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Are McDonald's kiosks the ideal solution?

Since the launch of McDonald's kiosks, the QSR business has been enthusiastic about the possibilities of indoor kiosks. But every opportunity presents its own array of challenges.

February 17, 2016 by Bradley Cooper — Editor, ATM Marketplace & Food Truck Operator

Kiosks have become all the rage in the quick-serve restaurant segment.

This can be seen with the huge influx of celebration and condemnation when McDonald's began to deploy iPad-style kiosks at many of its locations. However, McDonald's is not the only QSR to experiment with kiosks. Subway and Pizza Hut have also deployed their own solutions. This trend presents several challenges and opportunities for QSR companies and kiosk manufacturers.

The first key challenge to the industry, customization, is ironically also an opportunity. According to a recent blog post by Frank Olea, QSR kiosks can deliver customized solutions, which can draw in a crucial demographic, the millennials. However, because every restaurant's needs are different, it can be a headache for kiosk manufacturers. For example, restaurants struggle with choosing the right size touchscreen. Should it be huge to draw attention, or should it be small to save space?

"Whatever furniture you create, someone comes in and says they want a different shape," said Sahi Roshendal, vice president of hardware engineering and product management at PAR Technology. "It is brutal to go through these developments."

However, it is important not to underestimate the appeal of QSR kiosks to digital natives, including millennials. This is a tendency among digital natives, according to Roshendal, to not want to talk or engage with customer representatives. Instead, they prefer to have a large amount of digital options, which QSR kiosks provide.

On a broader level, QSR kiosks can help relieve some of the stress during busy hours. There is always a possibility that customers will leave if the line is too long, but kiosks can help redirect and capture those consumers.

One of the most common assumptions about QSR kiosks is that they can save costs by cutting back on employees. Many analysts have suggested that McDonald's is deploying kiosks in response to legislative proposals to raise the minimum wage to $15 an hour. However, a basic analysis reveals that QSR kiosks, in many cases, do not reduce the need for employees.

"In a QSR environment, it would be not right to think it's [kiosks] going to replace employees," Roshendal said. There a variety of reasons for this fact. First of all, with most QSRs, 70 percent of their business comes from the drive-thru. This means, that any indoor kiosk, such as McDonald's "Create your own taste," would only be servicing 30 percent of its customers.

In fact, Roshendal argues that the real goal behind such kiosks is to improve customer experience and increase speed of service. You can't cut down on the time of certain activities such as food prep time, simply for safety. An indoor kiosk can increase the speed of lines, but it can also bring more people into the actual store. This means the restaurant would need more employees to prepare food, not less.

"If the kiosk implementation is bringing more people into the store, how can they go ahead and replace the employee?" Roshendal said. Thus, QSR kiosks present both an opportunity to draw more people inside, but also a challenge to keep up with food preparation.

One final opportunity to consider is analytics. On a basic level, restaurants can examine the number and average dollar amount of transactions. For example, they could compare the average amount of money spent at a kiosk per transaction and compare it with the average amount at a cash register. They could also see how much money in total the kiosk is generating compared to the register. However, it can also be a challenge to select the correct analytics module to gather further data.

While McDonald's kiosk has generated a lot of buzz over the possibilities of QSR kiosks, it is important to keep in mind that even opportunities can introduce new challenges.

About Bradley Cooper

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Bradley Cooper is the editor of ATM Marketplace and Food Truck Operator. He was previously the editor of Digital Signage Today. His background is in information technology, advertising, and writing.

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