THE PANEL MODERATOR: RICHARD MARTIN, executive editor, Nation’s Restaurant News, New York PARTICIPANTS: LARRY BENSON, vice president of sales, NextChoice, Portsmouth, N.H. KAREN BIRD, vice president of restaurant information systems, Chili’s Grill & Bar, Dallas, a 1,100-plus-unit, casual-dining chain owned by Brinker International Inc. TAMY DUPLANTIS, vice president of information technology, Potbelly Sandwich Works, Chicago, a chain of more than 125 restaurants STEPHEN NUTTER, field marketing manager, Togo’s Eatery, Canton, Mass., the 350-unit sandwich chain recently put up for sale by parent Dunkin’ Brands Inc. TIM SHIMKO, director of management information systems, Not Your Average Joe’s, Dartmouth, Mass., a 13-unit chain of casual-dining restaurants DAVID STARMER, director of information technology, Biscuitville Inc., Greensboro, N.C., a chain of 50 counter-service, breakfast-specialty restaurants ALAN STUKALSKY, chief information officer, Church’s Chicken, Atlanta, the approximately 1,200-unit, quick-service restaurant division of Arcapita Inc. HENRY VOLKMAN, director of information systems, Del Taco, Lake Forest, Calif., a 495-unit, quick-service Mexican foods chain owned by Sagittarius Brands of Nashville, Tenn. MICHAEL WELTS, president and chief executive, NextChoice
LONG BEACH, CALIF. A reel of highlights from the Nation’s Restaurant News Self-Service Technology Roundtable sponsored by NextChoice Inc. would show seven chain information systems executives considering strategies and systems to help the industry better manage labor and build guest satisfaction and spending. —
In addition to addressing self-service technology, the panel, held at the Hyatt Regency Long Beach hotel here, touched on such related topics as technology-fueled marketing initiatives. The operator camp agreed that point-of-sale system vendors must do a better job of standardizing application programming interfaces, or APIs, if self-service tools and services, as well as other new technologies, are to be cleanly added to foodservice operations. —
Also on the panel were executives of Portsmouth, N.H.-based NextChoice, provider of the NextWave Intelligent Self-service System supporting integration with POS systems, central management and six guest-order “touch points.” The company’s touch point strategy covers in-restaurant and drive-thru kiosks, dining room tabletop devices, websites, call centers and mobile devices, including Web-enabled cell phones. —
Some panelists predicted a day when consumer use of self-service and the resulting data trail would combine to create “Googlelike advertising,” or discrete third-party offers of services or products inspired by a user’s preferences and behavior. Sponsorship fees for restaurateurs were cited as a part of that scenario. —
Panelists represented concepts ranging from breakfast-specialty businesses to deli sandwich makers to casual-dining establishments to quick-service chicken and Mexican operations. Richard Martin, Nation’s Restaurant News’ executive editor for news, moderated. —
Richard Martin, NRN: [Today] we’re checking ourselves onto airplanes and checking ourselves out of Home Depots. We buy our groceries by scanning our own goods. And now we see this [self-service] frontier [unfolding] in foodservice. Some of you are adopting and adapting some of these [self-service] things right now. Others must be thinking about it. —
Alan Stukalsky, Church’s Chicken: We’re starting to look at some self-service, kiosk-type technology in the 2007 timeframe, so it’s up in front of us. —
Tim Shimko, Not Your Average Joe’s: Currently, we’re running the NextChoice [self-service] application at all of the restaurants. —
Karen Bird, Chili’s Grill & Bar: Pay-at-the-table [technology]—that’s something that’s very interesting to us because customers come into a Chili’s restaurant and they want to get in and they want to get out [at their convenience]. —
Michael Welts, NextChoice: NextChoice is a self-service-software provider of end-to-end solutions. [We support] a very large-scale deployment of self-service technology, whether it’s kiosk-related or Web ordering. [We enable] location-based services that could actually track [users] through cell phones or even [via] OnStar [telemetric] systems. —
Stephen Nutter, Togo’s Eatery: Iam putting together a website and testing it with NextChoice [software], which is exciting. We had an [online ordering] application that we used before, that we paid lots of money for. We tried to do it ourselves. It’s no longer in existence. —
Tamy Duplantis, Potbelly Sandwich Works: We’re thinking about everything [involving service options]. Customers want us—especially when it’s a walk-through line—to balance [speed of service] with customer interaction. —
