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April 15, 2019

4 reasons why your HoReCa business needs self-service kiosks and 3 ways to get them

With the rise of the omnichannel era, companies usually associated with offline services like hotels, cafes and restaurants have begun to enter into the world of new technologies. Self-service is one of the main drivers of this revolution, boosting sales and customer satisfaction, whilst  decreasing costs at the same time.



This trend hasn’t gone unnoticed. As the 2019 PYMNTS Retail Innovation Readiness Index states, 80% of food services providers see technical innovations as a competitive advantage. Interactive, self service kiosks are one of the main drivers of innovation and a relatively easy way to surf on the tech-wave that is currently going through the HoReCa industry.

According to the Transparency Market Research 2018 report, interactive kiosks are going to witness an annual growth rate of 7% each year to reach an astonishing $120 bln in 2026. The technology is widely seen in large restaurant chains with McDonalds being a trail-blazer and launching kiosks in 2015. The competition followed up, with AmRest, the CEE leader of QSR operators launching self-service kiosks in Kentucky Fried Chicken (KFC) restaurants in 2017.

There are at least two ways in which these kiosks are unique.

1. The rise of the self-service nation

 Self-service kiosks are a clear manifestation of the paradox hidden within the modern society - although the users are constantly engaged in social media and haunted with the Fear of Missing Out (FOMO), many users look for ways to avoid social interactions. According to the Ryan Buell’s research at Harvard Business School, many customers prefer tapping on the touchscreen over interacting with human staff. The younger the customer, the less willing to talk to a human he or she is. The people who “don’t like interacting with cashiers” make up 12% of Baby Boomers, 20% of Millennials and over 50% of Gen Z.

2. The boost of customer satisfaction      

Forcing the client to do things he or she doesn’t like is never a good idea, thus interactive self-service kiosks significantly boost the customer satisfaction. Apart from reducing the unwanted interactions with the staff, kiosks reduce total order time by 40%, effectively cutting the queues and improving the overall customer service quality. According the 2019 survey done by the IoT company, a better experience is reported by up to 76% of customers using kiosks

Moreover, in the dynamic world of the HoReCa business every improvement  to the speed of service speed is a competitive gain - as the Kellogs School of Management notes, even a 7 second reduction in service time boosts the company’s market share by up to 3%.

3. Sales rising with self-service kiosks

Contrary to the professional sellers intuition, interactive kiosks with no aggressive upselling techniques (would you like to buy some fries with that?) actually boost sales. There are at least three reasons that contribute to this effect.

  • Users avoid being judged for their eating habits - with the rising pressure for having a perfect body, customers start feeling uncomfortable when ordering certain types of food. The same situation applies when the client orders food based on a strict diet, like a vegan one. The luxury of not being judged is definitely works in this context.
  • There is less pressure than from real people - customers have numerous questions or just simply don’t know the menu. An interactive kiosk never gets bored or annoyed by repetitive questions, so the customer may spend more time discovering the menu.
  • Interacting with the kiosk is fun - due to the work of numerous UX experts, the interaction with the kiosk is a pleasure, resembling the best online stores. Young customers are used to shopping in this way, so it is intuitive for them and they feel no confusion or stress during the process.

Due to the reasons mentioned above, various brands report an increase of up to 30% in check uprise when enabling the customers to use self-service kiosks.

4. Gather insight about customers

Data is the fuel of the modern business, with 79% of enterprise executives believing that companies that don’t embrace big data will face extinction. Contrary to the sales assistant, the digital kiosk collects all the information about the customer. The kiosk records  information about browsed products and the most effective up-sell and cross-sell initiatives.     

So how do you empower your HoReCa business with the kiosk?

Companies willing to leverage the benefits of self-service kiosks have at least three ways to go, each having its own strengths and weaknesses.

Path one: Burn the old infrastructure to the ground and build a new one

The digitalization of the business processes is in fact not a new trend, with many POS systems powering  HoReCa business’ having deep roots in text interfaces and antiquated legacy tech. Considering the existing solutions are riddled with discrepancies, the best way to leverage all the benefits of digital kiosks powered by a modern, cloud-based solution is to nuke the old tech without any sentiment. 

Yet even without the sentiment, the process is painful and complicated and all of the data needs to be migrated, sometimes after the thorny process of integration. All the hardware needs to be scrapped and replaced with a brand-new, cloud-enabled one.

The results are a marvel to behold - the new system is cloud-based with all the sub-systems used (kiosk, POS, kitchen displays, delivery terminals etc.) being various interfaces of a single app. The system is delivered with a backup and redundancy system to keep it operational even when the net connection goes down.

But in fact,  total cleansing is rarely possible or affordable. That’s before mentioning the need to retrain all the staff, from regional manager to the trainee?

Path two: Manual integration with the existing POS system

Sometimes the sturdy way is the best one. Contrary to a total replacement, manual integration is the easiest and the fastest way to implement the digital kiosk into the company’s ecosystem. Or, at least, to put one into the restaurant without any further IT integration.

In this approach the kiosk has a separate display in the kitchen, that is informing the staff about the orders. And sometimes - that’s all. The kiosk may be integrated with the payment system, but it is not required. The orders can be manually re-entered into the main POS terminal one after another, thus adding them to the kitchen queue. Otherwise, after  closing, someone needs to manually enter the data from kiosks into the company’s core applications to keep the books in order.

It is not as elegant and effective as it could be. It is obviously less time efficient and not as sophisticated as the full-scale implementation, but it gives the customers an innovative and convenient way to place orders and boosts the customer experience. Meanwhile, it is a cost-effective way to check if the virtual kiosks are the right direction for the company and to polish the business processes involving new tools.

Considering that, it is sometimes worth the effort. 

Path three: augmenting the POS system with a web integration center

The third way is in fact in the middle of the two mentioned previously. It combines the flexibility and tech-empowerment given by the full digital kiosk whilst leveraging most of the advantages of keeping the current POS system.

This implementation is achieved by establishing a parallel system integrated by API with the product database and ordering system. With this solution, the kiosk is queued in the kitchen display in the same way as an order done with the POS. There is no need to transfer the information about the menu to the kiosk or the sales report from the kiosk to the central system. Most of the dirty work is done automatically, while the rest of the business processes remain unchanged. 

Whilst system is not as sophisticated as a full-scale redesign and cloud migration,  it is good enough to power the company for at least next few years. In this version kiosks and POS integrate with the cloud-based management center and exchange the information regarding orders, payments and all statistics regarding the business performance.

This middle ground combines the best of both worlds by leveraging existing systems and empowering the business with the latest tech. For further enhancement of the business processes, the company can integrate third-party ordering and web or mobile apps, if the system lacked such capabilities.

Conclusion

Digital kiosks are an innovative way to build a competitive advantage and improve the customer experience. The tech trends clearly show that digital kiosks are becoming a must-have in the HoReCa business and companies that don’t embrace this technology will be left behind.



Author:
Leszek Olszanski, IT journalist, consultant and educator at 3e Software House. 20 years in the IT and media industry



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