New Trends In Hospitality Technology – Time To Cut The Cord?
By Mark Buonagurio, Managing Partner, Retail Automation Products
Everyone wants the next great gadget – 4G, PS3, Wii, iPhone, iPad, iConfused? What does it mean, and in particular, how will it help my business? I’m a tech guy at heart, always interested in the latest offering, but one thing I’ve learned in my 17 years of business is that technology for technology’s sake is not always the smart choice. What we need to do is separate technology as a form of entertainment from technology that will have a real impact on our bottom line. It’s easy to get caught up in the “cool” factor, and not having an objective evaluation that demonstrates real benefit.
We can finally have our technology and use it too. They’re small, lightweight, portable, and yes, very cool! Handheld wireless devices are here, and they can have a dramatic impact on your business. They not only allow for at table order entry, but also add instant guest check printing and at table payment processing all in one integrated device. Until recently, this technology had only been widely used in other global markets, particularly Europe and Asia. What’s peculiar is that most of these wireless network technologies were developed right here in the United States. So why the lack of adoption? Some of it has to do with wireless frequency regulation in the US, and some of it has to do with cultural differences in the way Americans have used wireless technology. The good news is that over the past few years government regulation of the usable wireless bandwidth has loosened, and there has been a driving push for the technology from operators who are getting onboard.No doubt, the iPhone/iPad craze has had something to do with everyone wanting wireless, but let’s not forget we want to look at this from a business perspective, and the value add it may or may not provide.
Let’s explore some real benefits of the technology. Summer is almost upon us. Operators are busy prepping their curbside and seaside dining and lounge areas. These areas are usually sought out by patrons eager to bask in an outdoor setting. Unfortunately, operators usually tightly pack tables in these areas, making it difficult for servers to navigate. The result is frequent bottlenecks getting to and from traditional order entry terminals. Can wireless help? Studies have shown up to a 50% increase in sales in just such environments by implementing handheld wireless technology. Wait staff can spend as much as 10% of their time traversing back and forth to an order entry terminal, and waiting for it to be available for use. If you can eliminate those trips, then those servers can stay on floor with customers, increasing up sells, add-ons, and table turns. That can have a dramatic impact on your bottom line. We’ve all been out to dinner, and maybe wanted another drink, but our server could not be found. When the server finally arrives, often the result is a “pass” on that drink or dessert because we simply don’t have the time. That’s a lost revenue opportunity, but let’s put some basic numbers to it: If my average dessert price is $8 and I can sell 5 more desserts simply by having my staff ready to take the order, then I’ve added almost $1,200 of additional revenue each month or about $14,000 for the year! And that’s just dessert. A Dallas operation improved its table turns from 70 minutes, down to 57 minutes by using handhelds. That allowed it to add one extra table sitting per shift. You’re probably starting to see how this technology can help fill some gaps in your operation.
Let’s take a quick serve environment. If you’re grappling with the issue of long lines during peak service, then a wireless terminal might be just ticket to help speed the process. Such an implementation (also known as line-busting) can help retain customers, who in most urban areas have a limited amount of time for lunch. Have you ever gone into a quick service restaurant, started waiting on line, realized the line is too slow, and then walked out? I know I have, and unfortunately for the restaurant operator, that resulted in a lost sale, and maybe even a lost customer. I may have tried another place down the block and decided that it is now my regular lunch stop. That assumption may be a bit extreme, but in the economic climate we currently find ourselves in, we cannot afford to lose a single sale, or a single customer. I admit that wireless is not a silver bullet for success. We still need to deliver good product, in a pleasing environment, within a reasonable amount of time, but it can help the order process in time sensitive environments.
We’ve touched upon some of the real life benefits. Now let’s explore some of the various wireless technologies available, and what benefits each may provide. One of the reasons wireless has been slow for adoption here in the U.S. has to do with the lack of a standard for wireless networking. For some time now, the 802.11x platform (also known as WiFi) has been the most widely implemented platform for wireless networking. The problem is the “x” in 802.11x. This “x” has created a disjointed standard, which at its core really is not a standard at all. WiFi uses a relatively high frequency to communicate to the wireless access point on the network. Experts report that WiFi may or may not function optimally in a food service environment due to the risk of encountering dead spots, and potential interference from other common devices including cell phones, radios and microwave ovens. A typical open air range for WiFi handheld devices is about 300 feet, and is not very good at communicating through solid barriers such as walls, concrete, and glass. Additionally, WiFi based systems consume much more power than their alternative, resulting in a much shorter battery life for the device. WiFi based systems also introduce an added security threat since most hackers have developed schemes that target WiFi networks. The bad news is that most POS vendors in the U.S. that offer a handheld solution are offering a WiFi based solution. It’s important to understand what type of platform your wireless solution uses before you make the investment.
There is a better technology, one that actually works. In fact, it’s worked extremely well in the European market for over 10 years. It’s called RF or “Radio Frequency”. This type of wireless technology uses a much lower frequency than WiFi. Low frequencies travel much better through solid obstacles. An easy way to describe this is the sound you hear when you walk by a night club. You can easy hear the bass (low frequency), but you cannot hear the vocals (high frequencies). RF works the same way, easily wrapping around walls, and increasing open air range threefold to about 900 feet. RF based systems can also run up to 18 hours on a single battery charge, as opposed to WiFi that may offer just a few hours. RF devices tend to be smaller and lighter than their WiFi counterparts as well. And now the biggest difference: All wireless devices will drop off the network, WiFi and RF alike. The difference is that WiFi based systems can take up to 10 seconds to reestablish a network connection, while RF based systems can reestablish a connection up to 3 times per second! Since the reconnect happens so quickly, it’s practically transparent on the RF system. RF systems also tend to be much more secure than WiFi networks. The largest RF provider of handheld technology, Radiant System’s Orderman has been used for over 10 years in more than 30,000 venues worldwide without a single security breach! I would say that’s a secure network.
We’ve looked at some of the real benefits, and peeled back the onion on the various platforms. I would be remiss to not mention some of the challenges you might face when implementing a wireless handheld solution. First, handhelds are not for every concept. While they can add real value to casual concepts with relatively small menus, they would undoubtedly take away from the dining experience in a fine dining environment. Since the order screen is much smaller than a traditional terminal, they also tend to not be a great fit in concepts with very large menus with lots of modification choices. There’s also the small issue of cost. Sorry, they’re not free. While you will likely realize a fairly rapid return on your investment, these systems do require a significant upfront investment. On a traditional POS system, several servers will usually share a single terminal, but in a handheld environment, each server must have their own terminal. Additionally, introducing a wireless component to your network by definition increases the complexity of the network. These means more things can and will go wrong. You may also incur additional training costs for the wireless system. Most of the time we recommend a hybrid approach, meaning the system would consist of several traditional POS terminals augmented with a few handheld terminals in key areas of the venue. This approach tends to offer the optimal balance between functionality, reliability, and cost.
In conclusion, only you can know if this exciting new technology is right for you. If you take your time exploring the various solutions, and evaluate based upon your specific needs, then you are sure to be able to take advantage of all the possibilities wireless has to offer. If done right, handheld technology can offer that competitive edge, while making you the envy of everyone on the block.
About Mark Buonagurio
Mark serves on the advisory boards of several startups, and has been a guest lecturer for the Society of Food Service Managers and the Institute for Culinary Education (ICE). He is often sought out by investment groups for opinions related to the state of the hospitality industry. He continually seeks out new opportunities for growth, and remains a creative force at RAP PoS. Mark believes New York City offers a wonderful balance of both business and pleasure, where he now resides with his wife Debbie, and two young sons Evan and Dean.