Read This Before You Decide to Build a Self-Order Solution In-House

Many underestimate the commitment that goes into owning and maintaining a piece of software. We’ve put together a guide that explores some of the underestimated costs of building software, and why it likely makes sense to look for a preexisting SaaS solution.

Last month, Stripe engineer and tech writer Noah Pepper published an article titled “The Treacherously High Cost of Software”. The article touches on a question that many decision-makers in our space face regularly: when to find a preexisting software solution, and when to build it in-house? As Noah’s article illustrates, the answer is that in most cases building software in-house should be avoided. That is because it is far more expensive than many people realize.

So why is software so expensive to maintain?

The world is always changing.

As Noah writes, “Just treading water costs money if you want to be compliant, secure and operable …

Your software does not run in a vacuum—the world around it is in constant flux and thus for it to remain effective it must keep pace when the external world forces a change.

If you’re considering building self-order kiosk software in-house, think about what other software platforms it will need to communicate with. Do you rely on outside vendors for your POS software? How about your loyalty platform? Your backend analytics platform? If any of the vendors you work with for these other pieces of software make a change or update to their product, your proprietary software may no longer properly communicate with it. You will need engineers on staff who are kept abreast of these updates and can get to work immediately so that your guests don’t find themselves trying to order from a broken kiosk. Some restaurant brands may decide that is a price they are willing to pay, but anyone making the decision to build in-house should seriously consider this scenario.

But it isn’t only the world around your business that is in flux.

Your needs will change, too.

As Noah writes, the problem with building in-house is “you end up either 1) Writing a specific purpose built solution that will break when you shift your business requirements or 2) Creating a generalized customizable platform that anticipates a broad array of use cases.” Let’s explore this a bit.

In the first case, you have spent money on something that may be obsolete when you inevitably decide at some point down the road that you aren’t indefinitely going to do business exactly as you do today.

In the second case, you need to build a flexible, customizable platform, and that is a very expensive proposition. It is what we are doing at Bite, and it takes a lot of time and effort. It makes sense for us, because we work with a lot of different restaurant brands with different needs and tech stacks that are constantly changing. We benefit from making a tailor-made solution for each of our brands, because there are others out there who can also benefit from that solution. When you are building software in-house to be used by your company alone, this potential upside doesn’t exist.

That’s where we come in.

This is something we at Bite understand very well. As our product has grown in complexity it has naturally grown more costly to maintain—but that is a burden we are eager to bear because this is our core business and our core mission. 

At Bite Kiosk, we live and breathe self-order. We are thinking day in and day out about how we can improve your guests’ self-order experience while in turn providing you a return on your monthly investment in us. We believe that kiosk ordering is the future and it is a future we are ushering in—not just because the numbers make sense but because we believe that our software will elevate hospitality everywhere, empowering guests to order on their own terms and matching the fast pace of their increasingly busy lives. 

Considering Self-Order Kiosks? Here’s Where To Start

While kiosk ordering may have seemed like something of the distant future just a few years ago, today kiosks’ arrival in restaurants across the country seems all but inevitable. McDonald’s, Wendy’s, and Burger King have each all announced large investments into kiosk ordering in their stores, and other brands are taking notice. If you are a decision-maker at a quick-service restaurant brand, there is no doubt you have already begun to wonder about whether now is the right time for your brand to test kiosk ordering. This article covers a few insights we’ve gained from talking to executives across the industry as well as in testing out and expanding kiosk programs with our customers. There are three main questions you should consider. How will kiosk implementation affect store-level operations? Who in your organization will be affected by kiosk implementation? Finally, how will you test your kiosk program?

How will kiosk implementation affect store-level operations?

