Is the restaurant industry approaching the tipping point for self-service applications? This question presents itself after several national foodservice chains announced plans to continue, and accelerate, consumer activated kiosk and tablet installations. The term “tipping point” is defined as the point in time where competing companies decide they have to invest to remain competitive. While pinpointing the exact timetable is difficult, most experts agree the pace of adoption is indicative of progressive actions of deployment.
Of significance is the rising level of consumer acceptance of self-service technology. In fact, self-ordering kiosks are now more popular in quick service and fast casual restaurants than at any time in the past. McDonald’s, Wendy’s, Long John Silver’s, Johnny Rockets, Wow Bao and Eatsa are all on board. Additionally, several independent eateries are also considering a self-order entry system. Unassisted industry implementations require a high standard of quality and clarity. As a growing number of foodservice companies engage in pilot testing and near-future rollouts, the benefits and challenges of self-service apps need to be identified.
Customer response positive
Research indicates that most customers prefer self-service devices to waiting in line or at a table for service, often by an unmotivated staffer. Restaurant self-service devices, akin to an ATM for foodservice, enable consumers to serve themselves by viewing a digital menu, placing an order, customizing the order as necessary and completing payment. It’s no secret that many of the largest foodservice operating companies have successfully moved forward with in-store, self-serve kiosks and digital menu tablets. Industry practitioners recognize the importance of integrating self-serve apps with mobile ordering, point-of-sale systems and back-end software to produce a seamless customer experience. In addition, many restaurants are implementing digital messaging on screens that integrate with loyalty programming.
Chains began experimenting with self-service technology in 2014, and the initial and continued customer feedback has been positive, leading more restauranteurs to consider implementing self-serve ordering. Research indicates that consumers have extremely high expectations for restaurant applications.
Restaurant versus consumer expectations
Kiosks, tablets, websites, mobile apps and other self-service technologies enable a streamlined process capable of reducing overhead while increasing revenue at the same time providing consumers more control over the production/service process. Despite successful outcomes, there often are substantial differences between managers’ and consumers’ perspectives of self-service technologies. In a recent study, MIT Sloan researchers found manager and consumer ideals vary along three broad spectrums: interactivity, convenience and speed.
Interactivity. Self-service technologies are often implemented with the expectation that customers want to use them. Research indicates that often customers are hesitant to use a new self-service technology, especially if it departs from traditional processes. Managers tend to significantly underestimate the need for consumer-employee interaction during a self-service experience. Findings suggest consumers prefer to have a safety net in case of failure (i.e., an employee standing by).
Convenience. Contrasts between managers and customers is apparent in the importance placed on convenience. A primary reason that customers choose self-service is the belief that it will provide more convenience; which often means the customer controls how and when interactions occur. Consumers consider that the convenience of a self-service application significantly affects the accuracy of the transaction. By contrast, managers tend to rate the influence of convenience as significantly less important than accuracy. Hence, for consumers self-service technology plays a major role in satisfaction, comfort and confidence.
Speed. The desirability of speed of transaction was found to be inconsistent among managers and consumers. While speed of transaction had the strongest influence on consumer satisfaction, managers tended to rate transaction speed as significantly less important.
These contrasting perspectives of self-service technologies are capable of impacting the success of an implementation and perhaps help explain why some self-service applications may not be as successful as envisioned.
Implementation issues
Industry experts have identified four trends leading to increased restaurant adoption, including: 1. technological immersion, 2. communication channeling, 3. customer empowerment and 4. digital messaging.
Technological immersion. Domestically, more than 80 percent of residents have internet access and possess a smartphone, tablet, and/or personal computer. Connectivity is a critical requirement for users to conduct transactions and interactions. Where and how technology is integrated into the restaurant experience is becoming increasingly important as consumers express higher levels of demand and greater expectations.
Communication channeling. A recent Gallup study on electronic devices found that texting, cellphones, email and social media were the most commonly used modes of communication. The trend towards more text-based and online communication appears to have influence over the way the restaurant industry interacts with its clientele and potential clientele.
Customer empowerment. Technology enables businesses in nearly every industry to provide customized experiences. The trend toward individualization and customer empowerment increases as the capabilities of technical devices increases.
Digital messaging. The use of self-service kiosks/tablets for wedding registries, job applications, price checking and online ordering is now commonplace. A technology-enabled restaurant experience begins when a customer places an order, settles the transaction and earns loyalty points through an in-store kiosk. Such integration has proven to positively benefit the eatery’s bottom line.
Device considerations
A self-service device should enable impulse ordering and upselling as the system provides attractive promotions through digital messaging (e.g., photos and graphics). In addition to traditional restaurant operations, kiosks may also be strategically placed in stadiums, arenas, theme parks, airports and cafes.
Following are device considerations for restaurant kiosks.
1. Coordinate kiosk/tablet design with restaurant décor and outlet theme.
2. Enable impactful promotions via high definition digital messaging.
3. Provide consumer empowerment through lead-through programming.
4. Optimize operations through integration with an installed POS system.
5. Utilize a connected payment gateway with PCI-DSS compliance.
6. Increase consumer reach through the use of flexible language options.
Device integration
Given that restaurants rely on an effective point-of-sale system, it is imperative that integration with a kiosk/tablet device be handled properly. In general, POS kiosk integration centers on three critical functionalities:
1. Integration with sales data from the kiosk/tablet to the restaurant’s POS sales database to create an aggregated reporting system. Additionally, this data must remain available/separable for independent kiosk/tablet analytics as well as maintaining data redundancy.
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2. Integration with relevant back-end systems, including transmission to a kitchen display system and related production processing procedures.
3. Integration with payment gateway processing as kiosk/tablet transactions must be settled to complete self-service order entry. PCI-DSS compliance is also an important factor.
Industry experts suggest querying the installed POS provider relative to integration of a self-ordering kiosk and/or identifying a kiosk software provider that has proven integration with multiple POS platforms. Alternatively, and less desirable, a self-order kiosk system could operate as a standalone (non-integrated) application.
Return on investment considerations
The cost of implementing kiosk/tablet technology and the determination of return on investment continue to be challenging for restaurant operators. Calculating ROI is not simply a matter of comparing equipment costs with increased profits. Return on investment is directly impacted by cost of hardware, software, netware, subscription fees and payment processing as well as complexities related to integration with back-office applications and loyalty programs. Restaurants often find themselves struggling to calculate a fair ROI.
Intangible considerations encompass improved order accuracy, speed of service, enhanced customer experience and improved employee morale.
Part two of this series will explore some restaurant use cases for self-serve kiosks.