Self-driving cars, automatic tellers, robotic vacuums and now virtual waiters? AI and automation are changing almost every industry in major, irreversible ways. Jobs that once seemed essential and indispensable — taxi drivers, bank tellers, house cleaners — now face an uncertain future. As virtual kiosks provide service with a cyber smile, will waiters become a thing of the past?
A Seat at the Table
More and more Americans are getting acquainted with their newest dinner guest — self-ordering kiosks at their favorite restaurants. While the technology isn’t exactly new, its presence at the dinner table is.
For years Apple has equipped its Genius Bar employees with handheld, mobile checkout kiosks in the form of iPhones and iPads. Virtual pharmacies are now on order in drug stores, and convenience chains like Wawa and Sheetz have employed touch-screen hot food ordering for over a decade.
After widespread adoption by the airline industry in the 2000s, mobile kiosks have reduced airport service times by 60 seconds. And new data suggests that a similar adoption rate in the restaurant industry could reduce order times by nearly 40 percent.
Now, self-ordering kiosks are taking over the quick-service industry, with McDonald’s, Starbucks, Wendy’s and Panera all adopting digital kiosks or mobile-ordering apps.
After a rollout in Europe, McDonald’s unveiled its eye-catching, large-screen kiosks at U.S. locations in 2015. By 2020, it expects to have mobile kiosks installed in nearly all of its 14,000 stores, upgrading 1,000 stores per quarter. Proponents estimate that the move could help McDonald’s win back $2.7 billion in lost sales.
Dining Goes Digital
In 2013, Chili’s began rolling out its Ziosks at every table in its empire — a whopping 45,000 tablets in total. While waiters are still required for many tasks, Ziosks remove some of the legwork and miscommunication that can occur between the table and the kitchen.
With Ziosks, customers can place error-free orders, easily summon their waiters and quickly settle their bill without ever having to ask for the check.
While it’s still unclear whether these machines will have a dramatic, long-term impact on profitability, self-service kiosks are doing their best to prevent customer erosion.
As millennials increasingly turn away from casual dining, many restaurants see kiosks as a way to retain this valuable demographic. After a number of store closings, Subway is attempting to rebrand itself with self-serve kiosks.
In addition to their technical appeal, kiosks go the extra mile to create the kind of personalized dining experiences millennials love. McDonald’s attractive and interactive kiosks serve up personalized calorie counts and recommend foods based on the weather and the time of day. Some can even remember orders for easy access in the future.
For retailers and restaurateurs, kiosks are win-win. They gather a wealth of customer data, reduce human error, lower labor costs, minimize overhead and improve customer experience and retention.Self-serve kiosks also have the added benefit of increasing sales. Without human interaction, customers feel more comfortable ordering more food. Self-serve terminals lead to 1.4 times the amount of food and a 21 percent increase in order size — an overall increase of $5 per interaction.
When McDonald’s introduced self-service kiosks, check sizes increased by 30 percent, and Taco Bell’s kiosks led to a 20 percent increase in order size. The main reason? Kiosks never forget to upsell — increasing the size of drinks, adding desserts and even pricey condiments.
Self-serve kiosks also limit lines, improve traffic flow, speed up wait times and improve order accuracy, but the convenience does come with downsides.
Digital technology may make food more convenient, but 78 percent of customers say they still prefer human interactions, and they would be less likely to patronize a restaurant with digital kiosks.
Still, loyal customers who are already familiar with menus are more likely to use digital kiosks. And 41 percent of millennials say they would be more likely to order from a kiosk at a restaurant, if offered.
Other critics fear digital kiosks will take jobs from service workers, but evidence is showing that may not be the case. Given the tight labor market, many companies are having a hard time staffing service positions. And many chains are simply relocating employees behind the counter. In one example of this labor redistribution, McDonald’s locations equipped with virtual kiosks now hand-deliver food to customers.
After launching its self-service kiosks in 2014, Panera’s sales increased by 6.2 percent, which led to the hiring of 1,700 additional employees. While technology can create temporary job decreases, it tends to increase the number of jobs available. Ultimately, self-service kiosks help human workers provide better customer service.
Can Kiosks Be Trusted?
When it comes to securing self-ordering kiosks, it’s important to remember that these machines are essentially touchscreen computers. These state-of-the-art devices need the same kind of network and POS security required by any other payment or data terminal.
And companies like Goji Systems and DineEngine are offering restaurants secure, customized kiosks and mobile applications that work with dozens of POS systems.
Still, it’s important for companies to remain vigilant. Though Wendy’s is rolling out kiosks en masse, the chain isn’t far removed from the massive POS data security breach that compromised nearly 300 locations and led to a massive class action lawsuit.
Reinventing the Restaurant
So why has the restaurant industry lagged so far behind banks, supermarkets and gas stations when it comes to kiosk technology?
Just as the healthcare industry relied on paper records longer than it should have, restaurants have been overly dependent on human labor. The result is a fragmented industry trying to innovate seemingly overnight. And restaurants’ razor-thin profit margins mean POS security is not always top of mind.
When it comes to kiosks, restaurants and retailers should secure them the same way they safeguard other POS security devices, including maintaining PCI DSS compliance, purchasing secure kiosks from reputable dealers and making sure POS systems can handle “chip-enabled” EMV cards.
Public WiFi should always be kept separate from POS terminal connections, and POS systems should be monitored for suspicious activity so breaches don’t go undetected. Restaurants should also develop comprehensive cybersecurity plans to protect customer card data, the same way they protect customer health and safety through sanitary food practices.
While it looks like self-serve kiosks are here to stay, when used correctly, these automated devices are a welcome addition to traditional POS offerings. For most restaurants, the goal isn’t to replace traditional workers and point-of-sale offerings — it’s to enhance the customer experience.
In the future, these kiosks may make ordering even more seamless by offering facial recognition to remember orders and perhaps even process payments.
Regardless of the way people pay for their food in the future, Bluefin keeps POS systems secure by encrypting cards the moment they enter a payment system. To learn more about how our P2PE and tokenization services protect your organization from a data breach, contact a Bluefin representative today.