Implementing kiosk ordering is a big change—your employees and customers alike will need to adapt to this change, and so it is imperative that the transition be as seamless as possible. On the backend, opt for kiosk software that will integrate directly with your POS—this way you will only need to update menu information in one place, and orders will be sent to your kitchens just as they are when a cashier enters the order. From the perspective of your customers, be sure that the kiosk software you choose has a natural, responsive User Interface. A poor User Experience could cause your customers to feel frustrated and they may resent the presence of kiosks in your stores. It’s important that the experience of using kiosks in your stores not just be sufficient, but delightful. This will help win over customers who might be initially hesitant to this new change.

Who in your organization will be affected by kiosk implementation?

Any change in a large organization, even a small change, is likely to meet some friction. Because implementing kiosk will affect multiple departments in your organization—IT, Operations, Marketing, Franchising—you should gain buy-in from members of these departments sooner rather than later. Your choice of a kiosk solution is important here: it will be difficult to gain the support of those in Marketing, for example, if the kiosk software you hope to pilot poorly represents your brand or lacks data reporting functionality. It might be hard to win over your Director of Operations, on the other hand, if the kiosk implementation would involve a serious shift in your restaurant’s store-level operating model. As you move forward with a kiosk software solution, seek the input of other stakeholders involved so that you can enter the pilot with everyone in alignment.

How will you test your kiosk program?

Once you’ve decided kiosk is something you want to concretely explore, the next step is to run a test. It would be foolish, of course, to roll out a new technology in hundreds of locations across the country before testing it out in a few pilot stores. But while the insight to run a test is hardly revolutionary, designing the test so that you can actually learn what you set out to learn is more difficult than it might seem. As you begin to design your kiosk test, consider the following:

What do you want to achieve with kiosk long term?

Identify ideally just one and at most a few long-term goals for kiosk. Why did you decide to explore kiosk? What do you hope to get out of it?

What can you test in the short-term that will shed light on kiosk benefits in the long-term?

What is the outcome that will make you decide to expand the kiosk software into more stores and what outcome would lead you to pull the plug?

How will you measure this outcome throughout the testing period?

Be sure that the metrics are simple and you limit confounding variables that could cloud your results. In our tests, common metrics used are change in average order volume, change in throughput, and change in labor as a percent of sales—but the specific metrics you choose should correspond to your specific goals in implementing kiosk.

As you consider how to develop your kiosk test, keep in mind the importance of working with a kiosk partner that values customer success and will be willing to work with you to make kiosk a success in your stores.

Personalization and the Restaurant Experience

With rapid developments in the sophistication of technology offerings in recent years, consumers have higher expectations than ever regarding personalization. In the U.S. adults are strapped for time, working more hours now than at any point in history, and the limited time these consumers do have will increasingly be given to brands that deliver an experience that is convenient and tailored to customers’ specific needs. Silicon Valley has been the first to answer this call for personalization, with digital native companies like Amazon, Netflix, and Spotify rapidly conquering their respective markets by offering consumers an experience that is individualized and puts ease-of-use above all else.

But while the personalization push has been led by companies operating primarily in digital spaces, consumers look for these same individualized experiences in physical spaces as well. McDonald’s recent acquisition of Dynamic Yield indicates that restaurants, too, will need to innovate toward hyper-personal experiences for their consumers if they wish to compete. In particular, small and medium size restaurant brands (<250 units), that may not have the same resources as a company like McDonald’s for large-scale acquisitions, will need to be thoughtful in partnering with cutting-edge tech companies that can help propel them along in their personalization journey.

Given the clear importance of personalization in the restaurant space, there are three key points on which a restaurant brand should focus in providing an individualized experience to guests that will keep them coming back to your restaurants: an ordering process that is designed for guests’ needs, reduced friction in customer tracking with facial recognition, and data-leveraged product development and marketing.

