December 16, 2019 Help Yourself: Why Self Service Dining is on the Rise, and What’s Next
A DIY revolution is underway in the foodservice business. Customers are taking control of their dining experience: from placing orders on kiosks and apps, to paying their bill on their time – no waiting on a real, live waiter or cashier.
What’s behind this rise in self service dining? And has it peaked, or will we bring more machines and technology to the table? We set out to find the answers, starting with a look back at what sparked the original self service dining revolution: the drive-through.
The Perfect Storm for the Rise of Self Service Dining: Increased Customer Demands for Convenience and Rising Labor Costs
You can’t talk about self service dining today without recognizing its fast food origins. So, let’s take it back to the 1960s when the arrival of drive-through windows blew minds across America.
Previously, customers would drive into a Wendy’s or In-n-Out Burger, order via an intercom, and then wait as a “carhop” employee ran (or roller skated) out with their order.
However, just as is the case today, people wanted their food faster and operators were looking to cut costs on the carhops needed to deliver food. That’s when the drive-through window came on the scene.
The same two variables – of consumer cravings for convenience and mounting labor costs (driven largely by the rising minimum wage) – are spurring another round of self service dining innovation today.
It’s not just rising labor costs, but astounding turnover in the restaurant industry that’s behind the rapid adaptation of self service dining. Panera recently reported employee turnover rates of 100%, which may explain why their self order and pay kiosks are front and center in every location.
Caviar, Champagne, and Tablets? The Benefits of Self Service Dining Transcend Quick Service and Fast Casual
In addition to fast casual restaurants like Panera, quick service operations – from McDonald’s to Shake Shack – are going all in for self service dining kiosks. Adaptation at full service and fine dining venues is happening, but at a slower pace.
One of the most striking examples of upscale self service dining, or should we say drinking, is the rise of the Enomatic Wine Dispenser in New York City restaurants.
The Enomatic is basically a large vending machine for upscale wines. Patrons purchase a card preloaded with their desired dollar amount, then select their wine, press a button, and watch it pour into their glass from the machine. It’s proof that self service dining can fit into any kind of restaurant concept.
Self service dining tablets are also making their way into full service and fine dining operations. More discreet than a large table-mounted kiosk, handheld tablets are doubling as digital menus and even payment devices.
With integrated readers that can process chip credit cards and NFC transactions (such as Apple and Samsung Pay), these self service dining tablets are catching on at more sophisticated eateries nationwide.
In fact, tableside payment – made possible through self service dining tablets – is in high demand by today’s customers. In a recent survey by TYSYS, an international payment company, it was revealed that 79% of patrons prefer pay-at-the-table solutions. Customers cite the convenience factor, as well as the increased security that comes with their credit card or financial data never leaving the table.
The benefits of self service dining tablets extend to a restaurant’s bottom line as well. Customers can pull up their bill, securely pay, and leave whenever they’re ready – instead of flagging down a server. So tables tend to turn faster. Some tablets even let guests send orders to the kitchen.
The more customers call the shots using self service dining tablets, the lighter the load on waitstaff. They’re freed to cover more tables, and spend more time bonding with customers – rather than running payment to the POS and back. It seems that by adding technology, you’re not always decreasing human interaction. You just might be enhancing it.
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Compared to Face-to-Face Ordering, Sales and Customer Satisfaction Soar with Self Service Dining…But Resistance Persists
Let the machine work its magic. That’s what proponents of self service dining advise skeptical restaurant owners, many of whom believe a human can take better care of a customer and upsell better than a kiosk or tablet, despite evidence proving otherwise.
Restaurant operator and owner resistance to self service dining mirrors the reaction many have when faced with computers taking over tasks previously left in human hands – like driving and surgery.
Consider the self-driving Tesla. When the vehicle is on Autopilot, there is an average of one accident per 2.87 million miles driven. When humans are in control? There’s a crash every 436,000 miles. Evidence and logic would suggest we should all want to drive a Tesla. So, what’s stopping us?
The same thing that’s preventing many restaurant owners from embracing self service dining. Handing over control to a machine feels threatening, even though it offers benefits of increased sales for restaurants – and higher satisfaction for customers. Plus, many restaurants protest the removal of the “human” element from the ordering experience.
Yet, that’s exactly what customers want according to the following studies noted in a Harvard Business Review article.
In 2015, Taco Bell launched self service dining. They let customers order through a digital app, instead of with a human cashier. Orders were 20% larger when made on the app.
Over at McDonald’s, thanks to their self service dining kiosks, check sizes were 30% larger and another interesting trend emerged. If the customer did not order a drink, the kiosk automatically asked the customer if they’d like one: 1 in 5 customers added that drink.
Experts believe that upselling success rate is due to the removal of human error. Humans can feel uncomfortable with upselling, and may avoid it. Machines don’t care – and are programmed to always make the ask.
There are other factors at work in the ability of self service dining to generate more revenue. Are people more comfortable placing indulgent orders – like four Taco Bell soft tacos with extra cheese – on an app instead of with a person who might judge them? Perhaps.
Or, maybe customers feel they can take their time with self service dining kiosks, really exploring the McDonald’s menu without the watchful, waiting eyes of a cashier on them.
It may be simpler than that: people may just prefer not talking to other people. That’s especially true with millennials and Gen Z (and research proves it). If they can use self service dining to order their meal and pay, with minimal human interaction…that’s a good thing in their opinion.
Creepy or Catering to the Customer? Self Service Dining Gets REALLY Personal Thanks to Artificial Intelligence (A)
Even though the younger generations may avoid actually speaking with a human whenever possible, they still expect their dining and retail experiences to be personal.
For example, research shows that millennials want custom coupons and offers. They want to feel like brands and businesses are catering to their individual, unique preferences. And they really don’t care if artificial intelligence is doing all the work, not a human.
This desire for a hyper-personalized experience is inspiring a new level of innovation in self service dining that some find intrusive. Just look to the integration of AI and facial recognition into kiosks. Across the world, ambitious startups are focusing on developing kiosks with cameras that can “read” facial features expressions, and provide recommendations based on mood, age, gender, and more. The frightening thing for privacy advocates is that right now, it’s the wild west – regulating entities are playing “catch up” and chasing after the rapid release of new AI and facial recognition.
Sure, cities like Portland and San Francisco are putting limitations on facial recognition technology. But most experts predict facial recognition will become mainstream in the next decade or so, igniting privacy debates.
More benign examples of AI at work in the foodservice biz are kiosks and digital signage at McDonald’s that recommend menu items based on current weather. On hot, sunny days, refreshing salads, drinks, and desserts may be offered. On cold winter days, comfort food add-ons like Apple Pie and gourmet coffee will be suggested.
It’s a paradox, really. The more machine learning, AI, and other technologies are involved in self service dining, the more personal and customer-focused the experience can become – for the end user. But what about restaurant professionals, waitstaff, bartenders, owners, consultants, and distributors? How do they fit into this new self service world? Only time will tell…