Article
QSR kiosks: What is taking so long?
Many industries have embraced the self-service technology, but restaurants have been reluctant.
August 29, 2010 by Alicia Kelso — Editor, QSRWeb.com
By now, it’s almost a given that self-service kiosks have a place at the quick-service table. But whether or not it’s at the head of the table or in a child-booster seat remains to be seen.
QSRweb.com explored the kiosk topic in 2006, when Subway, McDonald’s, Burger King and Arby’s began trying out kiosk systems, which allow customers to place and pay for orders themselves through a touchscreen device.
Since, other chains have added kiosks here and there, but there hasn’t necessarily been an explosion as many predicted.
According to Tommy Woycik, president of NEXTEP Systems, a kiosk supplier, the restaurant industry is a bit of an anomaly. There has, indeed, been an explosion in kiosk deployments in other industries, including airports, grocery stores and casinos, but in restaurants, kiosks have “just sort of trickled into place,” he said.
“We’ve been doing this for six years, and every year our restaurant revenue has gone up 40 to 50 percent. It’s been good, sure, but it lags a lot behind other industries, which have doubled in that same time,” Woycik said. “We thought it’d be higher at restaurants – both in the fast casual and quick-service segments – but it’s just not at the same rates.”
Why are restaurants reluctant?
What’s the hold up? Some companies are apprehensive about intimidating technology- trepid customers. Others might be trigger-shy about the cost of a new system rollout, nervous about obsolescing their workforce, or about compromising customer service.
What is certain is that the U.S. is behind European and Asian countries in embracing self-service systems by “10 to 12 years,” according to Woycik.
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“It’s not that customers aren’t ready. This trend is evident in other industries and people love it. They’d much rather self-serve than wait in line,” he said. “My sales team tells me all the time that the biggest issue is restaurants worrying it impersonalizes customer service. But two-thirds of their business goes through the drive-thru, an experience that minimizes personalization. If I want to focus on customer service, I go to a nice steak house, not a fast food place.”
He does admit that adding kiosks is a significant technology undertaking that dramatically changes the operational flow of a restaurant, and that the ubiquity of franchisees in the industry may also be causing some reluctance. The latter issue causes a two-tiered sales approach for kiosk suppliers, which also slows down saturation.
“Often only the parent company prescribes what technology can be used. Which is understandable since they’re doing the accounting,” Woycik said. “And we get franchisees saying they can’t do it without the parent company’s blessing, and the parent company saying we’ll think about it, but we’re not paying for it, the franchisees are. All of this slows things down.”
Still, although most chains aren’t embarking upon a major kiosk rollout, they continue to at least test the waters.
For example, El Pollo Loco added self-serve kiosks in two California locations this summer and Jack in the Box now has about 230 installed in stores throughout the country. Both companies are supplied by EMN8.
Restaurants taking wait and see approach
Jack in the Box first began testing kiosks in 2006 as part of the company’s strategy to reinvent the brand through innovation in guest services, menu and restaurant facilities. The company has plans in place for kiosk installation at additional locations based on dine-in sales volume and certain demographic information, as well as transaction data.
El Pollo Loco is just starting to get into the game and has no timetable set yet as to whether or not it will expand its kiosk presence. For now, the company is focused on perfecting the two stores that do have the equipment.
“We expect to make changes to the physical layout of the kiosks, the order screens and other adjustments based on customer feedback from our test in the two initial restaurants,” said Joe Stein, senior vice president of strategy and innovation.
The chain actively seeks customer feedback about the kiosk additions, and has received both positive and negative comments thus far.
“We’ve received positive feedback from guests who like the technology, and negative feedback from guests who were initially taken aback by the kiosks in the lobby,” Stein said.
As for whether or not El Pollo Loco has benefitted from the kiosks’ additions, it’s too early to tell.
“The test will provide us with this information. We believe kiosks have the potential to provide our guests with a better customer experience,” Stein said. “We also believe that without personal interaction between our guest and restaurant personnel, the dining experience isn’t the same for most. That’s why we have an employee in the dining room to greet and assist our guests.”
Benefits of kiosk systems
While there continues to be some indecision about kiosks’ benefits, one issue of concern can be put to rest: man and machine can coexist.
“The kiosks are not replacing employees. There has been no elimination in labor. In fact, restaurants can actually earn more labor if they facilitate higher transactions. We believe the kiosks can enhance the guest experience by giving them an additional option for ordering, and freeing up restaurant labor to focus on other areas of service,” said Brian Luscomb, corporate communications vice president at Jack in the Box.
Woycik said he can’t think of one instance in the restaurant industry in which kiosk implementation has resulted in staff reduction.
“Having kiosks usually means there are more orders to fill, so it just redistributes the labor. Those employees can now spend time working the kitchen, greeting customers, cleaning tables, whatever they’re needed for to make that restaurant more efficient,” he said.
Woycik is confident, however, that restaurants will continue to catch on, and maybe even increase the trickle flow after realizing kiosks’ advantages; advantages that not only please tech-dependent customers, but also affect the bottom line. Jack in the Box is one such restaurant that has experienced the benefits.
“Kiosk transactions tend to generate a higher average check,” Luscomb said.
The exact reasons behind kiosks’ positive effect on net profits are murky. It doesn’t hurt that the machines can automatically and consistently suggest add-ons and promotional offers on custom interfaces, or reduce order inaccuracies. They may also have a psychological effect.
“Kiosks are proven to be more effective on upselling. A lot of it may be human nature. The pictures on the kiosks, for example, help. When I see a beautiful picture of a shake, as opposed to just seeing ‘shake’ on a menu, I will consider spending an extra dollar to buy it. We eat with our eyes, after all” Woycik said. “And when someone’s trying to sell to me, I kind of put my guard up a little. When a machine is selling something, it’s a little less invasive. We put our guard down.”
About Alicia Kelso
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