An ordering process that is designed for guests’ needs

While ten years ago customers might have found it strange for software to predict their cravings better than they did, today customers expect this level of intelligence from their tech. Spotify knows what song befits a sunday afternoon stroll on a rainy street. Amazon knows that a cart with olive oil and onions needs garlic. Consumers turn to software to plan their vacations and even help them meet their future spouses, so it is not surprising that they similarly expect restaurants to tailor the ordering process to their needs. Physical technology such as digital menu boards and self-ordering kiosks provide spaces for tech-driven personalization in the restaurant space. However, choosing the right software to power this hardware is key in ensuring an individualized experience for guests. Look for ordering software that makes recommendations based on your guests’ past experiences and tailors each step of the experience to their needs.

Reduced friction in customer tracking with facial recognition

There is, of course, no better feeling than returning to your favorite restaurant and being greeted by the same face that has greeted you for years. But with labor turnover rates in the QSR and fast casual space notoriously high and still increasing, this feels like an idyllic picture of the past for many restaurants. However, advanced technologies can re-introduce the ease associated with ordering from a server or cashier who remembers you and your favorite order. More than this, though, technologies like facial recognition also allow restaurants to collect data even from customers who have not signed up for loyalty programs, enriching customer data in new ways. Further, customers tracked outside of loyalty programs can be encouraged in creative ways to be brought into the fold of loyalty programs, for example by allowing customers to bank points before registering for the loyalty program and receiving their points upon signup.

Data-leveraged product development and marketing

But how can all this new data be used? Maybe you’ll predict the next super food, or see that consumers are cutting back on sugar before all the headlines in the media. Or perhaps you’ll see that, despite what media reports claim, your sales of glazed crullers are in fact higher than they’ve ever been, and this surge is sales is driven by primarily by men in their late sixties, and men who buy crullers tend to be some of your most loyal customers, so cutting crullers from the menu would be a costly error. When you have the data, you can cut out the guessing. Finding ways to allow customers to seamlessly share their information as part of their dining experience opens a whole world of data-driven product development and marketing. Brands that are innovative in this space will continue to expand their lead on competitors that fail to evolve. The benefits of a sophisticated data-backed operation—guess-free product development, precise audience metrics, etc.—are simply too powerful to ignore.

What Automation Means—and How We All Should Be Thinking About It

As seen in: https://www.foodabletv.com/blog/2017/what-does-automation-really-mean-for-our-industry 

In the drive for speedier service, automation has been hailed as the next wave for restaurants to operate efficiently. However it’s not always as clear cut as you think. When we hear that restaurants want kiosks to speed up service, we think: yes! and you also have a great opportunity to give your guests a memorable experience at the same time. With self-ordering kiosks and self service, the metric shouldn’t be about the stopwatch hanging over the kitchen. Instead we at Bite like to think about these metrics instead: guest satisfaction and guest return rate. 

Satisfaction, not speed, drives returns.

Guest satisfaction in a traditional QSR sense does mean the timer. Guests are fickle, they want their food immediately and many balk at long lines. There’s very little we can do with guest behavior, but we can certainly solve for long lines and improving the guest experience along the way. Staffing with more cashiers was certainly an option but with limited store footprint and concentrated demand times, that may not always be a viable option. Self-ordering kiosks can offer a cost-effective way to amplify your order-taking capabilities. But without a good experience self-ordering can very quickly lead to the stale grocery store check-out experience. Our edge, is to personalize that experience – making it exciting and unique for every guest. Letting guests spend a few extra seconds – or minutes – to put together their order and really explore the menu for things other things they’re interested in will help drive another visit. Behind the scenes, our algorithm can learn what the guests like – showing them products they’re interested in, and offering tailored coupons to bring them back.

So while guests may take a little longer to place an order through kiosks, it doesn’t mean it will slow down your system. By offering multiple order points – a few kiosks and a few cashiers, you’re giving your guests more opportunities to put orders into your system, and handle that lunchtime rush. And who knows maybe they found something they’d like to come back next time to try

Personalization Matters: Here’s Why

As seen in RMagazine Apr. 11, 2017 (http://rmagazine.com/higher-profits-and-satisfaction-through-reintroducing-personalization/)

As you walk into your neighborhood QSR, you’re greeted by name. Followed by “The usual?” The server behind the counter flashes a smile, gets your order underway and you’re out the door in record time.

