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Food for Thought: Investing in Restaurant Self-Service Kiosks

Most casual and fast-casual diners are fine with self-service technology; fine dining and quick service – not so much.

By Bisk
Food for Thought: Investing in Restaurant Self-Service Kiosks

Self-service has been gaining traction as a customer service model since the 1920s, when trade magazine The Progressive Grocer began planting ideas for self-service in retailer’s heads.

Today, self-service is ever present. In a world of ATMs, pay-at-the-pump gas stations and self-checkout registers at local retailers, it was only a matter of time before restaurants began to move in that direction as well, replacing old fashioned, face-to-face customer service models with the same high tech, increasingly convenient tools that now reside on the table at your local Chili’s.

This wave of tech integration into a restaurant’s business model differs from the ones that came before it in one significant way: there is no need for machines to replace humans, but rather to create a symbiosis between the two.

Waiters around the country needn’t worry about job security just yet. Self-service restaurant kiosks are not for everyone. According to a report from Gartner’s Software Advice, Millennials overwhelmingly love restaurant self-service kiosks, while 65% of Baby Boomers reject them and more than 40% of Generation X and Y customers are not interested in ordering for themselves. The human element is still necessary to a pleasurable restaurant experience.

The Software Advice survey revealed that the two most preferred restaurant settings to encounter self-service kiosks (both freestanding and table-top) in were casual (45% of respondents) establishments such as Chili’s and fast casual (35% of respondents) places such as Panera Bread.

When it comes to fine dining, 94% of diners do not want self-service, given that they’re paying for a high-end customer experience. More surprisingly, when it comes to quick-service (fast food) diners, 87% lack interest in self-service kiosks.

Patrons prefer to encounter self-service opportunities in certain areas of a restaurant depending on the dining experience. According to the Software Advice report, 88% of diners say that they prefer self-service options to be at the table, versus at the entrance or in line. Casual, sit-down restaurants such as Chili’s have seen restaurant kiosks well received by patrons, as browsing the menu and learning how to use the software on the kiosk takes time.

At quick-service (fast food) establishments, the experience of a kiosk upon entry could be more stress inducing than pleasurable, especially if it creates long wait lines for customers. Quick-service restaurants have also found that it is faster to take orders at the counter than placing them on a self-service kiosk.

This doesn’t mean, however, that self-service is off of the radar for quick-service restaurants. McDonald’s announced in 2014 that it intends to move toward kiosks and mobile ordering in an attempt to keep up with the times and cut labor costs. In 2015, the fast-food chain began implementing kiosks to mixed reviews. The kiosks apparently don’t reach 70% of their diners, many of which are drive-through customers, according to Fortune Magazine.

For casual restaurants, however, table-top technology has become something to consider. Customers are in love with customizing orders, splitting bills and coordinating multiple payments at the table. But there are a number of things for restaurants to take into account before going all in on table-top or any other self-service tech.

Things to Consider Before Implementation

  • Cost – A huge benefit to self-service kiosks is that there is no capital cost for installation, according to Austen Mulinder, CEO of Ziosk, the kiosk used in Chili’s. Subscription costs for kiosk service are also low, as Ziosk generates revenue from premium content such as videos, games and quizzes available for purchase. Implementation costs are often offset by increased sales; research shows customers spend more money by adding items to their orders.
  • Placement – Physical placement of technology plays an important role in successful implementation. Giving your customers what they want isn’t enough; you have to give it to them how and where they want it as well.
  • Customer Satisfaction – According to the National Restaurant Association’s 2015 Restaurant Industry Forecast, around 25% of customers say that technology plays a part in choosing a restaurant. With that in mind, it’s important to balance the human touchpoints that many people still expect to accompany the experience of dining out.
  • Features of Point of Sale (POS) – While the ability to customize orders and use self-payment features are the most commonly talked about factors when considering table-top tech, one aspect often overlooked is the customer’s ability to look at pictures of the food. In the Software Advice survey, 26% of respondents cited this as a feature they enjoy about the self-service kiosks.
  • Security Concerns – Payment versatility is something that benefits both diners and the restaurant. According to Tom Harpootlian, COO of TablePay of America, 44% of credit card fraud originates in the food and beverage industry. Pay-at-the-table opportunities that self-service kiosks present are a great way to reduce credit card fraud, an important caveat for restaurants given Visa and Mastercard’s required move to chip reading sales terminals. EMV (Europay, Mastercard and Visa) technology implementation is quickly becoming the standard after drastic reductions in fraud cases were seen in Europe. Visa and Mastercard have said that fraud liability will be transferred to the retailers themselves in the coming years, making self-service kiosks an attractive commodity for operators looking to reduce potential fraud issues. 
Category: Hospitality