Technology Roundtable: Experts Weigh in on Trends Impacting Canadian Foodservice Operators

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F&H: What are the pros and cons of utilizing cloud POS in restaurants?

Stephen Seymour: Most cloud POS systems are tailored to smaller organizations. It’s rare to find a company that’s invested the time and money required to build a platform capable of handling the complex needs a multi-brand chain organization has. It’s less risky and more profitable to sell a less-capable POS system to the small-business market. The ability to customize the POS platform function is significantly limited in cloud deployments as it is, by nature, multi-tenant and therefore rigid. With on-premise POS, you can stop using it and stop paying for it but still maintain full functionality, including reporting, et cetera. The opposite is true of cloud. Migration away from a cloud provider means you lose access to the platform. Sure, you can get a data dump, but is a data dump what you need to run your business? Do you really want to build a data warehouse for old data so you have it available for that tax audit that comes in five years from now wanting original POS data?

Matt Jenkyns: The debate of cloud-based versus legacy systems will inevitably continue for years. They both offer users the same end result but, in our case, cloud-based eliminates a lot of redundancies. The infamous “back-office PC,” for example, is an additional piece of equipment that requires upkeep and also introduces an added point of failure. For us, access to real-time data from all stores, food trucks and concession stands without another layer of reporting software is a huge priority, as well as the ability to push updates to any system in real-time. Another huge benefit is these systems only run on one software version, which means a consistent user experience and also helps simplify third-party integrations. One of the biggest criticisms of cloud-based systems is you lose the ability for real-time reporting and technical support in the absence of an internet connection. This claim, however, is equally relevant to legacy systems, so it’s difficult to pin this as a con.

Karisa Marra: Most modern businesses use cloud-based tools today. When it comes to cloud-based point-of-sale tools, we routinely hear from the foodservice businesses we partner with about two major benefits. The first is the ability to manage the business from anywhere. Business owners and managers are given freedom to run their business from wherever they need to be using their smartphone or laptop. They can get a handle on sales, staff performance, inventory levels and customer feedback — this is in stark contrast to when business owners and managers had to be at a restaurant seven days a week in order to understand what’s going on from their legacy POS system. Secondly, having affordable access to the latest technology [is important]. For example, Square’s cloud-based POS app is free and businesses always have the latest technology at their fingertips, as software updates happen seamlessly overnight. Whereas legacy POS systems require an up-front investment or monthly rental fees for expensive hardware and added software fees. System changes and ongoing maintenance are often also an added cost.

Graham Campbell: Sales information and data is always syncing with a cloud POS, so if you manage multiple locations, you can get up-to-date information from any location without being physically on-site. There’s no need to worry about backing up the POS data at each location and potentially losing information caused by human error or system crashes. You have uninterrupted records of all your data and history for reports and future analysis.

Cloud also allows for easy patches and upgrades to add new features to your system. And, finally, order accuracy and efficiency are improved through use of tablets/kiosks in restaurant settings and speed and table turnover also see improvement with a synced cloud solution. Servers input orders right at the table, using handheld tablets, and can spend more time servicing guests instead of walking back to fixed POS workstations. This also minimizes order errors.

Challenges include ensuring your cloud POS can still operate even if your internet connection goes down. Transactions during this time should be saved until the POS reconnects with the cloud. Many Cloud POS systems are little more than apps you download from an app store.

You need to buy iPads or other tablets yourself. These are additional costs and this hardware is sometimes not durable enough for the rigors of a foodservice environment and needs to be frequently replaced.

F&H: What business insights do POS apps offer?

KM: All Square tools work together seamlessly, so it’s easy to track sales, employee performance, inventory levels and customer visits from one dashboard, in real time. Foodservice businesses generally have an idea of who their regulars are, which menu items sell fast and when the rush comes, but by tapping into real-time analytics for their business, they get better insight into menu items being purchased the most at certain times of the day or week. You can also view how many of your sales at specific locations come from new versus repeat customers. [This allows operators] to adjust prep levels, minimize waste, maximize staff utility and better serve customers. 

F&H: How has mobile-payment technology changed the foodservice landscape?

