Article

SubWorks kiosks achieve fast ROI

C-store deli concept proves that customers are ready for touchscreen food-ordering - and restaurateurs should be, too.

June 28, 2006 by James Bickers — Editor, Networld Alliance

The writer is also editor of SelfServiceWorld.com.

It's fast food for the customer, and fast benefits for the business. The Thorntons SubWorks restaurant concept has integrated touchscreen ordering kiosks into its workflow, and is reaping a fast return on investment of 149 percent.

The c-store chain has sandwich shops in 12 of its 154 locations, each of which contains three kiosks built on NCR Corp. and PosiFlex hardware solutions running software from Xpedient.

Graham Baughman, president of Thorntons, said the company was having difficulty keeping its foodservice operations staffed. Communication also was a constant problem, given the hectic pace of most c-store patrons.

He said the company saw one very notable success among its competitors when it came to modernizing the food line.

"We looked to Sheetz and saw their success over the years in speeding the transaction while reducing labor," he said of the Altoona, Penn.-based c-store chain that has been an innovator in kiosk food-ordering. "So we implemented our version that fit our brand and satisfied our need for speed and simplicity."

Simplicity is key

Keeping it simple for both customer and employee is central to any great self-service application. For the customer, the SubWorks interface is a delight to operate, bright and colorful with easy-to-understand prompts.

The simplicity of operation on the back-end was a big draw, as well. Tony Harris, vice president of IT services for Thorntons, said the company was captivated by the "Powerpoint-like" interface of the Xpedient software, which allowed design to begin quickly. The project launched within 30 days of kick-off, a very respectable to-market time for software customization.

The ordering system also is integrated with the store's existing POS system, meaning less reconciliation work for the manager. When an order is placed at the kiosk, the customer receives a receipt with a custom-generated barcode. The barcode is scanned at the POS, and the system automatically pulls order-data into the register.

It's a powerful and simple idea that may not be right for every restaurant, but it certainly holds great potential for many.

"Fast-food operators should use self-service technology when they have extremely busy lunches and only one line," said Fred Minnick, managing editor of Fast Casual magazine. "The sub chains like Subway and Quizno's are good examples of businesses that could benefit from kiosks. They typically have one order-taking station. If a sub-chain operator were to place a couple of kiosks away from the main line, but still in view of the menu boards, I think he or she would see tremendous sales growth during busy day-parts."

Minnick is less bullish about self-service ordering in restaurants with multiple lines, which already do a good job of getting customers in and out quickly. But those restaurants, he said, would be wise to incorporate touchscreen ordering into a historically troublesome part of their operation: the drive-thru.

"Consumers grow tired of wrong orders," Minnick said. "If a customer can be given some type of control during the drive-thru-ordering process, I think operators would see an increase in drive-thru sales."

The bottom line

From the outset of the project, Thorntons took a "hard-dollars" approach to measuring success.

"The kiosk system is viewed as a substitute for one-half of an order-point employee during 12 hours each day," chief financial officer Chris Kamer said. "The cost savings were easily quantified and available."

The average hourly cost of a clerk is $10.20, he said, based on average hourly wages of $8 plus the company's overhead of $2.20 per hour. The company spends $15,000 to install three kiosks at each site. At that rate, it takes 245 days for the store's kiosk program to pay for itself.

"With such a short payback period, Thorntons is realizing a significant return on its investment," he said. "The annual cost savings is $22,338 (per location), which equates to an ROI of 149 percent, based on the $15,000 investment."

Those numbers are powerful enough, but Kamer acknowledges a number of "soft advantages" that are not so easily measured, like improved upselling, branding, management of order-delivery times, reduced signage costs, improved food-inventory control and competitive differentiation.

"If the full value of these advantages were considered, the number of days to break even would be even less than 245," he said.

A success by anybody's standards

Thorntons' success with foodservice kiosks comes at an interesting time. A recent feature in the Chicago Tribune practically heralded the death of self-service ordering in quick-serve restaurants, quoting a McDonald's executive who said it is "not a major priority in the U.S."

But rumors of its death are not only premature but also unfortunate. Kamer boasts a lengthy list of benefits the kiosks have generated, including reduced personnel, increased food quality because of an increased team focus on preparation, and reduced customer-wait times.

And then there is that little matter of the money: Kamer said Thorntons saw an immediate 25 percent increase in sales and profits, which will only snowball over time as the brand grows.

If the numbers aren't enough, consider this wisdom from the mouth of a child: Kamer recently overheard a young girl traveling with her family from Pennsylvania in one of his stores, exclaim, "Look, Mom, just like Sheetz back home."

About James Bickers

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