David Starmer, Biscuitville: This [self-service] is certainly something that we’re very interested in moving forward. —
Larry Benson, NextChoice: The whole [NextChoice] concept [is about] a highly scalable application to allow customers to order and pay from virtually anywhere. We really think something is about to break open [in this area]. —
Henry Volkman, Del Taco: I’m an old EDS guy from when Ross Perot was still running [that company]. That gives you some idea of how long I’ve been doing this. We’re currently going through an upgrade of our point-of-sale system. —
Martin, NRN: Which of your chains are doing kiosk ordering or self-service of any sort? —
Shimko, Not Your Average Joe’s: We’ve got the online ordering [piece], not the kiosks. —
Martin, NRN: How about growth in that area? —
Shimko, Not Your Average Joe’s: All of our restaurants are running it. The integration with the point-of-sale [system] seems to be working pretty well. The test restaurant went live with it [in November 2005] and saw, on average, six orders a month come through [without advertising]. By the end of this past spring [2006], we had three restaurants up and running and [rolled it out] across the board. Now, companywide, we’re averaging somewhere between 60 and 80 orders a week—still, with no advertising. [Online] payment is integrated, [but] customers have the option to pay when they pick up, [which] seems to be a popular choice. We haven’t had any phony orders. —
Duplantis, Potbelly Sandwich Works: Is it integrating with your POS? —
Shimko, Not Your Average Joe’s: Uh-huh. —
Nutter, Togo’s Eatery: We are in the process of testing the [online ordering] site [for] 10 stores. We implemented the first store about a month ago, averaging four orders a day with in-store advertising only—counter cards and bag stuffers. What we’re seeing a lot of is that a customer that would normally come in once, maybe twice a week, is coming in three and four times a week. We aren’t able to integrate [online ordering with] our POS system yet because we have not upgraded [our POS]. We’re getting ready to do that. [For now] we are using a prep printer to print out [Web orders] and [employees] have to ring them into the POS system. We get reports, so we know every night how many [online] orders are coming in and what the sales are. Because of past experience with our
Martin, NRN: Just pranksters [behind fraudulent orders]? —
Nutter, Togo’s Eatery: Who knows whether they [just] went to the wrong store. One of the benefits for the franchisees with this [new] system is that they get immediate gratification in payment. With the old system, they had to wait two weeks, but sometimes it turned into a month. We’re seeing slowly, but surely—again without advertising—that each day more and more orders are being generated. —
Bird, Chili’s Grill & Bar: So, there’s no payment at the restaurant? —
Nutter, Togo’s Eatery: No payment at the restaurant. [Online we accept] Visa, MasterCard and American Express. —
Bird, Chili’s Grill & Bar: [How about] gift cards? —
Nutter, Togo’s Eatery: No gift cards yet. Eventually we will be able to [take] gift cards. One of the reasons we chose NextChoice is because there’s so many different applications we can grow to: tabletop ordering, online ordering, [and] eventually cell phones and PDAs. Togo’s has long lines at lunchtime, but we can’t get any more people through any faster. [Online ordering] is enabling us to be able to do that. A customer places their order online, 20 minutes later they walk into the store [and] grab their bag and go. The people taking advantage of it are loving it. —
Duplantis, Potbelly Sandwich Works: How do you provide an estimated [prep] time to your customer if there’s no integration with the POS? —
Nutter, Togo’s Eatery: There’s no option; it’s 20 minutes. If the order is over a certain size, [the fulfillment notice] defaults to a longer period—two hours—[because it is considered] a catering order. We also post [a notice] on the site that with larger [catering] orders it may take 24 hours [to fill]. At each store, they can choose what they feel is best [for a preparation time parameter]. Right now, during our test, [we’re using] 20 minutes. If the customer says I want to order on Monday for a Thursday pickup, they can go order ahead of time. —
Welts, NextChoice: We’ve actually demonstrated that the average client transaction has gone from an average of about 60 seconds [without specialized technology] down to 5 seconds. Web ordering seems to be the first major opportunity for technology, aside from the POS [system], to have a major impact on the top line and the bottom line inside a restaurant. —
