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Technology

Are kiosks worth it?

Digital engagement is driving sales for some.

To kiosk or not to kiosk? Or, perhaps more to the point: In a smartphone age, why deal with the hassle—and cost—of installing kiosks? That’s a question that many operators are grappling with, knowing that kiosks can bump sales. But when done wrong, they can cause problems for the bottom line.

Any way to stay digitally engaged with customers is a good thing, says Erik Thoresen, principal at Technomic. “There is always a benefit to being tech-forward,” says Thoresen, who considers kiosks to be just that.

The early numbers on kiosks are enticing. A recent report in the Harvard Business Review notes that in McDonald’s earliest experimentation with kiosks—long before it rolled them out to thousands of stores—the company discovered the average check to be about a dollar higher (which was a 30% increase at the time). At the same time, 20% of customers who didn’t initially order a drink would buy one when it was offered, the report said. Panera Bread announced in the middle of last year that it has achieved more than $1 billion in sales from its digital platforms, which include kiosks. And stores with them, it said, tend to perform better than stores without the hight-tech Panera 2.0 model.

More recently, Subway has started to experiment with kiosks, too, although it ultimately plans to add them to only a limited number of stores, says Trevor Haynes, the chain’s chief business development officer.

At the moment, Subway has 40 kiosks in new or remodeled stores throughout the country. Haynes says if the kiosk tests meet expectations, the 27,000-unit chain could place them in a couple thousand stores—most of them in high-volume locations.

Subway’s kiosks are performing particularly well around college campuses and hospitals, but some of its less busy locations are seeing limited kiosk use, Haynes says. Across the board, though, Subway is learning that customers are interacting with the brand differently. Like at many fast-casual concepts with customizable menus, Subway diners are accustomed to ordering from an employee and walking down the line as their sandwich is made to their specifications. It takes a major adjustment to order from a kiosk instead, says Haynes. “Many people like to go through the line and talk to the sandwich artist,” says Haynes. “So it’s difficult for them to step away and engage with technology.”

Not only do customers have to get used to using kiosks, but employees have to be trained in how to use—and respond—to them, too, Haynes says. Subway store managers have noticed that some customers—particularly younger customers—like to “play” with the kiosks for a while, then order directly from the sandwich maker.

“They start to make orders, but don’t finish,” says Haynes. “It’s as if they just want the experience.”

But Colleen Wagner, co-owner of Lea French Street Food in Oak Park, Ill., has had a very different experience with kiosks. Wagner and her husband designed their fast casual around the kiosk concept. “We wanted customers to feel empowered to order what they want,” says Wagner. “Without kiosks, our menu wouldn’t have as many options.”

The two iPad kiosks are helping to reduce labor costs—by almost two employees—and increase check averages, she says: Orders made on the kiosks are averaging almost 50% higher than orders made at the cash register. A big reason for that are the higher-cost sandwich add-ons—avocado ($1.90), bacon ($2.00) and chicken ($2.50)—all of which are added more often by kiosk users.

“We want kiosks to be part of the experience. We want to curate that experience into something super modern.” —Colleen Wagner, Lea French Street Food

Still, Lea’s kiosks aren’t flawless. First, they are solely for ordering—customers still have to pay with a staffer. The reasoning, Wagner says: Food orders are processed quicker, and thus get out to the guest faster. Because of the two-step process, though, some customers find them cumbersome for smaller orders, such as a cup of coffee. And depending on the size of orders, an influx from kiosks can flood the kitchen. Fast-casual burger and salad concept Stacked: Food Well Built, which gives all customers the option to order via tablets, has gotten around this choke point by having a customer-facing system that speaks directly to the kitchen and helps guide workers to get orders out.

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