out AI in a small-scale, controlled manner with plenty of human oversight. If you’re using AI tools in a customer-facing setting, like for voice ordering, let customers know that AI is being used and give them the option to speak with human staff.
• Develop strong data privacy measures: Make sure you have a plan in place for how you’ll secure and manage any customer data you collect. You should also review your state’s data privacy regulations to ensure your data collection is fully compliant.
• Track your results: Identify quantifiable metrics to measure whether your AI tool is having an impact on your business. For example, if you use AI to recommend menu items, you can track whether customers are ordering the recommended items and whether revenue is going up.