Martin, NRN: [In the future] your PDA or cell phone will become kind of a virtual kiosk. —
Nutter, Togo’s Eatery: Absolutely. —
Welts, NextChoice: The idea of location-based services and that I can order from anywhere I want is going to be critical [to self-service usage growth]. —
Martin, NRN: Nolan Bushnell [the] founder of Atari and Chuck E. Cheese’s Pizza Time Theatre has a new concept called uWink. It’s about games and interactivity [but] it’s adult-oriented. [For] the tabletop-ordering piece of this concept, [he’s] touting the virtues of the customer being able to order, then modify their order without flagging down a waiter. —
Bird, Chili’s Grill & Bar: We’re in the early phases of looking at, or even talking [about table-based ordering options]. Is [the correct strategy going to be] having the server that’s walking around with a [portable] POS device, or a PDA? Or is it [going to be best to have] tabletop [devices] where you’ve got your customers ordering [themselves]? Pay-at-the-table, for us, is probably the first one [we will consider]. I think, also, [the technology strategy used] is going to depend on the environment. At a Chili’s, I can see any and all of the above [technologies]. At a Maggiano’s, that’s not [as true] because when a customer goes to a Maggiano’s restaurant, they’re there for a specific reason … it’s fine dining at that point. Chili’s has a couple different footprints for our restaurants. We’ve got airport locations where it may make sense to have a freestanding kiosk. We have an in-house developed point-of-sale system, [and] we’re doing some work right now to re-architect that platform. Once we get past that, we’ll focus on some of the technologies coming down the road. —
Welts, NextChoice: That’s critical. First of all, [for efficient self-service] you have to get through this POS-integration point, and that’s always been the toughest nut to crack for anyone in this space, especially in proprietary POS cases. —
Martin, NRN: What are you hearing from your marketing colleagues about things they would like to do as you capture more personalized customer data? —
Stukalsky, Church’s Chicken: This is a very hot topic for us, [this] changing the patterns of the shopper [such as] having the frequent lunch shoppers come at dinner. We started doing promotions by printing out receipt coupons saying, “Come back for dinner for a free piece of chicken” and things of that nature. Not a lot has been done around marketing that promotion, but we’re doing it in all of our corporate restaurants. It’s been very successful. Our dinner—weekday dinner—is not very good, but our lunch is always extremely crowded, so it’s really changed the shopping pattern. —
Martin, NRN: Tim, are you conjuring up ideas about how to massage all this data? —
Shimko, Not Your Average Joe’s: We have monthly newsletters. [Subscribers] get an e-mail from us once a year on their birthday to come in, and they get a free meal. We’re looking to tie all that information together so that when somebody signs up, it creates a calendar in the NextChoice application. All of that [information] goes directly over to our existing marketing campaign, and from there we’ll identify who’s signed up through the Internet and the marketing department will advertise [to them] appropriately. We’ve got an e-mail list of over 20,000 people right now. —
Duplantis, Potbelly Sandwich Works: How do they sign up? —
Shimko, Not Your Average Joe’s: Right now, directly through our website. —
Martin, NRN: Can you capture an e-mail address from an order made online? —
Shimko, Not Your Average Joe’s: Yeah. —
Martin, NRN: What about stored-value purchase cards and gift cards [and self-service]? —
Welts, NextChoice: We’re seeing a lot of opportunity [from self-service gift card kiosks] with pretty sizeable customers. [They also are] extending their footprint beyond their restaurants and putting them out to shopping malls, airports, et cetera. They’re increasing same-store sales, [and] they’ve eliminated the headache of having to integrate with the POS. —
Martin, NRN: Who wants to speak about drive-thru [technology]? —
Welts, NextChoice: We certainly see kiosks taking off in drive-thrus. [Such growth] corresponds with the challenges of the footprints of [restaurant sites] and how you can increase flow-through traffic in [drive-thru lanes, including multiple-lane configurations]. —
Duplantis, Potbelly Sandwich Works: Is anyone actually doing drive-thru self-service kiosk? —
