Strategic CIO // IT Strategy
Commentary
6/11/2014
09:35 AM
David Wagner
David Wagner
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Restaurants' Switch To Tablets Is Trouble

Tablets and self-service are the next big thing in restaurants. But is it a good idea?

Casual dining restaurants, including Chili's and Applebee's, will be rolling out new self-service kiosks using tablets in the next few months. The tablets will allow customers to order food, call their servers, and pay their checks without needing to interact with a human.

Preliminary tests show that such kiosks will improve revenue and table turnover while increasing customer satisfaction. But past experience with such kiosks in other industries is mixed, and restaurants should beware. Putting aside that it seems as if all this does is turn table service into fast food, CIOs looking to jump into this technology need to follow some rules to avoid major mistakes.

Before we talk about it, here is a home video of the menus in action:

As you can see, the tablets are interactive menus making use of a lot of images (though no video yet) to entice buyers into appetizers, drinks, and other "upsell" items. In addition, the tablets feature entertainment and a way to pay your bill. And we can only assume advertising will soon be on its way.

Clearly, this will eliminate some customer service problems common in restaurants. Who hasn't been ready to leave, then sat for 10 minutes waiting for the check? Who hasn't needed ketchup or a refill and suddenly the server is AWOL? Splitting checks and even figuring the tip is now easier as well.

And from the point of view of the restaurant there are obvious benefits including quicker turnover, more efficient use of staff (read: layoffs), better inventory management, better kitchen management, easier POS integration into other systems, and increased revenue opportunities via payments for game and ad placement and upselling.

Sounds like a win-win, and we've seen other success stories with kiosks like these, including ATMs and self check-in at airports. Airlines particularly have seen great savings from self check-in, reducing check-in costs to 5% of what they were before self-service.

Except there's a problem. We've also seen self-service that looked like a similar bargain turn out poorly for other industries, especially grocery stores. Self-service check-out in grocery stores is an especially good example, because they more closely resemble the transactions of a restaurant than an airline. An airline check-in is a straightforward, repeatable set of operations: identify guest, identify itinerary, offer upgrades, accept payment for extras, and direct the guest to security or to check bags.

In a grocery setting, the number and type of items is more complex. There are physical objects to be manipulated, coupons to be scanned, and sometimes physical money in the transaction. Similarly, with restaurants, the varying

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David has been writing on business and technology for over 10 years and was most recently Managing Editor at Enterpriseefficiency.com. Before that he was an Assistant Editor at MIT Sloan Management Review, where he covered a wide range of business topics including IT, ... View Full Bio
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David Wagner
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David Wagner,
User Rank: Strategist
6/11/2014 | 1:58:26 PM
Re: Love paying this way, hate ordering
@jastro- Ha! My least favorite are round objects or bottles or cans that are molded into shapes. The bar code never scans. And unlike someone who does it professionally, I don't have the experience to learn all the angles and tricks. 

Grocery stores have been experimenting with ways to checkout a whole cart at once (RFID tags would be one way). that is the kind of user experience that makes it worth it to the customer.
jastroff
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jastroff,
User Rank: Ninja
6/11/2014 | 1:55:18 PM
Re: Love paying this way, hate ordering
@dave - all good points! My local <fill in the blank drugstore chain> only has self-checkout. I so enjoy paying inflated prices for stuff I have to bag and lug myself. You must have been next to me at the <fill in the blank national grocery chain> when my fruit and veg purchases didn't register in the auto checkout aisle, and I was presented with a video display of fruit and veg pics. The self-check out is ok for things which are already coded with an item number, but otherwise they make me scream.
David Wagner
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David Wagner,
User Rank: Strategist
6/11/2014 | 1:17:02 PM
Re: Love paying this way, hate ordering
@TerryB- You are right. Tips will go down if they only become food runners. Plus, there will be fewer jobs. And unlike in IT when you free up time by doing things like moving into the cloud, you can;t say things like "we're freeing people up to innovate."
David Wagner
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David Wagner,
User Rank: Strategist
6/11/2014 | 1:15:06 PM
Re: Love paying this way, hate ordering
@michelle- You are right. Check-in is a place you see it a lot. I'm surprised more restuarants haven't tried computerized (especially mobile) call-ahead seating and reservations with the success of Open Table. 

The thing that distrubs me most about self check-in is that check-in is the moment you most want to see a face. You are likely to have the most questions. You want a sense that a person knows you are there. 

Still, I can see why it is the most labor intensive and most devoid of revenue gaining opportunities, that I can see how it is tempting.
TerryB
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TerryB,
User Rank: Ninja
6/11/2014 | 1:03:31 PM
Re: Love paying this way, hate ordering
Chili's must have been testing these for awhile because I used one of these at the one in Green Bay where I live. We had a server, I'm pretty sure we placed our order with server but I did pay for meal using the device, was curious how well it worked.

I can see the appeal to Chili's, getting kids of customers to pay for games while they wait. But I remember thinking at time what impact it would have on the server's tips.

Kind of like a buffet place like Golden Corral, do you tip the person who comes by and says to let them know if you need anything? Since I never have that person do anything for me, I never leave tip. Not that I could anyway, you already pay when you come in and all I ever carry is debit card anymore. I see this same thing happening to restaurants who go this self serve route, devalues what you were tipping for.
Michelle
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Michelle,
User Rank: Strategist
6/11/2014 | 12:50:42 PM
Re: Love paying this way, hate ordering
I haven't seen tablets for restaurant ordering & checkout locally but I am starting to see them as a check-in device in other places (health clinics, car repair, site-to-store merchandise pick up). I'm not impressed with the deployments I've seen thus far.

I'm afraid we're going to see more tech for tech's sake. David brings up a great point about aging operating systems and messy hardware over time. I have used self-checkout machines at the grocery store and they aren't wonderful. I fear the at table devices will not be a great addition to casual dining.
David Wagner
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David Wagner,
User Rank: Strategist
6/11/2014 | 12:46:54 PM
Re: Love paying this way, hate ordering
The worst part of this might be that I thought "robot repair tech" and "server" were going to be the last two jobs on earth. I guess "robot repair tech" is goign to stand alone.
David Wagner
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David Wagner,
User Rank: Strategist
6/11/2014 | 12:45:01 PM
Re: Love paying this way, hate ordering
Agreed about the customer. I'm just wondering what the point of going to a table service restaurant is if you get no table service. 

I assume what is going to happen in the restaurant industry is what we're going to see in university education industry soon-- a stratified system where only the wealthy can afford personal service and face to face education and the poor will watch levtures on the internet. 

We might be left with "Fancy" restaurants and "fast food" which gets extended to mid-tier restaurants that currently have servers.
Lorna Garey
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Lorna Garey,
User Rank: Author
6/11/2014 | 12:33:14 PM
Re: Love paying this way, hate ordering
Well, I doubt this concept will ever get into really nice restaurants. But for a casual place where your objective is to get in and out quickly with minimum grief? I can see it. Already Legal Seafoods in the Boston area uses tablets for checkout. 

Seems like the objective needs to be: What is the easiest thing FOR THE CUSTOMER. Not tech for tech's sake. 
David Wagner
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David Wagner,
User Rank: Strategist
6/11/2014 | 12:17:49 PM
Re: Love paying this way, hate ordering
@Lorna- Seems fair enough. Though aren't you really just asking for a little bell like they have on Downton Abbey? Seems like a lot of money and IT trouble for that. 

Personally, I think this is either an all human or all self-service thing. Either you want to be about true service and a perosnal experience or you want it to be a fast food experience with a sticky table surrounding by fake antiques. 
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