Article
Is it time for QSRs to embrace kiosks?
Despite recent test deployments, the QSR segment has been slow to adopt self-service. Here's a look at why.
July 26, 2009
Self-service kiosks and quick-serve restaurants would seem like logical companions – both have the ultimate objective of empowering consumers to get what they want and to get it quickly.
But the QSR space has been much slower than other industries to adopt kiosks in the United States. Self-service has become ubiquitous at the grocery store, airport and movie theater, and with the recent proliferation of DVD-rental kiosks, it even confronts consumers on nearly every street corner.
"Compared to retail, QSR has been just generally slower in adopting technology," said Perse Faily, CEO of San Diego-based kiosk maker EMN8. "QSR didn't adopt credit cards until four or five years ago."
But the absence of kiosks in QSRs isn't for a lack of effort, at least on the part of kiosk manufacturers. EMN8 and Detroit-based NEXTEP SYSTEMS, for example, are concentrating the majority of their efforts on the restaurant industry specifically.
Faily and EMN8 are working with franchisees from Arby's and Jack in the Box to roll out self-order kiosks in Tulsa, Okla., and the Phoenix area, respectively. Faily says both franchisees' pilots are nearly complete and are moving to the next phase, where the kiosks will be deployed in several stores.
Test deployments like EMN8's might indicate the segment is moving toward greater acceptance of self-service kiosks, but small-scale pilots and one-off franchisee deployments have been happening for several years in the QSR space. However, the model hasn't stuck, which leaves many in the self-service industry, and even some consumers, wondering why.
Operational complexity
Faily said the biggest reason most brands don't venture into self-service deployments is that they have the potential to completely change the operational landscape of a restaurant, perhaps more so than deployments in other environments, such as convenience stores or airports.
"Most importantly, most of the other self-service solutions that I know are ones where the customer does their own fulfillment," she said. "So they don't have to be operationally as deeply integrated. In this instance, you're going into an environment, you're placing an order and that kiosk and the solution is deeply integrated into the way a restaurant operates."
Tommy Woycik, president of NEXTEP, which specializes in self-order kiosk technology, agrees.
"There are very real operational considerations," he said. "The top QSRs, they really have made store layout a science. And when you start putting in a significant piece of technology that has such a dramatic change on the flow of people and transaction time and where people are going to pool, it's not to be taken lightly."
NEXTEP has worked with Dunkin' Donuts to deploy self-order kiosks and digital displays in non-traditional locations, such as stadiums and airports. The company also began a 70-location pilot with Subway in 2005, but the rollout hasn't expanded.
Long-term benefits
While inserting a kiosk into a QSR environment may be a complex process, the technology offers operators advantages that may outweigh the drawbacks in the long term. Chief among them is enhancing the guest experience.
"What we've found is that what guests really like is the ability to have control over the ordering process themselves and not feel rushed in doing so," said EMN8's Faily. "Also, they like the fact that having kiosks provides faster service."
Faily said that in EMN8's experience, customers also appreciate the kiosks' easy-to-use interface and the fun process of using the technology.
Plus, with many kiosk software platforms, operators have options and can remain very much in control of how the technology interacts with their customers. Both EMN8 and NEXTEP create custom user interfaces for each brand they work with, and operators can choose to include features such as nutritional information, suggested add-ons and promotional offers.
But there also are direct benefits for the brand. Faily said operators EMN8 works with have realized a 15 percent to 30 percent lift in the average check total, thanks to a kiosk's ability to upsell and cross-sell high-margin items. Other benefits include a positive impact on throughput, since a kiosk represents an additional order point that doesn't require staffing, and reduced shrinkage and waste, since a kiosk enables much more consistent order accuracy.
"The net result of all of that is that the dollars and the number of orders in a store go up," Faily said. "And with the same number of employees, they're getting more dollars per labor hour."
Faily is careful to point out that deploying a kiosk doesn't mean reducing staff, though.
"Not a single one of our customers has reduced labor in their stores," she said. "What we've found is that they have redeployed labor, so all of the sudden they're taking more orders, they're shifting people to fulfillment or they're moving a cashier from behind the counter to in front of the counter to a kiosk … which actually has beneficial impact on the guest experience."
Taking it to the drive-thru
Another reason often cited for QSRs' hesitance to deploy kiosks is that for most brands the majority of the business is done in the drive-thru, particularly at busy times when a kiosk might seem most useful.
To solve that problem, Woycik and NEXTEP have developed a touchscreen self-order kiosk for the drive-thru. The kiosk's interface works just like that of one inside the store, and the company is working on a customer-recognition feature that remembers a diner's previous orders and credit card information. NEXTEP worked with Subway a couple of years ago to test the drive-thru kiosk technology.
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"They've actually been an amazing success," Woycik said. "I think the drive-thru solution is going to be incredibly popular."
And deploying self-order technology in the drive-thru may even make more sense than doing it in-store.
"It's a segment of the customer base that's probably most sensitive to time — commuters and travelers, people with a lot of kids in the car, perhaps," Woycik said. "That segment of the customer base probably doesn't value the customer service experience as much. So when we can implement this technology specifically for a segment of the customer base that is most sensitive to time, it's a real hit."
Woycik concludes that, despite their trepidation, QSRs must realize that, on the whole, consumers are acclimated to self-service in their everyday lives. And many appreciate the opportunity to use technology to control their retail and foodservice experiences.
"I can tell you what the reason is not," he said when asked why QSRs still aren't embracing the technology. "It's not that the customers aren't ready. The feedback is overwhelmingly positive. Faces light up when they use it the first time, and they give you the 'Boy, that's so cool.'"
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