Mobile pay and self-service kiosks: Partners or competitors?

As consumers continue to adopt mobile order and pay, retailers are finding themselves challenged to determine the proper mix of self-service options for customers. The expansion of mobile order and pay has led some to wonder whether the technology will replace self-serve kiosks.

This question was the focus of a panel session at the recent
Self-Service Innovation Summitin Hollywood, Florida: “Mobile pay and self-serve kiosks: Partners or competitors?”

In introducing the panel, moderator Cherryh Cansler, vice president of events at Networld Media Group, noted that the question came up during one of the keynote presentations at the Summit.

Cherryh Cansler

(The Summit is one of several industry events organized by Networld Media Group, the parent company of Kiosk Marketplace and Vending Times. The media company’s next event is the
Restaurant Franchising & Innovation Summitbeing held March 20-23, 2023, in Coral Gables, Florida.)

Cansler also noted that the annual
Kiosk Marketplace Industry Censusidentified “integration with mobile order and pay” as one of the most important kiosk technologies cited by both kiosk user and supplier organizations.

Kiosks versus mobile pay?

The panelists agreed that both mobile pay and kiosks have a role to play in today’s retail environment, but offered different views on whether or not the current customer demand for self-serve kiosks will sustain itself as mobile pay expands.

Panelist Steve Lieber, vice president of franchise business development at BurgerFi International, said the interactive nature of kiosks has proven successful in restaurants and he expects kiosks to continue to grow. The company has used kiosks over a year.

“It suggestively sells to the customer, it automatically gives them the loyalty points, it stores order history, it enhances the guest experience yet still helps us with order efficiency and order accuracy,” Lieber said. “We’re seeing an 18-and-a-half percent higher check average on kiosks as opposed to traditional ordering.”

Steve Lieber

Lieber said kiosk orders comprise 30% of the company’s dine-in orders, which comprise 45% of the sales, and are increasing weekly. Mobile app is responsible for about 10% of the total while 35% is from third party delivery.

“The more we can get the customer to engage with the kiosk, we think that we’re going to be more intuitive,” he said.

BurgerFi is offering a more personalized customer experience via discounting or personalized promotions with the kiosk.

The kiosk cost is about $3,000 and franchisees are recouping it in two to three months.

“We’re finding that the customers are feeling more efficient,” Lieber said, despite initial concerns about losing the personal touch. “And they seem to be giving bigger gratuities, so their perception of the experience is better.”

A different view

Panelist Ryan McWhirter, vice president of product management at
365 Retail Markets, maker of a self-checkout kiosk for micro markets along with other kiosks and payment devices for vending machines, sees mobile pay gaining market share at the expense of self-serve kiosks.

“I don’t order my lunch from a company that doesn’t have an app anymore,” McWhirter said. “Kiosks still have a long life ahead of them. They’ll start to wane probably near the end of this decade.”

Ryan McWhirter

McWhirter, whose company presently has 50,000 kiosks on location in over 60 countries, currently has 250,000 monthly users using its order app and that number is growing. The company recently enabled its customer app to scan and pay.

“Operators love that (app) because it’s less expensive (compared to having a kiosk),” he said, although he acknowledged theft becomes a bigger factor in environments that allow mobile order and pay.

“With things like advertising and loyalty programs, we do see a lot of room for additional engagement for the app in ways that consumers might not be asking for, but we think they’ll enjoy once they get it,” he said.

Customers want options

Panelist Hank Green, vice president of food and beverage at AMC Theatres, emphasized the importance of offering diverse payment options to customers. The company has self-service kiosks for box office ticketing and recently began offering food and beverage ordering kiosks.

“The guest wants to transact where they want to transact in general,” Green said. “Some people want the mobile experience. It’s important to give them that. They know what they want in advance.

Hank Green

“(But) a lot of our guests have no idea. They want the experience of getting in the theater and seeing and feeling what they feel in that moment. They want a kiosk for that experience. They don’t want to order in advance. So we think it’s important to have both.”

In theaters that have kiosks, the kiosks account for 90% of the food and beverage sales, while mobile accounts for 6% to 10% depending on the theater.

“Mobile is great, but it’s not where the majority of our guests want to transact,” he said.

On the box office ticket side, ticketing kiosks did 70% to 80% of sales when first offered, Green said, which over the last 10 years has shifted to advance purchases using mobile.

Panelist Chris Smith, CEO and co-founder of Zunzi’s, a takeout and catering restaurant based in Savannah, Georgia which recently introduced a restaurant bar called Zunzibar, agreed it is necessary to have different payment options.

“It’s not fun to order a round of shots from a table from an app,” he said.

Smith said a quarter of the sales are mobile, a quarter from pay at the table, 20% from kiosks, 15% from online and 15% from delivery.

The servers are free to focus on the high-margin business — the bar — and also to focus on the guests who don’t want to engage with technology.

Having a mix of payment options also provides a restaurant flexibility with its work force, Smith said.

Chris Smith

Meeting the guest’s need

Smith’s company engages guests when they come in to see what they will be ordering: food, drinks or both. If ordering food, they are directed to the kiosk to order and get texted when the order is ready. For food with drinks, they get sent to a table where they pay at the table and the server brings the food and drinks. For drinks only, servers walk around and take the transaction on a handheld.

“We change our business model based on how busy we are,” he said. “We’re not trying to replace people with technology.”

As more payment options are introduced, venues need to educate customers in how to use them, the panelists agreed.

Lieber said customer education is important when it comes to optimizing ROI. When introducing kiosks, BurgerFi employees explain why they brought in the kiosk and how it will benefit them for order history and loyalty points.

“If you take that time and do the education piece, then the customers start to get more comfortable with it,” Lieber said.

BurgerFi also added a training module to help guests. The guests are now tipping more which helps the wages. This helped the employees get behind it.

“Everybody gets a share of the tips, including chefs,” he said.

“It is still highly dependent on the team in the location getting behind the experience,” Green agreed. “Our ROI where our field leadership is behind it is pretty good.

“When people are behind it, we see people spend more, they move through it faster and they’re more highly satisfied,” he said. “But if we are not behind the idea, we struggle.”

“It depends on the device that you put into the location,” McWhirter said with regard to ROI. The company has different-sized hardware options to allow the operator to tailor the cost to the location.

“Anything more than a year (for ROI), you’re probably a little bit over your skis,” he said.

What’s ahead?

What is next for customer facing technology?

McWhirter said 365 Retail Markets will be introducing kiosks that are smaller and less expensive.

Green said AMC Theatres has introduced a home delivery model as it continues to roll out food and beverage kiosks in theaters.

In response to audience questions, the panelists agreed it is important to educate employees that technology will not be replacing them.

To this end, Green said the trainer at his company has a new title — concessionaire.

McWhirter said businesses introducing technology should let the employees know it’s to help them make more money.

The panelists also agreed in response to an audience question that cash still has a place.

Lieber said BurgerFi maintains one POS in each restaurant and one cash drawer.

Green said AMC Theatres keeps an automated cash acceptor wherever they install kiosks. The company still sees 10% to 25% cash use depending on location.

McWhirter said 365 RetailMarkets makes kiosks that accept cash which is especially important in blue collar equipment.

Smith was the only panelist whose operation is fully cashless. When a guest wants to use cash, which is only 4% of the time, the restaurant often comps their meal and explains why they’ve gone cashless. As the company expands to more blue collar markets, he acknowledged this could become an issue.

Photo by Willie Lawless.

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