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Self-service POS: Order On Your Own

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March 01, 2004
Self Service | POS
Amitava Chatterjee, CHTP - amitava.chatterjee@us.ibm.com

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© 2004 Hospitality Upgrade. No reproduction without written permission.

Point-of-sale systems are a boon to foodservice establishments. The technology employed has advanced by leaps and bounds, with great improvements to hardware, software, networking and communications. With the Internet we’re able to manage point of sale at the enterprise level and the usage of wireless devices is increasing. However, these advances have one common characteristic: They are inherently intended to serve the employee by streamlining their workflow and making them more efficient. What about the other side, the customer viewpoint? How can the transaction be more efficient and provide the customer with greater autonomy in the item selection process? Has the POS evolution come to a halt or is there more to come?

Self-service kiosks are powerful devices with widespread adoption. They are all-pervasive in a variety of different industries and used for different applications. But each application has common threads: easy access, speed of transaction, customer empowerment, operational excellence and cost savings for the business that invests in and installs them.

Michael Lukianoff, a senior consultant for Revenue Management Solutions, said, “The early adopters of this technology who use it correctly will find themselves with a profound competitive advantage.”

Given the popularity of the self-service concept in other industries, it is logical to expect that certain types of food and beverage establishments would adopt a similar strategy, thereby reaping the benefits. McDonald’s is testing self-service1 to ensure order accuracy and speed. McDonald’s analysis shows “…that a six second delay could lead to a 1 percent drop in sales2.” Sheetz convenience store chain has a touchscreen kiosk solution that allows customers to select and customize their made-to-order offerings3. Other stories abound regarding the success of such initiatives.

Key Benefits of Self-service POS
Self-service POS provides certain benefits specific to the food and beverage segment. These include consistency of guest interaction and enhanced service, labor savings and efficiency.

Consistency of guest interaction is one of the keys to service excellence. Training staff to provide consistent service, while not impossible, is expensive. If the establishment wants to maintain superlative service levels, new hire and refresher training becomes fashionable. On the other hand, self-service POS may be programmed to interact with the customer consistently, regardless of serving period or season. This results in enhanced service. Further, if programmed to do so, as it should be, the self-service application will display upsell and CRM messages logically, at appropriate points in the transaction, consistently and without fail (of course, algorithms will need to be set up correctly in the application). In fact, upselling is one of the most significant contributors of ROI4. Imagine the possibilities and levels of interaction if the kiosk allows for diner relationship management?

Self-service POS implementations result in labor savings since dependence on human capital is reduced. Traditional functions performed by staff, such as greeting the customer, stating menu choices and making suggestions are now taken over by the self-service application. Consequently, expenditure on training is also reduced. Revenue Management’s Lukianoff said, “Self-service kiosks are a terrific way to reduce variable costs.” These labor savings may be re-deployed to support better speed of service. Also, self-service devices are not hindered by inclement weather or personal problems. They deliver consistently and continuously. Reduction in labor will not negatively impact kiosk performance—advances in remote kiosk monitoring will allow centralized tracking of kiosk health, and the ability to track faults and page service staff to fix hardware errors such as paper jams without allowing a fall in service levels.

A well-designed self-service application with an intuitive flow will put the customer in charge of the transaction.

  • Time normally spent in going back and forth trying to determine menu item selections will be reduced.
  • The customer can choose preferred items quickly.
  • Wait times are shortened, and as soon as an order is placed it can be fired in the kitchen.
  • Valuable minutes will be shaved off the transaction, leading to shorter lines and reduced wait times. This translates into valuable revenue earnings.
An Environmental Scan
IBM Business Consulting Services conducted a quick survey of some POS solution vendors’ Web sites to assess how many of them clearly list self-service functionality as an option. The results are summarized as follows: self-service solution clearly listed—60 percent; self-service recognized as a trend—40 percent; vendor provides hardware—100 percent; and vendor provides software—100 percent. Expect to see these numbers change, as self-service gains a stronghold in the industry and vendors react accordingly.

In addition, the author corresponded with some vendor representatives. They were questioned to determine whether they provide a self-service solution, provide hardware, have a customizable application and have system monitoring capabilities. The results are summarized in Table 1.

The self-service POS concept offers several benefits to foodservice establishments, namely enhanced guest service, labor savings, consistency of guest interaction and operational excellence. A more efficient transaction results in increased customer throughput and increased revenue. The benefits of automated upselling, logically, consistently and unfailingly, at opportune moments in the interaction cycle cannot be overstressed. Many industries have taken advantage of this for years and now the time has come in foodservice as well.

Amitava Chatterjee, CHTP (amitava.chatterjee@us.ibm.com) is an advanced consultant with IBM Business Consulting Services’ Travel and Transportation, Hospitality & Leisure practice. He is based in Fairfax, Va.
 

Notes:
1 http://money.cnn.com/2003/08/11/news/companies/mcdonalds_diy/?cnn=yes
2 ibid.
3 National Retail Federation. (July 2003). Customizing Sandwiches at the Kiosk. Korolishin, J.
4 ibid.



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