Hundreds of millions of people—nearly 37 percent of Americans—eat “fast food” on a given day, making quick service restaurants a part of modern life.
Whether a Starbucks drive-thru, a mobile-order and pickup for a lunch burrito, or a busy family’s meal replacement plan, people eat at QSRs because of their speed, reliability, and low price point.
Modern QSRs depend upon technology to deliver on these customer expectations, from location-independent product consistency to the ease of ordering—i.e. on mobile, drive through, online, or inside the restaurant.
Connected products are the behind-the-scenes magic that makes QSRs work. Self-service kiosks, digital menus, mobile ordering devices, POS systems, and other innovations like new AI-powered drive-thru—are all types of connected products that facilitate QSR operations.
However, while technology can make ordering easier for customers or bring efficiency to the kitchen, it also adds new complexity and considerations for QSR operators. How should a QSR decide what connected products to add into their kitchen technology stack?
Make Decisions Rooted in Customer Experience
Customer experience is foundational to QSR success—“the customer is always right.” That’s true when it comes to connected products. There are many instances where technology might solve a customer problem but is unsuccessful because of a lack of consideration for how the changes will impact the customer experience.
For example, McDonald’s implemented AI-powered ordering systems earlier this year. McDonald’s is on the leading edge of using connected products, always looking for opportunities to use technology to improve their restaurants. To experiment with AI-powered ordering, McDonald’s worked with IBM to develop a system that allowed a customer to order as usual but used AI to play the role of the McDonald’s employee. The experiment showed promise, but the interaction often didn’t work in the way the customer expected. There were many customers that didn’t want to interact with a piece of technology at that point in the ordering process. Because of this, McDonald’s announced they were pulling the solutions out of stores for the foreseeable future. How AI will be used for QSR is yet to be seen, but this is unlikely to be the end of the story.
Meanwhile, customer-facing self-service technology like kiosks have become a mainstay in QSRs today. For example, consider Shake Shack. Like many QSRs, the burger chain implemented kiosks in select stores during the COVID-19 pandemic. As the pandemic subsided, Shake Shack incorporated positive customer feedback about their kiosk ordering experiences and decided to increase the number of locations where kiosks were their primary ordering channel. In those locations, sales have doubled.
Of course Shake Shack isn’t alone here: McDonald’s has also seen great results from self-service kiosks.
Connected products can put customers in control, reduce costs, and increase revenue—so long as they keep the customer impact as their North star.
Technology Where Everyone Wins
While there is a natural urgency to implement new technology and products as a quick fix, QSRs need to consider what areas stand to benefit from being connected, integrated, and even automated.
Consider Domino’s. Pizza delivery had great success for years taking orders over the phone. But manning the phones is expensive, requiring a lot of time from employees. Additionally, variations made phone ordering difficult to manage for the store and the customer. Did you know that there are over 34 million combinations of pizza that can be ordered at a Domino’s? Should a customer want to consider various options over the phone, the employee would be tied up—leaving others calling in on hold. While having a person answer the phones offers a personal touch, it would just as soon impact the ordering experience.
Domino’s saw an opportunity to simplify the process through technology. They launched Pulse, a point-of-sale (POS) system that managed multiple restaurant operations, including ordering. Customers could order online, and the order would be automatically sent to the nearest Domino’s location to be completed. This reduced waiting time for customers and standardized each point of the ordering process, which made customers more likely to order again, supporting revenue growth. Pulse also enabled Domino’s now legendary Pizza Tracker, which tells customers exactly where their order is in the preparation and delivery process.
While Pulse significantly benefited the customer experience, Domino’s POS system also provided measurable value to the business. Domino’s online carryout tickets are 25 percent higher than phone orders, and the transaction takes place without in-store employee labor. By pushing customers to order through the technology, they kept overhead lower and freed up staff for personal interactions like customer service or communication.
Everybody wins.
