Even as point-of-sale technology saves chains more money and time with such centralized administrative functions as automated systemwide menu price adjustments, the trend toward decentralized transaction management is helping operators improve sales and service ratings, users said.
Buca di Beppo, Delaware North Cos., Hardee’s, Jack in the Box, KFC, On The Border and T.G.I. Friday’s are among the chains seeking benefits from new POS technology that changes the dynamics of who accesses the systems, with what and from where.
Select franchised Hardee’s restaurants owned by Geneva Enterprises LLC of Duluth, Ga., as well as restaurants operated by Jack in the Box Inc. of San Diego are benefiting from POS decentralization. Both camps said sales and service ratings have risen with the deployment of customer self-order kiosks tied directly to in-store POS systems.
Michael Verdesca, vice president for systems development for Jack in the Box, said the kiosks being tested by his chain at 30 restaurants use Xpient Solutions LLC POS software and EMN8 Inc. touchscreen kiosk hardware and related applications. He said about half of the dining room guests at the test restaurants use the kiosks, which accept and dispense cash, handle card payments, and present information in both Spanish and English.
Kiosk users consistently spend more than guests served at the counter, Verdesca said.
Employees who previously took orders and handled payments are now free to assemble orders, and that has increased customer throughput, Verdesca said. The chain needed more order-management-display screens in the kitchen to accommodate the higher number of orders during rushes, he noted.
Jack in the Box generates about 70 percent of its systemwide sales from the drive-thru, said Verdesca, who spoke of his organization’s expanded test of kiosks during FS/TEC 2007 in Atlanta. He explained that the trial and an interior-design re-imaging initiative were intended to see how many people Jack in the Box could convert from drive-thru to dining room patronage and whether such a shift would contribute to “an overall incremental lift” in sales.
Jonpaul Leskie, chief executive of seven-unit Hardee’s franchisee Geneva Enterprises and a veteran information technology executive and consultant, also discussed kiosks during FS/TEC. His operation combines EMN8 kiosk hardware and software with ParTech Inc. POS and back-office software.
Leskie said kiosk users at his units spend, on average, 15 percent more than counter customers, with some spending 25 percent more.
Both Leskie and Verdesca said kiosks must be fully integrated with POS systems for speed of service, accuracy and accounting purposes and that kiosk and POS vendors must work together to achieve that state. Properly managing change and convincing employees to champion kiosks, as opposed to fear them as a possible job killer, are among the greatest challenges associated with the technology, they said.
Leskie indicated that kiosks work best in operations doing a high percentage of dining room business and that are patronized by “Generation X” members and “Millennials,” or people born between 1964 and 1998 who are comfortable with technology.
Verdesca and Leskie said kiosks contribute to higher average checks through programmed and consistent suggestive selling prompts, such as those asking guests if they want to add a beverage. Such suggestions apparently don’t put off guests, Verdesca indicated, as “we get higher customer satisfaction scores from our kiosks.”
Guest self-order kiosks–three in all–are a prominent part of KFC’s 10-month-old restaurant in Paris. That unit uses Micros Systems Inc. POS software and features eight conventional POS terminals, as well as the kiosks and interface software from French vendor Acrelec, which also supplies multimedia displays and content management systems.
Acrelec also supplies kiosk support for some units operated by Quick, the 400-plus-unit, Belgium-based fast-food chain using Posera Inc.’s Maitre’D POS software, and for more than 100 European McDonald’s outlets running Torex Hospitality POS software.
Concessionaire Delaware North Cos. of Buffalo, N.Y., recently ordered eight kiosk packages from Micros for use at HSBC Arena in Buffalo, Nationwide Arena in Columbus, Ohio, and Boston’s TD Banknorth Garden Arena.
National Restaurant Association 2007 consumer research, results of which were released with the trade group’s 2008 Restaurant Industry Forecast, supports the notion that many diners are appreciative of kiosks.
“In quick-service restaurants, it was 57 percent of the customers who said they would use a self-serve ordering terminal if it was offered to them,” said Sue Hensley, NRA senior vice president of marketing, communications and media relations.
Strategically located kiosks apparently don’t go far enough in supporting guest self-service in the minds of some restaurant users.
“[Nearly] 44 percent of consumers [surveyed] said they would like to use an electronic ordering system at their table,” Hensley said.
Consumers get exactly that at uWink Inc.’s prototype “interactive restaurant” in Woodland Hills, Calif., where patrons using table-top touchscreen terminals order foods, beverages and games, and can close out their own tabs and pay using a credit or debit card. The Van Nuys, Calif.-based company’s restaurant generated first-year sales of better than $2.2 million.
UWink recently said it would market its technology to others and its pay-at-table software might get the closest initial scrutiny from restaurant companies, as several are already testing or deploying wireless-payment terminals from VeriFone Holdings Inc. and Ingenico. The Ruth’s Chris Steak House in Austin, Texas, found VeriFone’s wireless terminal with data encryption and integrated printer as a way to trim five to 10 minutes off table turns on busy nights and provide guests with card payment “security and peace of mind,” general manager Sal Olivas said.
“Expect to see more pay-at-the-table technologies, especially as [identity] theft continues to make the news,” said Lee Holman, lead retail analyst for technology research and services firm IHL Group of Franklin, Tenn.
