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Posted Date: 4/4/2014

Top Hospitality Tech Trends of 2014

By Julie Ritzer Ross
There’s no denying it; when it comes to technology, players in the SMB hospitality space have traditionally been slower to implement technology than their retail counterparts. However, there has been significant activity on a number of fronts, with many restaurant and hotel operators seemingly going beyond the basics from a solutions standpoint.

“Mobile, loyalty, different ways to accept and place orders, digital technology—there really is activity in many areas,” says Andre Nataf, senior business development manager, Digital Dining (www.digitaldining.com). “There are a lot of avenues in this market for VARs to explore.”

Here, VSR takes a detailed look at seven top hospitality technology trends.

1. POS Goes Hybrid. Rather than implementing strictly traditional or strictly mobile POS systems, a cadre of hospitality players—restaurateurs as well as hotels with a dining component—are going the hybrid route. “We are seeing a greater number of implementations where, for instance, a restaurant with a bar keeps a traditional POS system behind the bar, but has pay-at-the-table in another part of the restaurant and on the outside patio,” says Jerry Wilson, director, XERA Business Development, Aldelo Solutions
(www.aldelo.com).

2. Loyalty Marries Mobile Payments. “It’s still early on in the process, but restaurants in general are latching on to tying customer engagement to the point of sale,” says Mark Bunney, director, channels and alliances, ParTech
(www.partech.com). “This includes a marriage of loyalty and mobile.”

A move into mobile loyalty by the Dunn Bros coffee house chain, though not specifically cited by Bunney, exemplifies such a trend. Dunn Bros franchisees can now offer customers a mobile app through which they can pay for their purchases, as well as find shop locations and a complete menu. The app automatically unlocks $3 towards any transaction at Dunn Bros for every $50 spent there. A portion of customers’ loyalty rewards may also be donated to neighborhood food banks. The Dunn Bros app is powered by the LevelUp (www.levelup.com) mobile payment and loyalty network, yielding its franchisees access to customer data for better understanding of purchasing patterns, as well as engagement tools within the app for segmenting customers and generating relevant offers.

3. Tablets Assume New Roles. The debut of more rugged, less expensive tablets is creating a push for the replacement of paper-based tableside order-taking methods with handheld devices. “Larger tablets are not especially practical for servers to carry around, which probably disuaded operators that otherwise would have tried out these devices before,” observes David J. Gosman, CEO, pcAmerica (www.pcamerica.com).

Even more interesting is a move among forward-thinking QSR operators to leverage tablets for purposes other than lane-busting. Gosman cites the example of a Middle Eastern QSR that runs pcAmerica’s Restaurant Pro Express POS software on iTouch devices. Although patrons order their food at the counter, staff armed with the devices circle the restaurant looking for empty wine glasses and indications that diners have finished eating, but are not in a rush to leave. Employees ask patrons whether they may bring them another drink and/or dessert, inputting orders into their iPads. The operator has seen a marked increase in check averages and sales since the system was implemented, Gosman says.

John Berkley, senior vice president, product at Mercury Payment Systems (www.mercurypay.com), also sees increased interest in tableside ordering technology among QSR players aiming to bolster check averages or simply offer diners a convenient alternative ordering option. Some pizza and sandwich shops, he states, accept orders not at the counter, but via the scanning of QR codes on the menu using a tablet. In some cases, the tablets are used for processing payments at the table.

There are tablet twists on the fast-casual front as well. John Nicewick, vice president of marketing, retail and hospitality at Elo Touch Solutions (www.elotouch.com) says some establishments in this category have installed tablet-based touchscreen solutions at each table for diners’ to self-order extra beverages and desserts. Pilot-testing of such implementations demonstrate that the average check size rises by 10 percent to 20 percent if diners can request additional items without waiting for a server to record their orders. “That’s a pretty impressive statistic for VARs to share” with prospects, Nicewick states.

In a somewhat different vein, single-unit restaurant operators and those with just a handful of locations are replacing firmware-based ECRs with tablet-based POS systems. “Primarily, they are looking at the low end of the spectrum,” notes Tracey Flynn, global industry segment manager, hospitality, HP (www.hp.com).

This pattern presents somewhat of a challenge for VARs, as “limited revenue can be generated by selling, for example, tablets alone,” Flynn says. “Going in with a bundled hardware solution is one way around it.” HP now touts such a solution; it comprises a tablet, stand, cash drawer and receipt printer.

Similarly, the expiration of the Microsoft Windows XP operating system this month may spur a migration to cloud-based tablet POS systems. “Almost every old-school POS system—the kind seen in a lot of small hospitality installations—runs on Windows XP,” says Jason Richelson, CEO, ShopKeep (www.shopkeep.com). “VARs need to let these customers know that if they continue to run XP, they will have no more access to patches, and there will be no virus protection updates. That means a high risk of data breaches, and it takes them out of compliance with the Payment Card Industry Data Security Standard (PCI DSS).  Moving to tablets and the cloud is a cost-effective way to get away from the risk.”

