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Trends in Point of Sale

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October 01, 2002
Point of Sale
Amitava Chatterjee, CHTP

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© 2002 Hospitality Upgrade. No reproduction without written permission.

Point-of-sale (POS) systems are ubiquitous in restaurants. They have evolved from simple cash registers into full-fledged restaurant management systems. They generate and track order progress, generate checks, process settlements, calculate profitability, provide serving period summaries and operating statistics.

Mapping Industry Segments and Their Issues to Technology Trends
In the foodservice industry, each segment has its own unique POS system requirements, based on issues most important to that specific segment. The table below summarizes some of the key business issues and the technologies that seek to address them.

Segment: QSR, Fast Casual and Takeout
Key Business Issues:
Speed of service, Price
Technology Trends:
RFID/wireless devices, Self-service kiosks, Web-based POS

Segment: Casual Dining
Key Business Issues:
Service, Labor costs
Technology Trends:
Handheld POS, Table management, CRM

Segment: Fine Dining
Key Business Issues:
Service, Table management
Technology Trends:
Handheld POS, Table management, CRM
Source: PwC Consulting

A Closer Look
Radio Frequency Identification (RFID1) Devices – These devices allow speedy payment processing. Consequently, they reduce checkout time and the ease of payment often increases average purchase. Depending upon the level of sophistication, some systems can even transmit loyalty and CRM data. Such systems are especially useful for QSR and, indeed, some restaurants have already started using them.

Web-based POS/ASP Models – An ASP offering has a number of benefits. It eliminates the need for heavy-duty servers onsite. Perfect functionality is achievable using thin clients, perhaps with a browser-based front end. Management is easy and updates are pushed through the network. Right off the bat, we can see that this model allows uniformity of applications across the enterprise and allows the back office to see through to the front office.

Wireless Devices/Mobile POS – When these were introduced, they were not very popular. Line of sight was an important issue and, more often that not, servers were busy looking at their handheld screens as opposed to focusing on their guests. The net result was handheld terminals stayed away for a while. However, all that looks like it is changing with advances in mobile communication that have enabled the development of more sophisticated wireless devices. These allow better customer service since wait staff can now spend more time on the restaurant floor rather than running to a side station to place an order. Wait staff spend less time per table and can, therefore, serve more tables at once. Wireless devices can also be programmed to flash an upsell message, such as “Recommend the Chateauneuf du Pape Soixante Neuf.”

CRM for Diners – Dare we say DRM or diner relationship management? Like hotels, restaurants have access to a wealth of data about their customers, which can be collected and put to good use. For example, data can be used to track customer preferences and buying habits for frequent diner programs and other loyalty offerings. It can also be used for effective and customized service delivery. In addition, DRM has a highly complementary value for the lodging industry, where customer behaviors and preferences are already tracked. Challenges for restaurants include how to store and use customer information on the front line.

Table Management – All of us have seen the hotel floor plan graphically displayed on a PMS screen. Colors intuitively reflect a room’s status. We see the same in restaurants today – different colors for vacant, occupied and vacant not cleaned. Tracking status and orders for each table enables faster table turns and better service. In addition, linking to the frequent diner database can enable customized service. More obviously, these systems link to pager systems and reduce table wait times, which lead to happy customers and more profits.

PwC Consulting surveyed 12 POS vendors to assess how many of them provided the functionality important to restaurateurs. This functionality may be built in or available as add-on modules. The results are summarized as follows: 45 percent provide table management; 18 percent provide CRM; 36 percent provide wireless and 27 percent provide Web-based products.

One of the impacts these trends have on the foodservice industry will be lower deployment costs becoming the norm. Vendors will offer user-friendly, functionality-rich applications at a lower cost, as the costs of providing technology continue to drop. Complexing, or sharing infrastructure and/or resources, will become commonplace. ASP offerings will continue to make inroads and non-critical applications will move offsite. Expect to see front-of-the-house technology advancements leading to lower-priced workstations such as thin clients, browser-based, perhaps using Windows CE. Wireless devices, table management systems and diner relationship management will enable the delivery of excellent service that will keep your customers smiling and coming back for second helpings.

Amitava Chatterjee, CHTP, a consultant with PwC Consulting’s hospitality and leisure practice, is based in Fairfax, Va. He may be reached at mailto:amitava.chatterjee@us.pwcglobal.com.

1 Radio frequency identification - When an RFID tag passes through the electromagnetic zone, it detects the reader’s activation signal. The reader decodes the data encoded in the tag’s silicon chip and the data is passed to the host computer for processing.

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