Welts, NextChoice: Yes. I think some Subways have drive-thrus [in Ohio and Florida, including some with hydraulic stands to raise and lower the touchscreen to accommodate vehicle height]. —
Bird, Chili’s Grill & Bar: Sheetz was doing [drive-thru kiosks] at prototype [convenience] stores. —
Martin, NRN: The premise behind remote call centers for drive-thrus [is that because drive-thru station employees typically fill orders and make change while taking orders] service is eroded and order accuracy slips. [With a remote call center], if it’s seamless, the customer thinks he’s talking to someone at the restaurant, but may be talking to someone hundreds of miles away. That [call center] person is specially trained and [speaks] understandable [English or another desired language]. —
Bird, Chili’s Grill & Bar: There’s a number of companies focusing on this. Not even just for drive-thrus, but also for to-go and casual-dining [operations]. And one of things we’re seeing is that they’re moving away from an actual, physical call center [and using] home-[based] people. —
Duplantis, Potbelly Sandwich Works: How are they doing the telephone systems? —
Bird, Chili’s Grill & Bar: It’s all Internet-based ordering. A key reason for doing [a remote call center] is that I’ve got this [remote] person focused on the customer [not distracted by] things going on in the restaurant. [They can] upsell. —
Duplantis, Potbelly Sandwich Works: The generation that we’re trying to reach out to is [enamored with] the text message and instant messaging. My kids don’t even use their cell phones anymore. If you reach out for that generation, [self-service] is a natural. —
Shimko, Not Your Average Joe’s: [But] when my mom goes through a drive-thru where there’s only a [kiosk] console, what’s going to happen because she can’t use computers? —
Welts, NextChoice: We’re working on a quick-service restaurant drive-thru panel [of six QSR operators] trying to develop that next generation of outdoor kiosk. One of the requisites [according to the panel] is a button that allows you to talk [to an employee to place an order]. —
Stukalsky, Church’s Chicken: We’ve been pilot testing [contactless payment cards] in our drive-thrus [at three Texas restaurants]. I never realized, being from the IT side, how conscious everybody is of giving their credit card to the order taker [and how concerned they are about identity theft]. [With these contactless cards], they just swipe [near the reader] and go. It’s gaining a lot of acceptance. —
Martin, NRN: [Some believe self-service technology is] going to take the hospitality out of the hospitality business. Is it quite the opposite? —
Shimko, Not Your Average Joe’s: We’re not looking to replace any employees with an online ordering application or whatever method we use to implement [self-service]. We’re looking to increase the amount of customers while meeting our limited seating capacity. The only additional place to make money in our restaurant is through takeout. —
Welts, NextChoice: This is a labor redeployment. —
Nutter, Togo’s Eatery: We see it as an opportunity to add more labor because we can separate and have a little section [for online and phone orders] with people dedicated to just that. The customers that come into the store can get faster service because [employees are] not being pulled away to answer the phones or something else. We’re transferring people around and increasing our customer counts through the busiest time of the day. —
Martin, NRN: What do you see as the outlook for mobile devices and customer habits and marketing towards that? Are people using cell phones and PDAs to do ordering? —
Welts, NextChoice: Did everyone see the coverage [late in 2006] on every morning [TV] talk show? The company [covered] basically identified a few stores in Manhattan [and supports customer text messaging of food and beverage orders and payments]. They’re not integrated with POS. This is the one-off solution that you’re going to continue to get until, as an industry, we figure out the POS [integration] challenge. —
Duplantis, Potbelly Sandwich Works: But think of the opportunity with cellular [phones]. Everyone has one, and the ability to use those to place your order or cash out [could prove valuable]. —
Starmer, Biscuitville: What about Web pages [for ordering] optimized for mobile devices? —
Shimko, Not Your Average Joe’s: It’s definitely something we’re hoping for. We’ve got a train station right next to one of our restaurants. Tell these [commuting] people, “Place your order on your way home from work and it will be ready for you by the time you get to your car.” Have them do it from the train. —
