In 2010, I wrote an article titled “Quick-service restaurant kiosks: What’s taking so long?”
The gist was that although major players like Subway, McDonald’s, Burger King and Arby’s started experimenting with kiosks in 2006, we had yet to see mass adoption in the restaurant space, despite kiosks’ rapid deployments in airports, grocery stores and casinos.
In technology terms, it has since been a lifetime. However, kiosks finally seem to be having their moment in the quick-service space.
New research from Tillster shows that 25% of restaurant customers have used a self-ordering kiosk at a restaurant within the past three months — up 7% year-over-year. Further, more than 65% of customers said they would visit a restaurant more often if self-service kiosks were offered, and 30% of customers prefer to order from a kiosk versus a cashier if the lines were of equal length.
These numbers mark a dramatic shift from an MSN poll conducted a little over a year ago suggesting that 78% of customers said they would be less inclined to go to a restaurant that has self-order kiosks.
This swift swing of the pendulum was pushed in motion by major restaurant brands revisiting kiosk deployments at an aggressive pace, as well as younger consumers native to digital screens. You know how Amazon got all of us used to the convenience of one-click shopping? That’s sort of what McDonald’s, Wendy’s, Subway, Panera, etc., are doing with kiosks.
Consider the narrative within the past year alone. Subway is in the midst of a brand overhaul that includes kiosks, noting that they drive consumers to purchase add-ons and spend more.
During its Q1 earnings call in May, Wendy’s CEO Todd Penegor said kiosks will play a bigger role in the restaurant to promote speed and convenience.
“We have kiosks in about two-thirds of our company restaurants. We are seeing benefits and are trying to convince the rest of the system to make the capital investment because we think it has a return,” Wendy’s CFO Gunther Plosch said during the call.
KFC plans to have kiosks in 5,000 restaurants around the world by 2020, and sister chain Taco Bell plans to have its entire domestic system outfitted with the technology by the end of this year. Burger King, Tim Hortons and Dunkin’ are also focusing on in-store technology, including kiosks.
This mass wave of installments explains why Tillster’s research predicts the self-service kiosk market to reach $30.8 billion by 2024.
Why now? Operators are more fully realizing their return. During McDonald’s Q2 call, for example, CEO Steve Easterbrook said the chain was gaining material incremental sales lifts from its kiosks.
“As we convert the (Experience of the Future) restaurants, we’re getting an incremental sales lift from that, some of which will come through growing and increasing use of the self-order kiosks where we generate higher average checks,” he said on the call.
Hope Neiman, chief marketing officer at Tillster, credits kiosks’ ability to upsell for yielding such results.
“With kiosks, we are able to be smart about what menu items to showcase, which makes it easier to upsell or cross-sell,” she said. “When you get smarter about how to showcase your menu, you’re not just growing your top line, but also your bottom line and that’s where this technology thrives.”
Kiosk technology is nimble enough to allow operators to play trial-and-error on what works and what doesn’t during specific times. A sandwich company could collapse less-popular bread choices on the screen, for example, in an effort to speed up service during the busy lunch hour.
“Menu curation is a huge opportunity for restaurants when it comes to kiosks,” Neiman said.
Kiosks also remove the intermediary (cashier) from the ordering process, freeing those employees up to greet customers, help them navigate the technology or pitch in on cooking during high-volume times. This not only provides a more seamless experience, but also, in many instances, makes consumers a bit more comfortable. In an interview in the spring, KFC CFO Gavin Felder said kiosks help ease order anxiety, which explains why they tend to order more through the technology.
Tillster’s research echoes this observation.
“According to our data, if you’re standing in front of a kiosk, you feel like no one is judging you if you choose to add a shake or get a large combo,” Nieman said. “There is as much as a 5% difference there.”
The PYMNTS Unattended Retail Tracker puts that number even higher, reporting that the increase in consumer spending when ordering through self-service kiosks is 30%.
This number could get higher as more consumers get used to the technology as it becomes ubiquitous. That said, perhaps what’s most surprising about the Tillster study is that kiosk adoption isn’t just a “Millennial thing.” Over 25% of consumers ages 65 and older have placed orders on self-service kiosks within the past 12 months, for example.
“The flattening of the differentials from an age perspective surprised me, but shows that it is quickly becoming the new norm. People have gotten used to this in non-restaurant settings like airports and now they’re expecting it,” Neiman said.
Don’t expect this momentum to slow anytime soon. According to the National Restaurant Association State of the Industry 2019 report, 41% of quick-service operators plan to devote more resources to tablets, iPads, tableside ordering systems, or self-serve kiosks this year.
And, according to the Tillster report, a whopping 67% of customers plan to place an order with a self-service kiosk within the next year — a 25% increase over the previous year.
“Kiosks are definitely here to stay,” Neiman said. “The technology will continue to evolve quickly. Expect more personalization where the technology better connects customers to the brand and makes it easier to engage with them.”
Such personalization is exactly what we’re starting to see from McDonald’s digital overhaul.
“Digital capabilities change by the day and impact what customers ultimately expect from us,” Easterbrook said on the earnings call. “The technological ecosystem we’re building will enable us to meet these rising expectations, positioning us for new opportunities to elevate and transform the customer experience.”
Notably, McDonald’s Q2 global sales grew by 6.5%, the most in seven years for the company.
This article was written by Alicia Kelso from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
