Technological innovations in the age of digital technology have had a profound impact on various business sectors in Iraq, with one of the foremost and perhaps most notable being the restaurant sector. This sector has been undergoing significant transformations recently with the advent of technology, which not only aimed to facilitate people’s lives but, at times, resulted in the exclusion of many popular restaurants from the commercial scene.

These digital transformations present restaurants with two options: either quickly adapt to the changes or face the risk of exclusion. The use of delivery apps and online ordering technologies is among the developments that many customers have become accustomed to, making it something difficult to do without. However, on the flip side, it has placed an additional burden on many owners of popular restaurants.

The goal of this article is to shed light on the impact of technology in the exclusion of some popular restaurants. It also reveals the challenges these restaurants face and the opportunities that may open up for them, even in the absence of delving into the world of advanced technology.

Challenges:

The challenges facing popular restaurants due to the lack of technology can be summarized as follows:

1. Popular restaurants in Iraq face several challenges in light of the increasing prevalence of delivery applications. Customers prefer to order food quickly and easily without the need to leave their homes or workplaces. The lack of technology adoption by popular restaurants creates unprecedented competitive pressures, given the fact that customers lean toward methods that provide them with a lot of convenience and comfort.
2.   Using delivery applications is not only a mean of transporting food but also a powerful marketing tool. They serve as an effective marketing platform, allowing restaurants to reach a wide range of customers who seek a dining experience at home or in the office. Restaurants can leverage these platforms to showcase their menu and attract the attention of new customers, given the fact that they have replaced traditional TV commercials or social media advertising, providing an easy way for customers to navigate and choose from a variety of restaurants through the use of the application.
3. Activating the discount system and enticing promotional offers for consumers through the application. This has led to the emergence of new challenges in the form of catchy discounts on those platforms which works on motivating customers to place an order. We do not deny that these discounts have impacted consumer behavior and created a growing need.
4. Popular restaurants in Iraq face a significant challenge in the absence of electronic payment options. The lack of these methods as an available option is a problem that hinders the customer experience and reduces the restaurant’s effectiveness in keeping up with technological developments, especially with the widespread reliance on technology by many restaurants, whether within the restaurant itself or through delivery applications.

Electronic payment methods have become increasingly important, especially after the COVID-19 pandemic, where the use these methods was promoted to reduce social contact. The absence of such an option can be a barrier for customers who prefer electronic payment over cash.

These challenges impact the opportunities for expansion and growth for restaurants. Popular restaurant owners must consider adopting new and effective methods to enhance the customer experience, meet their expectations, and maintain the sustainability of these restaurants, especially in a world where the use of technology is rapidly accelerating.

Opportunities:

Despite the widespread adoption of technology by modern and forward-thinking restaurants, traditional popular restaurants that do not heavily rely on this technology still have valuable opportunities, such as:

1. Popular restaurants in Iraq serve as vital social and cultural hubs, allowing expatriates and foreigners to enjoy tasting food and exploring the rich heritage of Iraqi cuisine in a unique way, filled with memories and cultural experiences.
2.  Popular restaurants that do not heavily rely on technology may benefit by offering lower prices, which can be a strong attraction for a wide range of customers, including students and families with limited incomes. This approach enhances customer loyalty and contributes to business success.
3.   The absence of marketing or aesthetic (decor) costs is considered a significant opportunity for popular restaurants. Not needing to invest large amounts in online ordering systems or advanced technology can have a positive impact on the total cost of the restaurant.
4.  Popular restaurants distancing themselves from areas dominated by technology is an additional advantage as it keeps them away from intense competition and contributes to their sustainability.

In these ways, popular restaurants that avoid heavy reliance on technology can still take advantage of opportunities in the food market and offer a distinctive experience characterized by authenticity and affordability.

Suggestions:

There are several suggestions that can be offered to owners of popular restaurants in Iraq who are not willing to use technology. These suggestions may enhance their performance and attract more customers. Here are some ideas:

1. Classic Marketing: Utilize traditional marketing methods such as signage, distributing flyers, or local advertising. Approximately 50% of popular restaurants rely on classic marketing, with signage being the most common method.
2.  Extended Operating Hours: Consider extending operating hours to include 24/7 service. Currently, only about 5% of popular restaurants operate 24 hours a day.
3.   Embrace Authenticity: Popular restaurants can find opportunities by distancing themselves from technology and focusing on the cultural and social value of the dining experience. Emphasizing cultural authenticity can be appealing to customers seeking a genuine and human interaction.

Expectations:

There are several expectations regarding the future of non-technology-dependent popular restaurants in Iraq, as follows:

1. By 2025, the number of non-technology-dependent popular restaurants is expected to decrease by 30%, posing challenges to the sustainability of these establishments. Currently, this type of restaurants constitutes 60% of the restaurant landscape in Iraq.
2. In the next 2-5 years, several hybrid restaurants with an old-fashioned popular heritage are anticipated to emerge, aligning with technological advancements in the restaurant sector. This development will create a new category of restaurants competing with both traditional and modern popular restaurants, and it will also attract a new segment of the audience.
3. By the year 2025, non-technology-dependent popular restaurants may face increased competition, particularly in their traditional strongholds, as new restaurants and agencies relying on modern technological advancements gradually encroach into these areas

To conclude, it is evident that there are challenges and implications affecting this sector. While relying on traditional methods may carry cultural and historical values, it comes with negative impacts in an era where business operations have evolved, and many customers prefer modern experiences. These impacts include missed opportunities to improve efficiency, expand the customer base, and integrate with technological advancements. In the face of increasing competition and changing customer preferences, it may be necessary for owners of popular restaurants in Iraq to exert more effort to excel, attract customers, and consider exploring some simplified technological solutions that align with their cultural identity to achieve a balance between preserving traditions and meeting evolving market expectations.

This article was written by Data Ship, the leading and specialized market research services provider in the private sector in Iraq, based on market research and surveys conducted as follows:

1. 3000 samples from restaurants.
2. 1000 surveys with restaurant audiences.
3. 300 surveys with restaurant owners.

Article authors:

Abdullah Ahmed

Executive Director of Data Ship

Marwa Obeid

Article Managerither side.