Laurent May: Mobile-payment technology has redefined the value of venue-to-guest transactions. What began as a simple monetary exchange for goods and services is now an opportunity for the venue to provide not only a seamless point of payment, but to elevate the guest experience entirely. At Ready, we remove the wait for the check and provide a seamless payment experience, while also giving the guest the option to share a quick review. Our venues can operate at peak capacity in their busiest times, eliminate wait frustration and get visibility on what they’re doing well or what they could improve on, all in real-time.

KM: The aim of any foodservice business is to provide its customers with a great experience from order through to dining. The experience must be convenient and seamless for the customer and that’s where payment technology helps ensure order and checkout can be convenient and seamless. And it can happen just about anywhere the customer is — whether that be order and pay at the table, at the counter, in line, at a self-service kiosk or drive thru or at a pop-up location.

F&H: Are cashless restaurants the future of foodservice?

Andrew Moore: If by “cashless” we mean mobile pay, then yes, but it’s a fairly distant future. It’s a big task to bridge the physical gap between the guest device and their check data residing in the POS terminal 20 ft. away. Also, it will only succeed if it removes friction for the guest, which has been done successfully in silos by some chains in the coffee and quick-service industries. The large casual-dining chains face too many barriers with POS-integration options and infrastructure to make this feasible in the near term.

The magic bullet for ubiquitous mobile payment has always been a standardized wallet — for evidence you only have to look at WeChat Pay or Alipay, which have been transformative because they are the payment platform. As far as literal “cashless” restaurants, that’s likely many years down the road.

LM: The death of cash has long been predicted, but I don’t believe it will ever be realized. Recently in foodservice, we’ve seen both Sweetgreen and the Amazon Go grocery markets reverse their cashless policies after facing criticism that they discriminate against low-income consumers. There are now regulatory frameworks being established protecting the acceptance of cash, with both Philadelphia and San Francisco having these rules in place. Certainly, the use of cash will continue to decline across all verticals, but I don’t think cashless restaurants are the future of foodservice.

KM: The foodservice industry is one of the first industries to embrace being cashless as restaurants have short windows of peak activity, [so] speed is the name of the game. There’s no doubt accepting card payments is the fastest way to pay at the register. We also know that foodservice businesses want to save time that would otherwise be spent managing cash. In fact, Square’s recent survey found business owners spend more than 14 hours every work week counting cash or making trips to the bank. That means businesses accepting cash, on average, lose around 100 working days per year to low-value, cash-related tasks. And, because money is a precious commodity, cash-related tasks are often handled by the manager at a restaurant location — and often it’s actually the business owner. 

F&H: What other opportunities does mobile present for restaurants?

AM: Location-based offers and seamless ordering are no longer an advantage, they’re an expectation. They are, however, a disadvantage if you don’t have them. The real opportunity to gain a competitive advantage in our space comes from using mobile technology to remove friction from the guest experience — delivering value by enhancing their visit, not by re-inventing it.

LM: Mobile payments present a unique opportunity to tie together all elements of the guest experience. Loyalty programs, gift-card acceptance and review platforms all naturally occur around the time of checkout. Managing and elevating the guest experience across all these vendors and programs presents a large opportunity that is largely missed by restaurants today.

KM: No customer wants to wait in a long line to place an order. With speed and convenience being demanded by restaurant diners, the restaurants we partner with are most interested in order automation. We see this as restaurants add digital kiosks and mobile-ordering apps into the mix. However, some diners aren’t fans of automated kiosks or mobile-ordering apps — but that doesn’t mean they want to wait in line. That’s where arming staff with a tablet and a Square Reader allows staff to engage with customers in line, take orders and payment quickly and help move the line fast. Long lines drive away customers and you may not even realize it as people only look in the door and keep walking when they see a line. Restaurants can’t forget about mobile opportunities to optimize their in-restaurant experience.

F&H: How are operators safeguarding against cyberattacks when it comes to mobile technology?
 