4. Operators Queue Up For Online Order Acceptance. Travis Young, CEO of onePOS (www.onepos.com), cites heightened interest among operators in solutions that enable them to accept orders online. Especially appealing, Young and other sources assert, are options that fully integrate with in-store POS systems and, as a result, allow price changes to be executed in one step rather than in multiple steps. The ability to accommodate as many customers as possible by permitting orders to be placed via restaurateurs’ own apps, as well as through a web browser, is equally desirable.

When pitching operators on the online ordering concept, VARs would do well to clear up the misconception that there exists only a limited pool of customers who want to order food via a computer or mobile device instead of on the phone or in person. According to a recent report by the National Restaurant Association (NRA), one out of five Americans “has ordered takeout food or looked up nutrition information using a tablet or smartphone.” Moreover, the report states that although a larger share of consumers who have used a smartphone or computer to interact with restaurants are 18 to 34 years old, “in general, half of all consumers claim that they would have no problem using a smartphone app to make takeout orders.”

Despite this appeal, it also behooves resellers to counsel customers to tie incentives into online ordering, advises Paul Constantine, president, ScanSource POS and Barcode (www.scansource.com). “Restaurants could offer special discounts for ordering online, and even send mobile coupons, to move more customers in this direction,” Constantine explains.

5. Menu Boards Get Active, Make Money. Although digital menu boards have been around for quite a few years, new variations on the concept are emerging. Notably, QSRs—which sources deem the biggest growth area for the technology—are replacing static digital menu boards with interactive flat-panel displays. About 20 pilot tests of outdoor interactive digital menu boards and Panasonic technology are currently underway, reports Rick Albert, vice president, retail and media solutions, Panasonic (www.panasonic.com). Some have been initiated at smaller chains, among them Taco John’s. A Taco John’s location in Cheyenne, Wyo. is testing an outdoor interactive flat-panel menu board in one of its drive-through lanes, while another unit in Ft. Collins, Colo. is conducting a test of an identical menu board inside the store.

“For QSRs, outdoor interactive digital menu boards, in particular, are huge business. The catalyst being that the drive-through represents 60% to 70% of revenue and needs to be made more efficient as a result,” Albert asserts. The boards’ interactive component helps to speed customer throughput by eliminating the need for patrons to shout and/or repeat orders into often-faulty microphones. Order accuracy also improves, as do customer convenience and, in turn, satisfaction. These are points resellers can “talk up” to operators that may be wary about embracing digital signage, Albert points out.

Another emerging trend in digital menu boards is QSRs’ use of the technology to garner advertising revenues from companies whose products are served in their restaurants. “A small percentage of operators are selling advertising space on their digital signs to Coca-Cola, Pepsi and the like,” Albert reports. “This type of narrowcasting has a long way to go, but it is taking hold—and Tier One operators aren’t going to be the only ones getting in on it.”

6. Analytics and Reporting Abound. “The analytics and reporting piece is evolving into an increasingly big deal,” with restaurateurs and hoteliers alike striving to comb through data to identify everything from sales patterns, to which servers have the lowest check averages, to when fake tabs are being rung up and by whom, observes John Giles, president, Future POS (www.futurepos.com). “And there’s a big push for data aggregation to the cloud, to make the process a whole lot easier.”

FuturePOS has partnered with ISV Avero (www.avero.com) and is bundling the latter’s web-based software with its POS hardware. A solution called Slingshot consolidates data nightly from restaurants’ POS systems, creating reports for tracking costs, monitoring and managing staff performance and keeping tabs on sales.

Citing hard-dollar ROI figures for solutions of this type can help to spur sales. One seven-unit casual dining chain, whose gross annual sales total about $81 million, has realized an annual incremental margin of $200,000, or $5 per $1 invested, by deploying a software package that pinpoints which servers are under-performing their peers. The solution allows these individuals to be mentored to spark improvements in their check averages. A night club operator leveraged a fraud-and-loss prevention analytics tool to determine which bartenders in its 25-plus clubs had the lowest cash sales, then observed them to differentiate between those who needed extra training and those who were stealing. Two bartenders were found to have been siphoning off more than $15,000 from their transactions each year and were quickly terminated.

7. Hotels On the Big and Little Screen. The deployment of large digital walls in hotels is no longer limited to large chains; smaller players are catching on to the idea. Such screens, many of which are of the interactive touchscreen variety, are being used to entertain guests and provide information about properties and surrounding areas, as well as to allow guests to book reservations for hotel restaurants, spa services, golf tee times, and the like.

Nerraj Pendse, Elo Touch Solutions’ director of product management cites an innovative touchscreen deployment by a hotel that swapped out a rack used to hold brochures spotlighting local attractions for a large interactive touchscreen. Guests can scroll through the offerings, tapping icons for attrations that they are interested in learning about.

Exactly which of these trends will continue to gather steam and which may peter out (only to be replaced by others), is anyone’s guess. However, VARs that want to succeed in the hospitality market must remain open to all possibilities.

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