TGI Fridays’ quest to reinvent happy hour (and itself) with chatbots and IoT

To return to relevancy in an increasingly digital world, the casual dining chain is developing chatbots and experimenting with bar-top tablets, personalized TV services and other IoT technologies to lure more millennials to its restaurants.

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Quinn Dombrowski (CC BY-SA 2.0)

You've been on the road all day when a reprieve comes from your smartphone in the form of a ping from the local TGI Fridays, inviting you to pop in for half-price happy hour cocktails. Wearily, you coax your car there and go straight to the bar, hop on a stool and punch in your cocktail order on the tablet interface flashing on the bar top. An electronic coaster with your name appears, assuring you that your drink won't be confused with someone else's as the corporate crowd steadily swells.

You use your smartphone to take a picture of a TV, which funnels the sound from the baseball game playing on it through your smartphone, granting you your own personal viewing experience. You kick back and wait for your beverage. Life is good and about to get better.

None of the 900-plus TGI Fridays worldwide offer these services yet but they may in the near future if Sherif Mityas has his way. The TGI Fridays CIO and vice president for strategy and brand initiatives is testing those technologies and more in a mock restaurant that serves as a launching pad for digital tools that could redefine casual dining in a world where more millennials cook at home or order from quick-service chains. Fridays must find a way to instill more loyalty among smartphone-toting consumers.

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"How do you take that in the digital world, where people aren’t talking as much but they’re definitely looking at their phones, and walking around and they're socially integrated virtually and digitally," Mityas told CIO.com at the CIO 100 conference in Colorado Springs last week. "How does Fridays play in that world and be part of the consideration set that Fridays is cool again and connected to me? And are they the place I want to eat somewhere and have a drink or stay home and have it delivered? That’s the next frontier for us."

Chatbots: Personalized convenience

Fridays and its casual dining rivals have been racing to see what digital services will resonate. Since Mityas started at Fridays more than a year ago, the company has launched a mobile app that allows consumers to order online, pay at the table, and collect points for purchases and redeem them for rewards.

It also joined the latest craze in conversational messaging: chatbots. Working with chatbot specialist Conversable, the company has rolled out chatbots on Facebook Messenger and Twitter, with a chatbot built for Amazon Echo slated for launch in October. And for folks who love to order on the go and hands-free, a voice-based chatbot designed for General Motors' OnStar in-car service is on tap for November. “We’ve been doing all of these things, adding functionality to continue to be where our guests are and where their eyeballs are," Mityas says.

These capabilities are supported by a the Microsoft Dynamics CRM system, which collects the transaction data, as well as artificial intelligence and machine learning software that helps inform personalized recommendations based on customers' behavior and purchase history. As AI and ML technologies improve, brands will "push" offers at consumers rather than require them to "pull" services by initiating requests via text or voice. Fridays has already seen this work with some success.

Take a consumer who has purchased a meal from Fridays the previous week. Using in-app messaging capabilities from Urban Airship, Fridays can issue an offer to let the consumer make the same order in a check-out cart, which the consumer can approve with a single button, or opt to modify. Mityas says the experiment has yielded a click-through rate of 70 percent. "It's new and convenient and it gets people to re-engage with us," Mityas says.

The happy hour’s digital future

But what about those hip bar-top tablets, electronic coasters, self-service TV and other potential internet of things (IoT) scenarios to help Fridays inject more digital into its restaurants?

Fridays is rigorously testing those capabilities and others in its mock restaurant/digital lab. For example, one experiment uses proximity to lure customers to a restaurant location. For example, if Fridays' knows that a customer in the loyalty rewards program is on the way, it can trigger an order for their favorite drink, which will be waiting for them when they arrive. Holographic displays may one day be on the menu after Mityas previewed technology that enables consumers to pull a hologram of a football game from the air and put it down on the bar-top tablet for a closer viewing.

These emerging technologies raise important user experience questions: How will bar-top tech weather persistent booze spilled on the bar? As for the self-service TV solution, the idea of dozens of patrons piping in audio through their phones to watch games lends itself to potential problems. Fans blasting TV broadcasts through their phones will irritate fellow patrons while headphones-strapped guests may put a damper on the Fridays happy hour ethos. "Let's hope it doesn't go that way," Mityas says, adding that his vendor partners are working to ensure a good user experience.

Innovation begets ‘anticipatory IT’

Most companies would bucket such work under innovation. But it also underscores what can best be described as an "anticipatory IT organization." In tapping emerging technologies and services, Mityas is peering around the corners, intent on predicting what services will drum up interest among fickle consumers' and ultimately improve business outcomes.

Anticipatory IT is a philosophy perpetuated by futurist and author Daniel Burrus, who articulated his thesis at CIO 100. He says that companies must do a better job of releasing products and services that cement customers' trust in their brand. "It's about being anticipatory rather than reactionary," Burrus says. "If you change your mindset you change your results."

It’s a tough time to be a causal dining brand, as Fridays, Ruby Tuesday, and Applebee's have suffered sales slumps and closed dozens of restaurants of late. Former Buffalo Wild Wings CEO Sally Smith recently wrote to shareholders in what was effectively her retirement letter: "Millennial consumers are more attracted than their elders to cooking at home, ordering delivery from restaurants, and eating quickly, in fast-casual or quick-serve restaurants."

Fridays may be better positioned because Mityas has already learned the painful lesson of disintermediation. As the president and CEO of Hollywood Video parent Movie Gallery from 2008 to 2010, Mityas had a front-row seat as Netflix, and, later, other streaming video services such as Amazon Instant Video and Hulu pushed Movie Gallery and Blockbuster out of business.

That’s a big reason why Mityas is urgently testing any digital services that could give Fridays that surprise and delight factor to rise above the rest. He knows that chatbots won't cut it at a time when chains are rolling them out en masse. Fridays' board of directors is on board with his digital experiments because they see where the industry is going if it doesn’t drive change.

“Casual dining is video rental — it’s under attack from all fronts and you have to differentiate and be relevant again and be part of consideration set," Mityas says. “For today’s guests that means digital.”

Mityas has some advice for CIOs undergoing similar challenges: Give your staff more accountability and freedom to work. “I told them, I need you to own X and Y. As you give people more freedom, more rope, almost enough to hang themselves and enough to pull them back, amazing things happen.”

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