The gap between consumer interest in pay-at-table technology and operator delivery of that service appears to be large. According to the NRA, 1 percent of the full-service restaurant operators surveyed by the association in October offered an electronic payment system that was accessible at guest tables, while 53 percent of the consumers recently questioned by the trade group said they would likely use such a system.
Handheld POS terminals have been used for several years in large stadium or arena settings. Delaware North ordered 106 Mobile Micros units for HSBC Arena, Nationwide Arena and TD Banknorth Garden Arena. The devices also are used to squelch drive-thru or counter lines by some quick-service and fast-casual chains, as well as in some highly differentiated table-service concepts, such as Darden Restaurants’ Seasons 52.
Now, however, some larger full-service chains are testing handheld POS in more conventional operations. Among them are the 166-unit On The Border Mexican Grill & Cantina chain of Dallas and T.G.I. Friday’s of Carrollton, Texas, with 602 domestic restaurants.
On the Border has deployed mobile POS terminals exclusively for order taking at three new Texas restaurants. The months-old, approximately 4,000-square-foot restaurants in Grand Prairie, McKinney and Plano were developed within strip centers in neighborhood settings, as compared to the chain’s more typical configuration of 6,000-square-foot free-standing restaurants on regional mall parking pads.
Brinker International Inc.-owned On the Border is using wireless, tablet-style, touchscreen terminals running Radiant Systems POS software. That practice is an effort to fulfill the “consumer’s need for convenience” in a way “that makes sense from a business perspective,” said vice president of marketing Linda VanGosen. Part of that business need, she indicated, is to accelerate table turns for improved sales per square foot and return on investment from the smaller restaurants “without making the dining experience feel rushed.”
The mobile POS system being used by On the Border, similar to many POS-integrated tableside ordering technologies, reduces the time it takes to transmit orders to the bar and kitchen by enabling servers to enter them into the POS system as they are spelled out by guests. This, in turn, shortens the time it takes to start preparation and, ultimately, deliver foods and beverages to the table.
OTB’s setup also reduces the time it takes to settle transactions by incorporating credit and debit card readers into the tablet devices and by supporting wireless, belt-hung printers that let wait staffers print out receipts and payment card slips tableside.
Using the technology, “we’ve sped up the dining experience by about five minutes,” VanGosen said. She added that some guests have associated the new system with improved order accuracy, while others have responded favorably to the technology’s support of tableside settlement because of concerns about possible payment-card fraud or identity theft.
The results from the three-unit handheld POS test will be analyzed to determine if there are possible systemwide implications, VanGosen said.
VanGosen said 10 to 12 mobile POS devices are used at each of the three test units, which also have some fixed POS terminals for back-up purposes. The tablet device, which is made sturdier for restaurant use, may eventually give way to a smaller terminal, she said.
Officials of T.G.I. Friday’s were unavailable for comment about that chain’s test of mobile POS combining Micros software and Motorola Symbol hardware at four restaurants, including the chain’s new unit in NorthPark Center in Dallas. However, a recent article in the Dallas Morning News quoted T.G.I. Friday’s USA president Mike Archer as saying that, among other things, the handheld terminals mean faster table turns and “less waiting around” by guests.
Archer also was quoted as saying that the use of handhelds—there reportedly are 25 deployed at the NorthPark location—can add $50,000 to the cost of a conventional, fixed-terminal POS system.
Another form of POS technology decentralization driving new operator applications and vendor activity relates to online ordering systems linked to in-restaurant POS systems for seamless hand-off to kitchen production systems and accounting programs.
While pizza and other takeout and delivery specialty chains have had online ordering capabilities of varying sophistication at selected or systemwide stores for some time, tests are now being conducted by casual-dining operators as well, including 91-unit Buca di Beppo of Minneapolis.
This past fall Buca began testing online ordering supported by technology and services provider orderTalk that integrates with the chain’s SquirrelOne POS platform from Squirrel Systems at five restaurants. If the initial trial continues without a hitch, the chain will add 18 more units to the test mix this month, said Dan Cullen, senior director of information technology.
“We would not have gone ahead with this [online ordering] without POS integration,” Cullen said, adding that the initial volume of online orders was much higher than expected, even with a soft launch of the system, and that online orders yielded “a 40-percent higher ticket than phone-in orders.”
The screen prompts programmed into the online interface incorporate suggestive selling.
To keep stores from getting slammed by online orders on top of on-site business during rushes, Buca’s online-ordering technology limits the number of orders that can be entered every 15 minutes, kicking any that exceed the programmed threshold over to the next available 15-minute slot.
Carlsbad, Calif.-based casual-dining specialist Islands Restaurants also recently linked online orders with its unit-level POS systems by Hospitality Solutions International.
Two-unit Italian restaurant company Mozzarella di Bufala Pizzeria of San Francisco described as a “significant technological leap” the year-old integration of its SpeedLine Solutions POS system with Golicious, its online ordering technology hosting company.
Mozzarella di Bufala owner Pedro Galetti said, “The costs of offering online ordering are minimal in comparison to the advantages in sales and customer expansion.”
He said he pays a $40 monthly hosting fee to Golicious and $1 per order processed.
