Self-serve kiosks could revive corporate dining, an industry that has long been in decline because of corporate downsizing and the costs associated with running an employee cafeteria. The segment's sales tumbled steadily from $1.976 billion in 1987 to a low of $409.5 million in 2011, before beginning an upward movement for the next four years to $459.3 million in 2015, according to the National Restaurant Association.
One company hoping to prove that kiosks can turn around that trend is Sterling Services Inc., a refreshment services provider based in Canton, Michigan. CEO Ray Friedrich in 2012 deployed some of the first micro markets — self-contained stores where patrons pay for goods at a self-checkout kiosk — in corporate dining locations. Removing the cashiers allowed those companies to each save a full-time salary of as much as $35,000.
Fast forward five years to now, and the company's newly developed self-order kiosk further improves the micro market by removing the need for the patron to place orders at the counter, as reported in part 1 of this 2-part series.
How it works
The self-order function makes feeding employees much easier, said Friedrich. Without it, patrons had to place orders at the counter and pay at the kiosk by scanning the package at the kiosk. The preparers, by hand, had to place bar codes on the packages. Now, patrons can both order and pay via kiosk or phone.
Integrating self-service kiosk technology into a corporate dining setting wasn't easy, however. There were no "off-the-shelf" kiosk solutions available for corporate dining when Friedrich and his team began investigating an order-and-pay kiosk solution three years ago.
"All these (foodservice) operators had the same problem," said Jim Bishop, who helped develop the kiosks while working as CTO at Sterling Services. "Their cafeteria (manual feeding) program didn’t talk to their micro market program and their vending machines. There wasn’t a solid platform all the way around."
Bishop's solution: a kiosk that could integrate self-order, self-checkout and POS functions.
"You could have one platform, one type of kiosk that could do multiple things," he said. "Your accounting would be all wrapped together."
A year later, Bishop got some investors to help him launch Digital Checkouts, kiosks that eliminate the need for the patron to place the order at the counter and for the preparer to place bar codes on the packages to be scanned at the payment kiosk.
"That’s a big pain in the butt for everybody," said Bishop.
"It is also now possible for an employee to pick a packaged snack from one of the shelves in the cafeteria, scan it at the kiosk and pay for it, then order something from the kitchen at the kiosk," Bishop said.
Convenience is key; customers can order, pay and even receive their change at the kiosk, said Bishop, who also pointed out that there is an optional thumbprint reader.
"It all goes into one accounting platform so that you no longer have to have these different accounting systems," he said.
Bringing it together
Bishop wasn’t the only brain behind Digital Checkouts, of course. He worked with iConnect, a provider of POS systems, which designed the software and created a code for self-order, self-checkout and other peripherals. Flextronics, a contract manufacturer, provided the hardware, which is EMV compliant, and Roush Industries will provide hardware for future models.
The team developed software that allows the POS screen to switch into self-order or self-checkout modes. Cashiers may also use the screen if necessary.
"It's a POS station for the cashier to use as a register," Bishop said. "Tap on the screen three times, and hit the self-checkout or the self-order button."
The team also developed a mobile phone ordering and online ordering app. The customer can pay by credit or stored value account using their mobile phone or desktop.
"All the reporting goes to one cloud backend," Bishop said.
A need for cash?
Because the Digital Checkouts kiosk can accept and dispense cash, its location does not need to have a separate payment device for these functions, Bishop said. That saves the location from installing more than one payment device, unlike many micro-market kiosks, which don't accept or dispense cash.
"Even though (cash) is 10 percent of the business (under the commonly used payment systems), the cafeteria market hasn’t been tried yet," he said. "Is that cafeteria market going to be a credit card market only, or is it going to be 50/50? I think the cafeterias are going to be a little more towards the cash side."
While Bishop's focus is on the corporate dining market, he sees application in the commercial foodservice sector as well. Digital Checkouts offers a point of distinction in allowing foodservice operations to accept and dispense cash in addition to credit and stored value payments.
The company will introduce its solution to quick serve restaurants and fast casual restaurants. Restaurants will be offered the option of kiosks that accept and dispense cash.
Bishop plans to introduce a model for restaurants in late April.
For the time being, however, the company’s focus is on employee foodservice, a market that has long needed a shot in the arm.
/ Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.