This article originally published in Self-Service World magazine, May 2007.
An ivory Lexus pulled up to a self-order drive-thru kiosk at a Subway restaurant — and rolled three feet beyond the driver's reach of the order screen.Consultant Francie Mendelsohn, president of Summit Research Associates, was observing how customers used the new kiosk and wondered if the lady behind the wheel simply was nearsighted or about to become the butt of a "woman driver" joke.
But when a young boy inside the car rolled down the rear-side window, the scene made perfect sense.
"He was placing his family's order," she said. "You could tell it was a big thrill for him. The guy who owns the franchise said kids love to do that."
Apparently their parents are fond of it, too, as more self-service kiosks are debuting to high marks in a wide variety of foodservice operations. After decades of trial and error, quick-service restaurateurs are seeing an operational dream come true: machines that are garnering above-normal check averages, process orders faster than humans and don't forget to upsell. Once customers start using self-order terminals, operators say they almost never return to the counter.
"Language barriers go away. There's no more, ‘I didn't order that,' because they build the [order] themselves," said Steve Gregorie, vice president of marketing and customer experience at software developer ProTech. "In a drive-thru setting, the squawk box is gone."
But despite all the promise of self-service kiosks, their march into the foodservice industry has been a slog. Early solutions — some tried as early as the 1980s — couldn't match the experience customers got at the counter, so few used them.
And as always with new technology, cost today is a killer as new units in this nascent niche largely are originals. Custom stand-alone kiosks can run $25,000 each, while countertop touchscreen models are about two-thirds less — still a high price when busy restaurants and c-stores require two to three self-order points. (Some kiosk providers are considering leasing and fee-per-transaction payment models to reduce costs.)
Integrating with dozens of unique point-of-sale (POS) systems is an enormous challenge for software developers, and the problem is exacerbated in quick-service restaurants where franchisees' POS systems typically differ from the franchisor's. Landing the McDonald's kiosk contract might seem like a dream deal to a salesman, but from a technological standpoint, it's an unnerving consideration.
"When you look at implementing a 30,000-store undertaking like McDonald's … the scale is just staggering," said Tommy Woycik, president of software developer Nextep. "So, let's say I wouldn't expect to see McDonald's go (system wide) with kiosks first. I expect to see a lot of guys with five, 10 or 30 stores to adopt first."
Customer-centered self-service
Quick-service operators long have used entry-level labor to process customer orders, but merely filling those slots with bodies never ensured an optimal customer experience.
 |
| Self-order terminals are popular with consumers old and young and can be used in restaurants of every stripe. (Photo courtesy Summit Research Associates.) |
But as kiosk technology has advanced, labor reductions haven't materialized. Instead, in operations where self-order kiosks are successful, operators require more hands to address the increased volume of orders generated by the rapid-processing machines.
"The (foodservice) industry is not seeing it as a means of labor replacement anymore," said Bob Olson, director of marketing at NextChoice, a kiosk software developer. "It's now trying to redeploy labor by putting people in fulfillment mode."
In the highly interpersonal restaurant industry, leaving the order taking to a machine might sound sterile, but follow-up surveys conducted both by kiosk providers and foodservice operators are proving patrons like kiosks because they're 100-percent customer centered.
Much like Internet ordering, kiosk users like browsing a menu at their own pace. Instead of ordering the No. 3 combo hastily at the counter, customers feel at ease to make special requests of the machine, and research shows customers are more receptive to an upsell pitch from a kiosk than from a human. Perhaps most beneficially, kiosks facilitate that entire process quicker than counterworkers.
Kiosks' ability to upsell has become their selling point as increased check averages translate directly into operator return on investment. Machines always offer menu upgrades and sides, and they're programmed to offer foods tastefully matched to customer choices.
The combination of attractive graphics, animation and ever-changing screens show customers exactly what the items offered look like — a job that can't be replicated quickly on a menu board or vocally by a counterworker.
"On average, we've found a 15-percent-per-ticket increase when customers use kiosks," said Madeline Pantalone, vice president of innovation and market strategies at kiosk vendor EMN8. Other vendors reported similar increases. "We've learned customers don't mind being asked whether they want to upgrade to a combo or if they'd like dessert. We're not upselling by saying, ‘Do you want this. Do you want that?' We're providing options."
Modern kiosks have proven excellent line busters, especially in extraordinary peak volume situations such as at stadiums and airports.
"These are situations where there's extreme volume, even more than you'd see at the busiest restaurant on the street," Woycik said. "In situations where the time problem is exaggerated, when everyone is trying to eat at the same time and in a hurry to catch a plane, kiosks are great."
One of NextChoice's most interesting tests under way is with Dunkin Donuts, where kiosks are used strictly for doughnut orders. Instead of employees being tied up with customers deciding which donuts to pick, they choose their doughy delicacies by touching icons on the kiosk screen. Counterworkers then follow printed tickets to fulfill orders quicker.