Right there, the guest is given three reasons to come back again: the friendly service; the personalized experience of a remembered order and the speed and efficiency of stopping in. For the operator, they  have a satisfied, committed guest and perhaps even a brand evangelist—someone who will also spread the amazing work of what you do.

Once, this was the norm. Now it’s a dream that most operators aspire to, but think impossible to attain.

Personalization gives your guests three reasons to come back again: Friendly service, personalized experience and efficiency.

At the heart of what enables this system to run smoothly is personalization. But if asking your staff to memorize names, faces and orders is unrealistic, what other solutions do we have?

In the age of technology, smartphones and apps, new tech can often be construed as impersonal— the exact opposite of what we’re trying to achieve. However, there are companies out there that have developed creative solutions. Here  are a few case studies on why you should pay attention to personalization.

Higher Profits

If you’ve ever shopped on Amazon, you’re likely to have created an account—and then Amazon starts learning what you like. Unlike most other digital stores, Amazon (at least for me) has an uncanny ability to recommend items that I would find interesting. By suggesting products I would otherwise have ordered, it drives home the upsell.

As reported in Fortune even back in 2012, personalized recommendations represented a near 30% increase in sales from one feature. However let’s be clear, this is not the same as asking “Do you want fries with that?” if your customer is buying a burger. Amazon provides a specific set of items that will appeal to the guest.

It’s akin to offering a salad to your health-conscious guest instead of offering fries, as well as  a new lemonade that they never even knew about.  Because each recommendation is relevant, their customers rarely tune out to what the personalization feature suggests. In fact the opposite is much more likely: guests increase purchases when the options shown are tailored to their tastes.

Better Service “IRL” too!

Personalization can exist “in real life ” too, outside the digital sphere. Take Disney’s Magic Bands for example. Disney’s Magic Bands are a type of wristband advertised as a convenience to guests vacationing at Disney Parks—they can record purchases and unlock your specific hotel room. More importantly,  they also allow Disney to provide another level of personalized service.

The hosts will greet you by name when you arrive at a restaurant, know where you’re sitting if you pre-ordered a special meal. Using the wristband can even grant you special access to rides throughout the day. With a little help from technology, Disney creates an incredible experience for users of the Magic Band while simultaneously gaining insight into their guests’ habits.

Doesn’t a mobile app solve this?

In the hospitality industry, we frequently hear the desire for a mobile app. Yet only a handful of establishments have the brand equity and capital to launch an app successfully. In 2016, the average number of new apps downloaded, per person, was 0. Even worse, once you’ve convinced your guests to download it, 80% of users never open the app a second time.

What can we do?

We at Bite believe that personalization matters, and we’ve developed a creative solution to help you re-introduce it at your concepts. While we love the capability and the idea of mobile apps to give guests the flexibility and personalization features, there is a steep hurdle to overcome in guest adoption. Instead of developing an off-premise solution, we believed, much like Disney, there should be magic when guests step into your restaurant. It should be an experience that they can remember, and describe. To that end, we’ve developed intelligent kiosks, designed to give each and every guest a personalized experience. That not only starts with our kiosks but can also amplify your staff, freeing them up from behind the counter to actively greet and provide attentive service to your guests.

Our intelligent kiosks can detect and recognize your guests and remember their order history. With our baked-in learning algorithm, the Bite kiosks can learn their preferences, and offer them tailored recommendations and drive targeted upsell opportunities. We’ve also created a robust interface allowing operators to introduce offers to specific guests – say guests who are regulars on Wednesday only – or select a demographic to test a new LTO on.

We believe that personalization through guest recognition will enable new and memorable experiences.

Sources:

On Apps: Recode 2016; Applause 2016