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Technology shapes next-gen food halls

Both front- and back-of-house innovations are improving operations, as well as the guest experience.
Photograph: Erielle Bakkum

As food halls have exploded over the past five years, operators have figured out myriad ways to make the concepts more efficient and profitable, notably through technology. The challenge: doing so without losing the personal touch that makes a food hall a food hall. Two recent openings have turned to kiosk ordering and proprietary software to transform the experience on the guest-facing side and in the back of house, respectively.

Aster Hall is haute cuisine meets haute couture. Located on the fifth and sixth floors of Chicago’s 900 North Michigan Shops, a high-end shopping mall anchored by Bloomingdale’s, it’s meant to serve the well-heeled set along with the working crowd from surrounding upscale office buildings and tourists floating in off the Mag Mile. Thanks to the use of large, self-serve ordering kiosks, ordering lunch is a little like window-shopping: Users see the goods before they buy.

“As the smartphone movement continues to happen, people in general are becoming more visual,” says Stephen Stoll, executive operations director with Hogsalt Hospitality, the Chicago-based restaurant group behind Aster Hall, in partnership with the mall owners. “We saw this as a great opportunity to showcase what people are going to eat before people order.”

In a traditional food hall, one might wander from stall to stall, peering over the counters and perusing menus while dodging lines and other guests trying to do the same. The experience of ordering at Aster Hall, however, is different: The entire menu is displayed digitally with magazine-quality photos of each dish from 16 different venues. If a guest sees something they like from Chicago Char Dogs, but also want a salad from Grateful Grains & Greens, they can order from both in one single transaction, and get a receipt that lists the stall numbers from which to pick up the order. The fact that Hogsalt owns all 16 of the restaurant concepts within Aster Hall makes this much simpler than if each stall was individually owned.

Stoll says it was designed this way for two reasons: First, design was incredibly important. The kiosks had to be customized to work with the aesthetic of Aster Hall. Second, he wanted to make the ordering process feel seamless, and none of the “off the shelf” systems accomplished that goal, he says.  

Reacting to kiosks

Overall it’s been a learning curve, Stoll says. Now more than six months in, the team has mostly squashed software bugs that frequently appeared during the first few weeks of opening. And while it’s proven easy to use for most patrons, not every guest wants to use the kiosks. “From a guest perspective, not everyone loves the technology—some people prefer the typical ordering experience interacting with another person,” Stoll says. Hogsalt has added that as a secondary option at Aster Hall, where guests can interface with a cashier if they wish.

While the cost of each custom kiosk was substantially higher than a standard point-of-sale unit for a typical restaurant, Stoll says he believes they’ll pay for themselves over time. “We have 11 order points, and it would be hard to replicate having 11 people ready to take orders every day at lunch and dinner,” he says.

Of course, the kiosk model is not new—it’s common in fast-casual concepts such as Veggie Grill and Wow Bao. Yet the idea is only beginning to catch on in food halls, Stoll says. It appears to mirror another trend: Full-service restaurants using more tableside POS units.

“When people think about more introduction of technology of restaurants, the initial feeling is negative, but from a consumer perspective, I think there’s a lot of good things that can come out of it,” says Stoll.

“We have 11 order points, and it would be hard to replicate having 11 people ready to take orders every day at lunch and dinner.” —Stephen Stoll

Back-of-house tech

On the other end of the spectrum, technology is helping back-of-house food hall operations run more smoothly. A first mover in that space is Politan Group, which has food halls in New Orleans, Miami and Chicago, with plans to open in Houston later this year. The group has developed a proprietary software platform and cost-sharing model with the goal of solving logistical issues for market vendors, freeing them up to focus more on the food. It rolled out the technology for the first time at Politan Row Chicago, which opened in May.

Will Donaldson, CEO and founder of Politan Group, drew on his past experience building co-working company Launch Pad when he got into the food hall business five years ago, knowing an internal accounting platform would be crucial to the success of his vendors.

“Chefs don’t go out of business because they can’t cook; they go out of business because they forget to pay their sales tax,” says Donaldson.

Politan Group’s proprietary accounting platform takes thousands of daily transactions, parcels them out by vendor and sets aside tips, state and local sales tax and so forth in separate accounts. It boils down into a single accounting entry that exports into vendors’ QuickBooks accounts, sending them money at the end of the day. Essentially, it automates the entire administrative side of running 13 concepts and generates daily detailed reports for each.

The daily cash flow is critical to chefs’ success, says Donaldson. “If we can keep money in their accounts on a daily level, it lowers their stress, allows them to stay liquid and gives them a longer runway,” he notes.

It also helps break up a common concern in the industry: “fear of the 1st,” or the beginning of the month when bills are owed. This streamlined system allows the chefs to hone in on their concepts—the quality of the food and building relationships with customers. Politan Group also handles key tasks such as food safety audits and contract compliance, further freeing up time for stall operators to be creative rather than analytical.

Another unique aspect of the software is an algorithmic comparison tool that analyzes things such as ticket averages. Meant to take some measure of subjectivity out of the creative process, it objectively determines how well-adopted a concept is compared to its peers. When a concept isn’t performing as well as planned, “it’s easy to ask, ‘Is it me, or is it the environment?”’ Donaldson says. The tool provides a tangible benchmark, he says.

While many other concepts are moving toward optimizing the quickness of ordering and receiving food, at least 15% of Politan Group customers spend more than two hours in the food halls, reports Donaldson. Having the system in place allows the operators to get out in front to observe and serve, as well as provide a sense of hospitality. “It’s having customers interacting with the brains behind a restaurant operation, communicating with the chef and connecting with that brand story.”

For both Hogsalt and Politan Group, the upfront investment costs—of both resources and development time—have been the only major downsides to betting on proprietary technology to help revolutionize the food hall space. While their systems are setting them apart in the food hall scene, it was never about competition for either company. For one, Donaldson is making Politan’s technology available to other food halls through white labeling. “We feel this is the right supportive attitude toward others in our business,” he says.

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