Tech Check is a regular column on restaurant technology by Senior Editor Joe Guszkowski. It's also a newsletter.
When one ponders where the restaurant industry is heading, the answer is often to look at what retailers are doing. And right now, they are waving a big white flag over self-service kiosks.
Chains including Walmart, Target and Dollar General have begun scaling back self-checkout or ditching it altogether after it had become a staple at many big box stores for years.
This is in stark contrast to what’s happening in restaurants, where self-service kiosks are finally catching on as line busters, sales boosters and labor balms.
But before operators start fretting about their shiny new ordering machines becoming obsolete in five years, know that this may be a rare case in which retail is not a leading indicator for restaurants.
First off, one of the main reasons retailers are getting rid of kiosks is to cut down on rampant theft, or “shrink,” at the machines. According to a study by checkout tech provider Grabango, self-checkout shrink accounts for 3.5% of a store's sales, 16 times more than the losses from cashier-led checkout.
Indeed, stealing from self-checkout, whether on purpose or by accident, is as easy as keying in tilapia when you really got salmon. Or so I hear.
Theft simply isn’t a problem at restaurant kiosks, where all the action takes place before the customer gets their food. I’m not aware of any way to game this system besides time travel.
And while self-checkout machines have become a source of losses for retailers, self-service restaurant orders tend to be more profitable than the typical transaction. Customers are likely to order more food at a kiosk because of built-in upsells and the freedom to browse the menu more deeply than they might at the counter. (That is assuming, of course, that there’s not a big line of hungry people behind them.)
To be sure, some retailers have cited another reason for winding down self-checkout, which is that customers prefer the old-fashioned way. After axing kiosks from another 3,000 stores last month, Dollar General highlighted customer feedback showing that shoppers would rather check out with an employee.
I know I’m not the only one who avoids self-checkout if I can help it. And yet a lot of consumers still opt for it, even if they claim to hate it. The DIY method accounted for 55% of grocery transactions in 2022, according to data from VideoMining, which tracks shopper behavior.
Restaurant customers seem to have an ever more positive view of self-service kiosks. Sixty-five percent of all adults said they would use one to order at a limited-service restaurant, including 73% of Gen Zers and 82% of millennials, according to the National Restaurant Association. Granted, using a kiosk at a restaurant is much less complicated than at a grocery store, where the customer has to act as both the cashier and the bagger.
Now, the question of whether restaurants lose something in the way of hospitality by replacing cashiers with computers is certainly worth asking. The most popular response from operators has been to offer both options, which makes plenty of sense.
So when it comes to the future of self-service kiosks, I think restaurateurs can sleep easy. But they’d be foolish to think retailers are done innovating on the checkout process.
At clothing store Uniqlo, customers can simply toss their items into a high-tech checkout bin that scans the RFID tags embedded in every price tag. There’s no need for the customer to hunt for barcodes, and the system is more foolproof.
Convenience-store chain Circle K is rolling out a similar system that relies on AI vision to identify and ring up items. And then there’s Amazon’s Just Walk Out technology, which uses cameras and sensors to allow shoppers at Amazon Go stores to grab things, pay and leave without going through a checkout at all.
It doesn’t take a rocket scientist to see how these tools could apply to restaurants. But it can’t hurt to let retailers work out the bugs first.