Understand When to Build and When to Buy
Another question a QSR must consider is whether to build technology solutions in-house or outsource. A bespoke solution can mean years of development and management while an off-the-shelf leverages external expertise and scale. How do you know in advance which is which?
When deciding what technology to implement and how to use it, Chick-fil-A takes a “Buy when possible, build when necessary” approach. They embodied this principle by spending years developing a solution to manage the remote device technology behind their restaurants. They built a chain-wide, edge computing system that is used in combination with several smart equipment devices, like mobile ordering tablets or even fryers and grills. Their Kubernetes-based system allows large quantities of containerized applications to interact with Internet of Things (IoT) devices—plus various data sources across their restaurants. The bespoke solution is scalable and flexible.
Their proprietary system shows Chick-fil-A is confident they can build and manage their own solution. But they’re not dogmatic about it either: If best-in-class SaaS products are available and fit their needs, they’re willing to invest. They keep both options on the table while asking “What are we trying to achieve?” and assessing what the resources commitment will be from start to finish.
Other things to consider: When deciding whether to build or buy technology, QSRs should identify organizational resources beyond the initial build. Will the technology require dedicated support? What’s the time commitment for repairs? Even successful systems will evolve over time and require maintenance.
Availability: The Linchpin of Connected Product’s Success
Once connected products have been implemented, the challenge becomes making them reliable and available. Because connected products combine hardware, software, peripherals, and internet connectivity, there are many possible points of failure. A lot can and will go wrong. A particular QSR location may have limited or unreliable internet connectivity. In addition, they won’t have a technical support person onsite in the event a repair is needed immediately. In other words, QSR technology needs to be able to function without constant oversight.
A device going down without someone noticing can have short term consequences, like a frustrated customer, and long-term consequences, such as lost revenue if that customer decides they’d rather eat elsewhere. For example, imagine a customer walks into a local QSR and tries to order at a kiosk. They spend time inputting and reviewing their order, but when they go to pay, there is an issue with the payment terminal. Most likely, no one at the restaurant is aware of this because the ordering software is operating as expected, and the kiosk appears to be working. But there’s a problem with the peripheral device preventing order completion. In this scenario, the customer either has to ask an employee for help, which they may or may not be able to give, or start all over at a new kiosk. Either way, their experience is negatively influenced, leaving a bad impression on the customer and the immediate potential for lost revenue. Meanwhile, fixing the device can require a costly onsite visit—i.e. rolling a truck to fix the device. Everyone loses.
To mitigate this risk, QSRs can put safeguards in place, like remote device monitoring and management solutions, that automatically alert or solve downtime issues and ensure the technology is available to customers.
Connected Products’ Long-Term Value for QSRs
From self-ordering kiosks to point-of-sale systems, connected products change how QSRs operate through technological advancement. Customers no longer order at the counter or leave cash on the table. Technology makes customer interactions faster and more predictable. Plus, restaurants keep overhead costs down while mitigating risks of human error.
But there is a new set of challenges that come with the proliferation of connected products. These devices are complex and increasingly interconnected, which means they pose a risk of unforeseen downtime and require round the clock monitoring and management.
Different approaches to implementation and scaling allowed major QSR players to thrive. But others still struggle. Key differences in the two groups come down to how they select and execute using technology.
Connected products must work to benefit the QSR’s customers and the business. They must clearly solve a problem. And once they’re implemented, the QSR needs to be sure they have a plan in place to automatically and proactively monitor and manage every device—including hardware, software, peripherals, OS, and network settings.
Without a considered approach to technology, quick service restaurants will end up with more problems than their innovative technology solves.
Steve Latham is a tech entrepreneur with 25 years of experience in the software industry. In 2013, he founded Banyan Hills Technology, which is now known as Canopy, and helps providers of connected products, like kiosks, smart lockers, and security systems, proactively attack downtime and improve customer experience. Prior to Canopy, Steve was the CTO for NCR’s entertainment division and launched the Blockbuster Express kiosk business, which RedBox later acquired for $125 million.