September 07, 2010

Quick-service-restaurant kiosks: What’s taking so long?

Kelso of QSRWeb article what is taking so long in QSR given success of Jack In The Box. Interviews Tommy Woycik of NEXTEP, Joe Stein of El Pollo Loco, and Brian Luscomb of Jack In The Box.

Quick-service-restaurant kiosks: What’s taking so long? | KioskMarketplace

Alicia Kelso editor, • 07 Sep 2010

By now, it’s almost a given that self-service kiosks have a place at the quick-service restaurant (QSR) table. But whether or not it’s at the head of the table or in a child-booster seat remains to be seen.

This concept has been discussed at least since 2006, when Subway, McDonald’s, Burger King and Arby’s began trying out kiosk systems, which allow customers to place and pay for orders themselves through a touch screen device.

And other chains have added kiosks here and there, but there hasn’t necessarily been an explosion as many predicted.

According to Tommy Woycik, president of kiosk supplier NEXTEP Systems, the restaurant industry is a bit of an anomaly. There has been an explosion in kiosk deployments in airports, grocery stores and casinos, but in restaurants, kiosks have “just sort of trickled into place,” he says.

“We’ve been doing this for six years, and every year our restaurant revenue has gone up 40 to 50 percent. It’s been good, sure, but it lags a lot behind other industries, which have doubled in that same time,” Woycik said. “We thought it’d be higher at restaurants — both in the fast casual and quick-service segments — but it’s just not at the same rates.”

What’s the holdup? Some companies are apprehensive about intimidating technology-trepid customers. Others might be trigger-shy about the cost of a new system rollout, nervous about obsolescing their workforce, or about compromising customer service.

What is certain is that the United States is behind European and Asian countries in embracing self-service systems by “10 to 12 years,” according to Woycik.

“It’s not that customers aren’t ready. This trend is evident in other industries, and people love it. They’d much rather self-serve than wait in line,” he said. “The biggest issue is restaurants worrying it impersonalizes customer service. But two-thirds of their business goes through the drive-thru, an experience that minimizes personalization. If I want to focus on customer service, I go to a nice steak house, not a fast food place.”

Woycik acknowledges that adding kiosks is a significant technology undertaking that dramatically changes the operational flow of a restaurant. In addition, the QSR industry is filled with franchisees that oftentimes must wait for the parent company’s blessing to make any changes. That can mean a two-tiered sales approach for kiosk suppliers, slowing down saturation.

“Often only the parent company prescribes what technology can be used. Which is understandable since they’re doing the accounting,” Woycik said.

That leads to a circle of ‘Can I do it?’ to ‘Go ahead but you’re paying for it,’ to ‘But I can’t afford it.’

Still, a number of chains continue to test the self-serve waters.

El Pollo Loco added self-serve kiosks in two California locations this summer and Jack in the Box now has about 230 installed in stores throughout the country. Both companies are supplied by EMN8.

Jack in the Box began testing kiosks in 2006 as part of the company’s strategy to reinvent the brand through innovation in guest services, menu and restaurant facilities. The company has plans in place for kiosk installation at additional locations based on dine-in sales volume and certain demographic information, as well as transaction data.

El Pollo Loco is just starting to get into the game and has no timetable set as to whether or not it will expand its kiosk presence. For now, the company is focused on perfecting the two stores that do have the equipment.

“We expect to make changes to the physical layout of the kiosks, the order screens and other adjustments based on customer feedback from our test in the two initial restaurants,” said Joe Stein, senior vice president of strategy and innovation.

The response to the kiosks has been thumbs-up and thumbs-down.

“We’ve received positive feedback from guests who like the technology, and negative feedback from guests who were initially taken aback by the kiosks in the lobby,” Stein said.

Rest of story

Posted by staff at September 7, 2010 03:26 PM