Commentary

As restaurants embrace self-order kiosks, remember the pioneers that led the way

QSRs and fast casual restaurants are deploying self-order kiosks at a rapid pace. A handful of leaders who led the way beginning in 2016 deserve much of the credit.

Photo courtesy of Johnny Rockets.

February 4, 2019 by Michael Kasavana — Consultant, K-Team

Quick-serve and fast casual restaurants have been embracing self-service kiosks over the last two years, and the pace has been gaining momentum. As I noted in a blog at the end of 2018, we are fast approaching the “tipping point,” the point in time where companies decide they have to invest in a new technology to remain competitive.

Given the progress that convenience dining has made with self-service technology, I think it's only fitting to recognize the pioneers that led the charge in this space.

Panera Bread

In 2016, Panera Bread implemented kiosks in its restaurants as part of its Panera 2.0 initiative. In addition to kiosks, technology components included mobile and online ordering applications. Overall, Panera 2.0 is an investment in integrated end-to-end customer facing technologies that go beyond a basic mobile-payment system or digital-ordering process.

The stated objectives of this Panera 2.0 initiative are a reduction in wait times, improved order accuracy and minimized or eliminated customer crowding. In essence, kiosks are at the center of the company's digital evolution, which freed counter-based cashiers to become interactive customer service representatives.

Johnny Rockets

Johnny Rockets launched a brand refresh initiative in 2016 that involved moving from its traditional diner roots to a modern design enabling an improved customer experience. The effort included a pilot test of digital technologies that would allow quicker service while maintaining consistent product quality.

Self-order kiosks have proven to be a value-added technology to Johnny Rockets. Management claims that a well-integrated solution can improve operations and positively enhance the guest experience with relatively inexpensive technology that provides an additional ordering channel.

McDonald's

In 2017 McDonald's unveiled a long-term global growth plan that included enhancing its digital capabilities through the implementation of customer-facing technology to elevate customer experience. The initiative, labeled “Experience of the Future,” leverages kiosk ordering and table service to create a more typical restaurant environment.

Customers can place an order at the kiosk, then take a seat and the food will be brought to the table. Additionally, customers will soon be able to place orders via mobile app for pickup or use the kiosk to access a personal profile that stores customized favorites and preferred method of payment.

McDonald's plans to have a majority of the its free-standing stores modernized to reflect the “Experience of the Future” by the end of 2020.

McDonald's restaurants that have deployed self-order kiosks are reported to have captured average sales increases of approximately 5 percent.

Wendy's

Wendy's has stated its motivation for technology initiatives is two pronged: sales increases and labor cost reductions. The goal of Wendy's digital initiative is to enhance brand relevance, build customer loyalty and support operational efficiencies.

The company has reported that three kiosks cost between $12,000 and $15,000, with a return on investment of less than two years. It is the company's opinion that kiosks are preferred by most customers and help to expand kitchen capacity while serving as a gateway to mobile applications.

Dunkin' Donuts

Dunkin' Donuts' introduced its "next generation concept store" in Quincy, Massachusetts, in January 2018 on the site of its first store almost 70 years ago. Dunkin' Donuts' "next generation concept store" features self-serve kiosks, along with an exclusive mobile order drive-thru. With fully-integrated digital kiosks guests can choose to order with or without the help of a crew member.

The company has also introduced an area dedicated to mobile pickups, so that members of the DD Perks Rewards program who order ahead via Dunkin's mobile app can get in and out of the restaurant faster. Guests will be able to track the status of their orders placed for pickup inside the restaurant via a new digital order status board.

Other notables

In addition to the visible brands noted above, other chains have entered the fray.

Pizza Pie Café, a 17-unit chain based in Lehi, Utah, installed kiosks in an effort to appeal to a broader clientele and improve customer experience. In 2015, the company reported a significant return on investment from its mobile offers and loyalty kiosks. Impactful components included mobile coupons, text messaging and loyalty initiatives that accounted for nearly 28 percent of sales. For example, of the 16,000 loyalty points accumulated during one campaign, customers redeemed 12,000 of those points.

23rd Street Café & Market in Chicago deployed self-order kiosks to assist in meeting challenges frequently faced at highly trafficked venues with sufficient scale to effectively manage costs during slow periods.

The benefits of self-order kiosks aren't exclusive to commercial foodservice establishments.

A sizable percentage of corporate dining operators are moving to self-order kiosks as a way to manage high volume (employee) break times. Customer wait times have been reduced by as much as 50 percent with increased average spending of 12 to 14 percent.

The increased implementation of self-order kiosks/tablet comes as no surprise to practitioners within the restaurant industry. Despite the fact that devices have been installed in numerous restaurant locations, it remains to be seen exactly how prevalent they may be deployed.

QSRs tend to focus on convenience and customers typically are loyal to a preferred brand. As a result, management tends to seek a solution that enhances the dining experience without disrupting what's familiar and likable. In addition to order entry functions, kiosk/tablet apps often include loyalty tracking, customized ordering and in-house guest surveys.

Unfortunately, to many industry observers the rise of restaurant kiosks/tablet implies staffing positions will be eliminated. Simply stated, kiosks/tablets are not intended to replace workers. This has not been the case. In fact, self-order devices present consumers with more choices and thereby may initiate greater interaction with staff members. Industry observers note that staffing levels often don't change with kiosk/tablet deployments; instead, staffers are reallocated to better serve consumers. Sometimes, kiosks actually lead to employment increases as restaurants strive to maintain service levels with increased sales.