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95 karma · joined January 28, 2013
These are my thoughts:
1) Faster table turn times (and why they don't matter) - Yes, faster table turn times will occur with the tablets on the table because people can pay much more quickly when they are done with their meal. The big problem that people forget about is 90% of the time restaurants are not interested in faster table turn times. They need more people in the establishment. When was the last time you went to Applebees and they were slammed with people and had a huge wait? Odd's are that it doesn't occur that often.
2) People Dine out to be treated (waited on hand and foot) - Usually when you have made a conscious decision to dine out, you are doing so for the experience. When you decide to dine at your favorite restaurant, part of the experience is being waited on hand and foot by someone else. If these tablets start to replace people, it will certainly hurt the experience of being waited on. You are now going out for food, and not the experience. When people are looking strictly for food, we have seen that they tend to go to fast-casual restaurants (Chipotle, Potbellys, Noodles & Co. Etc.).
3) Menu on tablet (Higher App sales + lower costs) - This to me is a large long-term benefit for the restaurant. They can really create some powerful images for their menu items, which is correlated with higher sales. Also, you have eliminated the costs of printing menus every time you have a change.
Overall Impressions: This is a company that has created a product for an interesting niche. I don't ever see fine dining establishments using this because it detracts from the experience (#2). It does effect table turn time, but the large majority of restaurants wish they had table turn time issues, most are looking for customers (see initial success of groupon in restaurants). The Applebee's of the world are fighting hard with the fast-casual establishments and almost seem like they are in a race to the bottom.
I also don't see independent restaurant owners ever using a product like this because it has 1) high implementation costs (time/effort/cash) and 2) has some effect on sales but not because of the ordering platform, only because it has allowed me to create essentially a moving slideshow for a menu that entices customers while they are at the restaurant.
In my opinion, the person/business that successfully implements tablets in a restaurant will do these two things very well. 1) Allows servers to use tablets to take orders (lowers restaurants costs) - This will essentially allow a restaurant owner to decrease the amount of people on staff, yet still maintain high quality experience for guests, because a server that does not have to walk back to the POS system can handle more tables.
2) Creates a tablet menu that entices guests to order more items - The appeal of tablets on the table is the fact that people will be more enticed to order apps/desserts because of the power of high-quality enticing pictures. This has already been done by plenty of companies, but no one company has dominated.
The biggest problem that a lot of restaurants face is that we simply don't know which marketing tactics are working. The only thing we see is if total revenue goes up or down. This causes us to just throw everything at the wall and guess what sticks based on revenue changes.
To some extent coupons work because we can simply track how many are redeemed, but like I mentioned in my original post, this cheapens the product often and causes the guest to perceive that the food is worth less than the normal price.
With that said, there is no homerun (at least that I know of) customer acquisition method as of right now.
The rise of daily deal businesses have brought up a couple of fundamental issues for us: 1)Customers are often daily deal hunters - We would be willing to take the one-time loss on a daily deal, if we had a chance of converting the customers into regular diners. However, we have found that most people who purchase these deals, simply move on to the next deal after they are done.
2) Cheapens the product - Once you have lowered the price for a product, in this case food, the guest automatically ties the value of that product back to the price they paid. This is a huge problem for restaurants in particular because the guest is not willing to pay full price for the product even if they liked it. Now your product is valued at half of your current price, and to get that customer back in the door, you have to offer a significant discount again (most likely another daily deal).
3) Cannibalizes our existing customer base - One of the worst unintended consequences of using daily deals is that some of your regular guests start waiting for these deals, and only come in when they are available. This hurts in two ways: 1) regular guests are now spending less than they were the last time they came in, 2) regular guests are now waiting for a LivingSocial/Groupon deal to become available before returning to the restaurant causing them to wait longer before returning to the restaurant.
I believe that a company that provides customer acquisition via deals could be extremely valuable, but they must do it properly, and most importantly it must benefit their customer (in this case the restaurant). Until a company learns how to ensure that a business is obtaining a profit from providing this massive discount, without cheapening the product, and cannibalizing existing sales, the daily deals industry will continue to fall by the wayside.