Wondering why so many restaurants are introducing self-service kiosks, tablets and other technology?
An interesting trend has occurred over the last several years: several large entities in the food industry have introduced apps, kiosks and other self-service technologies. Soon afterward, these businesses discovered that customers will spend more on average when using self-service technology.
Taco Bell reported that orders made via their digital app are 20% higher than purchases made in-store.
Similarly, Cinemark theaters reported that its self-service concession stands produced an increase in revenue from customers purchasing food and drinks.
And, the restaurant chain Chili’s experienced a 20 percent increase in dessert sales thanks to its self-service tablets.
Why does self-service technology increase sales?
In an analyst call, Cinemark CEO Timothy C. Warner said the self-service technology “creates a lot of impulse buying, and people don’t run into any lines.”
Indeed, the folks at Taco Bell seemed to imply much of the same when they said that most of the increase in revenues from their digital app could be attributed to extra items customers would add to their orders while using the app.
But, what exactly spurs customers to spend more while using an app or a self-service technology?
A report in the Harvard Business Review noted that researchers from the Rotman School of Management, Duke’s Fuqua School of Business and the National University of Singapore did a study and concluded that the technology allowed customers to avoid negative judgment of their eating habits. In other words, when customers worried less about how others may perceive their food choices, the felt free to order what they wanted.
In addition, the kiosks never forget to upsell. The Harvard Business Review article pointed out that McDonald’s saw an increase in the average check size when they introduced kiosks and found that 20 percent of customers who initially did not ask for a drink ended up purchasing one when a drink was offered.
What should businesses know before introducing self-service kiosks?
While increased check sizes and higher revenues are wonderful, businesses should be keep a few things in mind when designing the self-service experience.
According to Ryan Buell, an assistant professor at the Harvard Business School, there are three key items to keep in mind.
He told the Harvard Business Review that the experience needs to be designed so the customer knows what’s expected of them. In other words, they need to be able to see that the kiosk is there for them to place an order.
Second, they need to be capable of doing what’s expected of them. In other words, they need to be able to understand how to do whatever it is they’re being asked to do. If they can’t figure out how to place an order, that defeats the whole purpose of the self-service experience.
Lastly, and this is where some companies “fall off the rails” according to Buell, the customer needs to see the value of expending the extra effort. Some customers, such as those who go into the self-checkout line at the grocery store, don’t want to do the work that they feel should be done by an employee.
What can humans do better than a kiosk?
Speaking of employees, there are some things that can be done better by humans than by machines. Buell stated that humans will not be replaced by machines any time soon and part of the reason for that is that humans are much more flexible than machines and they can understand when the customer is having trouble understanding something.
“The person can adjust to us,” Buell said. “If we’re having a misunderstanding, they [humans] can clarify it. Technology really can’t do either of these things.”
Is there some part of hospitality technology that we can help you understand? Contact us to answer any questions or to set up a demo of self-service technology.