October 09, 2009

'Holy Grail' Nearing Local Grill: Food-Order Kiosks Rolling Out

Some splash news on new deli order terminals installed in Metro Silver Diners. Also mentions 70 in Subway.

Posted 10/08/2009 07:31 PM ET

Metro Silver Diners in Maryland and Virginia use Nextep kiosks. View Enlarged Image

The next time you're asked "Do you want fries with that?" the asker might be a robot.

The restaurant industry is widely expected to be the next big market for consumer self-service technology. After years of testing, quick-service, deli and casual restaurants are starting to deploy order-taking kiosks.

Food-ordering kiosks are viewed by many in the restaurant field as the Holy Grail, says Thomas "Tommy" Woycik, president of kiosk maker Nextep Systems. "The potential is absolutely huge," he said, "but the current penetration is still very low."

Nextep has supplied about 70 self-order kiosks for Subway sandwich shops, which are testing the technology. The chain has some 30,000 locations in more than 90 countries.

"The potential for this technology is much larger than for a lot of the other self-service markets, such as self-check-in at the airport," Woycik said. "There are far fewer airports than there are Subways or Starbucks or McDonald's."

2.56 Million Kiosks By 2014

Big quick-serve and fast-casual sandwich restaurants have been testing self-ordering kiosks — computerized machines, or robots — for about five years. The technology has improved greatly since then, so the chains are closer to wide-scale rollouts, Woycik says.

Food-ordering kiosks are part of the bigger shift toward consumer self-service.

The number of self-service kiosks worldwide is expected to jump to 2.56 million in 2014 from just over 1 million this year, a compound annual growth rate of nearly 19%, says Larry Fisher, an analyst at NextGen Research. The top kiosk applications this year are entertainment, retail and travel.

Leading quick-serve restaurants are considering large-scale deployments of food-ordering kiosks starting next year, Fisher says.

Woycik says the benefits of self-ordering kiosks in restaurants are clear. Sales typically rise 20% to 30%, he says. The hike comes from suggestive upselling and the ability to fulfill more orders at peak times.

"A kiosk can consistently outperform an employee at upselling," Woycik said. "You know, 'Would you like to add fries with that? Would you like bacon on your sandwich?' That type of stuff."

Why? The appetizing pictures on the kiosk display, for one. Seeing crispy bacon on a sandwich or a frosty ice cream cone on the screen works better than words alone.

Also, consumers have a natural inclination to say "no" when they feel they're being upsold by a person, Woycik says.

Plus, by automating the ordering process, the same number of employees can fulfill more orders at peak periods, Woycik says. The kiosks keep the line moving, eliminating walk-aways. "Throughput is increased 10% to 20%, easily, during peak periods," he said. Employees who normally work the register can be put to work filling orders.

Posted by staff at October 9, 2009 11:09 AM