The current debate about a $15 minimum wage in California, New York, certain other states and cities – and now Cleveland – is stoking news about restaurants, retailers, banks and other service industries rushing to more technology and automation.
Business owners see an opportunity to improve customer service AND control the labor component of their P&L if payroll costs explode. This is an important decision considering the $15 minimum wage movement in Cleveland would be an 85% increase from the current $8.10, which is Ohio’s starting wage.
Technology is rapidly improving and consumer acceptance of mobile ordering, mobile pay, touch screens and kiosks is growing. Business owners have an opportunity to invest capital in technology to provide customers with more control and satisfaction … and this movement is growing rapidly.
The benefits of embracing mobile, in particular, can provide a competitive advantage. Your customers experience more control, convenience, speed of service and higher order accuracy. Systems also provide for loyalty and rewards programs. For business owners, the ability to capture data and utilize it provides limitless opportunities for marketing, menu development, pricing, etc.
At the ORA, we know this topic is critical, so we will continue to provide thought leadership. Our Mid-America Restaurant Expo in Columbus on January 29-30, 2017, will feature innovation, technology and trends – so mark those dates on your calendar.
Starbucks dominates this space and is worth studying. The coffee king said in January it is processing about six million mobile orders and payments per month in the U.S. At their coffee houses, you see more smartphones than wallets! After reporting a whopping nine percent increase in same-store sales for the Americas region, which includes the U.S., during the quarter ended Dec. 27, 2015, Starbucks said about 21% of U.S. transactions were paid using mobile apps, and that rate is accelerating. Customers average about five mobile orders per month. Kevin Johnson, Starbucks President and COO, says the mobile trend is even more apparent at the busiest Starbucks units, where morning peak demand is high.
“And we have just scratched the surface,” he said.
Recently, many major restaurant chains have announced commitments to innovation such as touch screens, in-store kiosks, mobile ordering, mobile pay, etc.
Dunkin’ Donuts says its new mobile app is the biggest service change the company has introduced since drive-thru. It allows customers to order and pay remotely so they can skip lines to collect their orders. On-the-go orders can be placed up to 24 hours in advance and pay automatically using the Dunkin’ Donuts card through the app (see link).
At chicken giant Chick-fil-A, the company's new mobile app allows guests to customize their order, pay in advance, and skip the line at the register. Food is prepared once customers "check-in" at the restaurant via the app, at which time they can head straight to the pick-up counter for their food (see link). Why is this important? A recent Chick-fil-A survey showed 82% of millennial parents "would do almost anything" to avoid long lines at fast food restaurants when they are with their children.
These trends are not limited to quick-service restaurants. We see new ordering and pay models in casual dining, fine dining, food trucks and pop-ups.
This movement is accelerating throughout nearly every consumer space and is a global trend.
The online marketplace Alibaba, which is bigger than Amazon, says its Alipay accounted for $1 trillion in transactions in 2015.
ApplePay claims one million users per week.
At Fifth Third Bancorp, which recently cut 114 branches from its system, the next big change to its branch system involves self-service centers. CEO Greg Carmichael says Fifth Third will focus on adding “digital self-service centers” as the next step in the process of revising how it delivers products and services to customers. “We will deliver faster service and better customer experience more efficiently” through digital self-service centers. Fifth Third has a location in downtown Cincinnati that has multiple advanced ATMs but no tellers or customer service employees. It will look to expand a similar concept across its system.
Let me know your thoughts on this subject and share your stories about this technology trend.