Welts, NextChoice: [With mobile ordering] we have to make sure that the system has a built-in back end to [work] with kitchen flow. You don’t want someone ordering at 11:45 a.m. and expecting that they’re going to drive in and pick it up when right now your kitchen can’t get any orders out until 12:15 p.m. You lost a happy customer and offset the advantage of the [order-ahead] program. We patented technology regulating traffic flow. —
Duplantis, Potbelly Sandwich Works: You almost have to have a way for all of these different ordering inputs to come through something central. [Customers may be] faxing in orders, they’re calling in orders and now they’re online ordering, you need to give them cellular ability to order and then you’ve got people walking into your restaurant. —
Welts, NextChoice: Right. We refer to it as the centralized scheduling engine. —
Martin, NRN: What about enterprise-managed [technology] versus hosted and outsourcing? —
Stukalsky, Church’s Chicken: When I came in [a year ago], they had already started outsourcing everything but restaurant system support and maintenance. We lived through the outsourcing of all of our help desk, PC support, network support—basically the whole gambit of back-end IT support—to a company in India. If you have good communication channels and good project managers in-house to manage the outsource process, you will be successful. —
Shimko, Not Your Average Joe’s: Right now we’re a very in-house operation with the exception of NextChoice, and I wouldn’t even consider NextChoice an outsource because we’re hosting it ourselves. Our phone systems, all of our computer networks, all of our e-mail—it’s all done in-house. —
Volkman, Del Taco: At Del Taco, we don’t outsource anything. We saved a huge amount of money when we brought [in-restaurant troubleshooting] in-house. We take all the first [help] calls and we do the dispatching. When the dotcoms fell apart, I was able to get some unbelievable talent. [My approach] may have been [influenced] by the fact that the people I worked for did not support outsourcing. —
Starmer, Biscuitville: We made a conscious decision to in-source. Not only has it saved a significant amount of money, especially on the POS side, but also because of it we have higher satisfaction now from our operators based on the support we’re providing. We just kicked off [a website] redesign. It will be hosted elsewhere, but it will be managed [in-house] and stakeholders inside the company will [handle] key content. —
Duplantis, Potbelly Sandwich Works: In my past, [such as at T.G.I. Friday’s] we’ve outsourced very little. But for a small company, I think outsourcing [or] hosted applications work well when you don’t have the means to build your own stuff. Potbelly is outsourcing several things. Even if you have a good outsource consultant, you have to be careful that they know your business. —
Nutter, Togo’s Eatery: If you want to call it outsourcing, Togo’s relies on [parent] Dunkin’ Brands for our legal and IT [services], and the support for the brand. We’ll see what happens [after a planned Togo’s spinoff]. —
Bird, Chili’s Grill & Bar: You have to look at each segment of your IT business and decide what the best approach is for you. Even though we have an in-house developed point-of-sale system, we actually outsource the development of that system. Help desk is internal for restaurant [and corporate] support. That’s a key point for us and we’re able to provide that service probably better than somebody else. —
Martin, NRN: Let’s talk about optimization of a website for commerce. —
Starmer, Biscuitville: That’s assuming the goal of your website is commerce. I think the goal of a website—ours anyway—would be to draw people to the stores. That’s where our revenue will [most] be impacted. —
Nutter, Togo’s Eatery: What we’re looking to do with [our website] is [give] the customer going into the store locator to locate a store [the] opportunity to say: “Here’s the store I want to go to. Oh, look, I can order, [too]!” —
Duplantis, Potbelly Sandwich Works: The whole concept of a kiosk or online ordering or drive-thru [self-service] is forcing us to consider what does [adding] it do to your concept? —
Volkman, Del Taco: We can talk technology, but we have the easy part. These things are immensely complicated on the brand side. How do you put [information to serve the customer and support brand positioning] in a text message? The marketing guys, they want something to say about that [and] so do the operations guys, financial guy and the boss him or herself. —
Bird, Chili’s Grill & Bar: I think [one of our] jobs is to bring ideas to the table, but at the end of the day, it’s got to be somebody within the company that owns that [IT] product. —