"While you've got [one] line selling donuts only, you start to see how many cups of coffee you can sell in the other line," Olson said. "We can't release any numbers, but it's been a dramatic and noticeable difference on sales."
C-stores leading the way
The penetration of self-order kiosks into restaurants has been slow, but they have, by comparison, raced ahead into convenience store chains like Sheetz and Wawa. Self-order kiosks account for nearly 100 percent of all foodservice orders in those operations, according to Chuck Mallory, who oversees consumer-facing solutions for POS provider Radiant Systems.
Between them, Sheetz and Wawa account for more than 800 units, and when outfitted with self-order kiosks, the total number in operation likely exceeds all the self-order kiosks deployed in the entire U.S. restaurant segment. (Neither Sheetz nor Wawa responded to requests for interviews.) At some Sheetz units, customers can order food from a kiosk while pumping gas outside.
| "The [foodservice] industry is not seeing [kiosks] as a means of labor replacement anymore. It's now trying to redeploy labor by putting people in fulfillment mode." — Bob Olson, Director of Marketing, NextChoice |
Nine Thornton's QuickCafé & Markets scattered throughout the Midwest use self-order kiosks, said Tony Harris, the company's vice president of information technology. And while the application didn't succeed in every unit tested, he said the company has learned a lot fast.
"We know now we'll never build another [store] without them," Harris said.
As in quick-service restaurants, check averages in Thornton's SubWorks concept are up because of its kiosks' upselling efforts. "We have seen a significant increase in the sale of combos, of adding extra meat, bacon or cheese to sandwiches, and bumping up small fries to large."
Thornton's is most pleased with how the units improved store-level labor efficiency. Employees aren't chained to the kitchen makeline waiting for orders; they move about the store and attend to other tasks during slower periods.
"They can be taking inventory or on the floor stocking, but the moment an order hits the kitchen screen, a pager vibrates and they have to go to the kitchen and make it," he said. "For us to have someone standing in the window to take orders 24/7, when we may not have customers in the store, didn't work."
Slow growth for now
For all its clear virtues, the spread of the modern self-order kiosks throughout the foodservice industry — especially in quick-service restaurants — will be slow for the foreseeable future.
The shortage of all-in-one solutions on the market makes operators hesitant to get involved with multiple vendors. End-users want one point of contact for both hardware and software purchases, and one source to talk to when troubleshooting.
To maximize efficiency, operators demand integration with their POS systems, but with so many POS brands on the market, assimilation with all of them is a colossal challenge, Mallory said. "If you want to do a kiosk rollout with a large company that may have 20 different POS systems in operation, the technical, brute-force effort to do the integration is huge."
Real-time communication between the kitchen management system and kiosks will be essential when Popeyes Louisiana Kitchen runs another kiosk trial in its upcoming second store. Tim Davis, chief information officer for Popeyes Chicken & Biscuits, which owns the new fast-casual Kitchen concept, said problems arose when the prototype store ran out of items counterworkers knew about, but the kiosk didn't.
"With cashiers, you just tell them we've 86'd something. But it's not as easy with a self-service kiosk to turn those things off," he said. "If you're in the middle of a lunch hour and running out of things, it gets a little sticky."
Kiosks also can create the mixed blessing of traffic congestion inside restaurants designed initially to accommodate lines of customers flowing from the counter. New queues caused problems when Jack in the Box launched its first kiosk tests.
"In one of our restaurants, we had three units all between the main door and the counter, and we had some traffic congestion because two queues kept backing into each other," said Michael Verdesca, the burger chain's director of point-of-sale systems. "In restaurants where it fits, we've been trying to put kiosks on the counter so they don't cause that congestion."
Jim Melvin, chief technology officer of PAR Technology Corp., believes some of kiosks' growth in foodservice will center on increased multifunctionality. He said they must do more than take orders; they need to sell merchandise, manage seating in casual-dining restaurants and facilitate loyalty, gift-card and coupon programs.
Customers must adapt to change
But even the most effective kiosk design is worthless if guests don't use them, and that forces operators to train patrons. Placing a kiosk in the corner and expecting customers to gravitate toward it "is not realistic," Mallory said. "It takes a sustained effort with greeters suggesting to people standing in line to come use the machine."
Sometimes it takes incentives, such as a free dessert or soft drink, operators said, and point-of-purchase materials help, too. Other times it's a matter of targeting the right customer, such as computer-savvy members of Generations X and Y, but as Gregorie related, no customer should be overlooked.
"Once (during a launch), I saw an older couple walk up to the kiosk," he said. "I started walking them through it and got to about the third screen before the woman nicely pulled my hand down and took over."
Don Turner, chief executive and president of ProTech, said encouraging kiosk use is a matter of addressing the need for the machine rather than figuring out who wants it.
"The way you get people to adapt to new technology is to give them a very easy remedy to a very real pain," he said. "The pain for customers is this: lines and waiting. We're in a fast, fast, fast, me, me, me, now, now, now world, and to be successful, the self-service industry has to feed and ride that trend."