SS: Today, payment-vendors store card information for you, providing you with a token tied to your merchant ID that’s useless if stolen. In my opinion, there’s no reason to store credit-card transactional data, regardless of encryption. It’s our responsibility to look at everything we do digitally through a security lens. Security strategy needs to be considered end to end and baked into the technology build — it can’t be an after-thought. Using third-party technology partners can be effective when building digital assets, but we’re not off the hook for security. It must be our job to ensure our partners’ security posture is top notch as well. We also need to be prepared for customer-service topics around cyber security; ensure your guests know where to go to get their questions answered and your organization has trained its support personnel in proper response and escalation. The hard truth is technology is another “Big Bang” — explosive expansion in every direction, getting bigger, more complex and constantly evolving. Unfortunately, what enables us to do more things with it also enables those who would use that technology to do harm. Attack vectors appear where no one thought to look and, unfortunately, the consequences can be catastrophic.

It’s not okay, in this day and age, to be a business without a digital presence. If they haven’t already, every business is building out those capabilities and inadvertently creating additional attack vectors for cyber criminals. It’s the new Wild West out there and the people building these new platforms and systems are often more concerned with its features than in security-hardening work required to protect peoples’ privacy and financial data. Anyone can build and publish an app or website today and, once published, it could easily have millions of peoples’ private information. Who’s to say whether the author has adequate protections? For every breach we hear about in the news there are a hundred that either go unreported or, worse, undiscovered — the situation is out of control.

LM: Operators have to seriously consider security when evaluating partners and the programs they provide. The regulatory environment and requirements around payment data, as well as personal information, will only continue to grow. The technology ecosystem and vendor choices that operators have to make are broad — this can often be overlooked, but it’s important to ensure all vendors have active security, compliance and oversight programs in place to protect customers data.

F&H: Why do restaurants need apps?

AM: Right now, in casual dining, they don’t. In fact, if you’re a single location or even a multi-unit single brand, you’d be hard pressed to convince me they “need” an app. The first issue is frequency — why would someone download an app for a brand they interact with only a handful of times a year? Especially when the elements they need from you are readily available and easily usable on the web (i.e. ordering takeout/delivery, browsing menus, even mobile payment). The most popular apps in the app store, outside of social media, deliver value by solving problems in an existing process. Uber didn’t invent getting a ride in a car from A to B, it re-invented the process around it and made it easier. Starbucks isn’t an industry-leading app because of its rewards program, it’s an industry-leading app because it takes friction (i.e. waiting) out of the process via ordering ahead and payment. Rewards are just a bonus and, if that’s all the app did, its usage would be lower. Before considering an app, casual-dining leaders need to ask themselves, does this solve a problem or eliminate friction for the user/guest or are we just talking to ourselves? Or is it just our website wrapped in an app? And ultimately, why would anyone use this app?

MJ: It’s become an expectation that businesses have apps. [Smoke’s] launched ours at the end of Q3 2019, which includes a full loyalty program and order-ahead functionality. This has given us a new medium to entertain our fans, communicate unique deals and promotions and also help increase the average visit frequency.

F&H: What are the pros and cons of branded versus third-party apps?
 
AM: Creating a branded app has its own challenges, namely the cost. Reclaiming ROI on a half-million-dollar app is pretty tough, so that drives brand leaders to white-label vendors. For branded apps, the vendors in the white-label “branded-app” space are making it hard for casual-dining restaurants to gain credibility in the space. They litter the marketplace with affordable, ‘skinnable’ apps that deliver little-to-no value for the end user. They are, at best, websites wrapped in an app. There are three parties here and only two of them are winners — the brand gets to say “we have an app,” the vendor gets to make a sale and the user (the loser) gets a weak app that doesn’t deliver any value they can’t get on the web. Third-party apps can be great, but there’s too much fragmentation and not enough critical mass behind any of them to make a dent. Plus, without standardization among vendors, integrating with disparate POS systems is pretty much impossible.

MJ: It depends what your objective is with the app. In [Smoke’s] case, delivering a full brand experience and entertainment was a key objective, so a fully branded solution was the only way to go. When it comes to functionality, we have full control, without restriction. The downside is it’s solely on us to monitor our userbase and keep our fans engaged.

Non-branded apps can be useful for those whose objective is solely functionality or those who want access to a larger pool of potential users than their own social reach. For loyalty/reward apps, [branded apps] generally carry a variety of businesses, which is attractive to users looking for a “one-stop-shop.” The downside is typically a more-restricted experience, so it really comes down to what your key objectives are.

