With the growing number of smartphone mobile ordering and payment applications, restaurant information technology divisions have gone from a cost center serving brands’ operations to a crucial part of the revenue stream.
“It used to be kind of a tool for operations or a supplement, and [it] is now stepping forward and becoming an actual profit center and driving the sales,” said Jeff Weiss, information technology director of store systems at the 68-unit Dallas-based Dave & Buster’s, in remarks made during a panel discussion at the National Restaurant Association Show in Chicago last month.
Customers are more frequently demanding a connection to a brand on their smartphones, and restaurants are considering an increasing number of technology options to meet those demands, according to technology leaders from the 1,598-unit Rosemead, Calif.-based Panda Restaurant Group Inc. and the 420-unit Columbus, Ohio-based White Castle Management Co.
Restaurants must carefully consider who develops the brands’ application and who keeps the customer information, advised Richard K. Crone, chief executive and founder of Crone Consulting LLC, who moderated the panel. The restaurant brand can develop the applications and register the customers, but if a third-party intermediary does that the database may not be widely available to the brand, Crone said.
“The one who enrolls is the one who controls,” Crone said. “The one who enrolls the customer for that online interaction is the one who controls the database and the data comes with it.”
Still, as consumer adoption of smartphone technology increases — penetration is more than 70 percent, Crone said — the advantages for restaurant brands will continue to grow, he said.
“The customer has made the capital expenditure and the customer is paying for the data plan,” Crone said, “so the key is bringing the things to the venue they have already paid for.”
Caleb Mitsvotai, senior manager of innovation and technology at Panda Restaurant Group, said the new technology offers challenges as well as opportunities.
“Guests are demanding a more frictionless engagement with our brands, [and] that represents a great opportunity,” Mitsvotai said. “For the first time, we have an ability to develop a relationship with our guests on a one-to-one basis.”
Onsite hospitality companies have used similar customer relationship management with their accounts that range from hundreds of thousands of dollars to millions, however, restaurant brands haven’t had that option, he said. But technology now offers those traditional restaurant brands, such as Panda with a $10 check average, ways to cater to customers.
“We can know their behaviors and influence those behaviors,” Mitsvotai said.
Don Long, managing partner and senior director of information systems and information technology at White Castle Management, said his burger company designs and specs out its applications, with some coding done by the brand’s point-of-sale vendor.
Long said White Castle has online ordering, mobile ordering and, in test, kiosks.
“We are working on a concept called ‘Mobile Kiosk,’ where you basically bring your own kiosk with you on your mobile phone,” Long said.
Weiss said Dave & Buster’s has employed in-store kiosks for about eight years.
“Consumers are fine with the machines,” Weiss said. “Not only do they prefer the machines, but the machines up-sell better than our servers by [more than] 50 percent.”
Crone added that the average size of online orders is nearly double that of non-online orders.
Mitsvotai noted that Panda’s best customers are worth nine times an average customer. The company would benefit if it had data on them, such as whether a customer liked shrimp dishes.
“We want to keep and tailor those customers,” Mitsvotai said. “We certainly don’t want them walking in with a third-party intermediary app, because we want to preserve the data and analytics on my best customers.”
Lon said White Castle’s goal in mobile is to “to get to the point where our customer, even if they are not in the store, can communicate with us more.”
Misvotai added that restaurants have to get their mobile applications right before taking them to the smartphone users.
“Consumers are very merciless,” he said. “If it doesn’t work right, they will delete the experience that we want.”
Contact Ron Ruggless at [email protected].
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