F&H: How can opertors choose an online reservation system?

Jon Morin: In today’s competitive hospitality industry, the first question a restaurant operations manager should ask about an online reservation system is “Will the platform help fill my seats and reduce no-shows?” Other key considerations when selecting an online reservation system include a platform’s features and analytics. For example, is the system intuitive and easy to use, does it provide operational support and how can the analytics deliver insights to help you fill seats in shoulder periods or shorten table turnover time.

SS: Problem number-1 is ensuring you’re front and centre when guests are looking for dining options. Building something on your own will never get you there and, while there are many online reservation systems out there, few are dominant “go-to” destinations for guests.

Cost is certainly a major determinant, but at the end of the day, [operators] should be looking at systems that remove friction for the guest and provide robust tools for table management. Is it easily accessible? Does it give your guest the ability to get on a waitlist if there isn’t a reservation available? On the back end, does it integrate with your POS and CRM or does it have to stand alone? For multi-unit operators, does it consolidate your guest database across your locations? Do you own the guest relationship or does a third party?
 
F&H: Has automation changed the foodservice landscape in Canada?

AM: Speaking strictly about casual dining, remote POS is the obvious one as you see it more often in those environments. However, that’s not really “automation” — it’s more about using technology to take friction out of the server process, making their job and the overall operation more efficient. “Technology” has made a massive impact and will continue to do so, but “automation” hasn’t made a dent yet. Advanced data analytics will make an impact long before automation does.

MJ: Automation has changed foodservice in many ways. Order processing is faster, less prone to error and has streamlined operations considerably. While these efficiencies are nice, removing the human component also introduces new challenges in building the ultimate guest experience. Smoke’s Poutinerie is all about brand, culture and entertainment, so how do we live up to these expectations and entertain our fans through a screen or mobile app? There’s no single answer to this question, but we’re always testing new tactics and introducing new ways for our fans to engage our brand.

GC: Canadian foodservice businesses have turned to automation, such as ordering kiosks, to help deal with the challenge of finding and retaining talent in a tight labour market. It’s also a response to the evolving needs of customers — convenience and customisation. People expect more convenience and hate lineups. They appreciate being able to input their order and customise it using the kiosk, without feeling judged by a human cashier for their food choices or being very particular about their meal. [Automation puts] the power into customers’ hands by allowing them to order on their own (reduces errors in ordering process, makes it more tailored).

Kiosks are turning into their own channel, like drive thru, and operators are discovering kiosks can be used to engage customers with promotional video, special offers, messages for upselling and even asking customers to leave feedback or join a loyalty program in an interactive way. Automation has also changed the role of the server, [allowing them to be] more focused on customer engagement and quality of service.

F&H: What’s the next big trend in restaurant automation?
 
AM: Again, speaking strictly about casual dining, for guest-facing, it will be technology that removes friction from the existing process while not re-inventing the experience. The most successful automation/app makes things easier for people (Uber, Amazon, Airbnb, Starbucks, et cetera). None of those [companies] reinvented the mission of the user, they reinvented the process around it. For us, people want to be in a hospitable, engaging environment being served by people — not ordering themselves from a table-top tablet or app, or a robot carrying food. Those things are novelties and, when the novelty wears off, they add friction to the experience — they don’t remove it. For the back-end operations, it will be the same when something comes along that can remove friction and lower labour and/or product cost. “Flippy” the robot (Cali Burger) is a long way from being able to grill a porterhouse steak to perfection.

GC: The use of voice-assistant-enabled ordering using the Amazon Echo or Google Home application programming interfaces (APIs) may not just be for customers ordering from home — it also could apply to the store. Imagine walking up to a self-order kiosk and, instead of touching it, you order conversationally using your voice.

Also, drive-thru AI, where voice-assistant technology could take a customer’s phone order and enter it into the POS just like any other order.

With AI, the voice-assistant ordering system would ‘learn’ and continually improve based on actual orders and spoken languages. In fact, voice ordering is being tested by restaurants right now. However, with a multicultural country like Canada, this may prove problematic. Many voice-recognition systems do not process accents well and favour a particular style of speech. With Siri, Alexa and Google normalizing voice recognition, this seems like a natural step in automating the ordering/payment process.

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