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How POS systems and other technologies are shaping the food service industry

Posted by the Wi5 Team30th September 2019General

Let’s take a deep-dive into the past, present and future of tech in the food service industry, looking at point of sale (POS) and other systems. What has had a lasting impact and what will survive the test of time? And, what lessons can a modern business owner learn from the development of these technologies, today?

The proof is in the pudding: What problems do technology systems solve?

 

An effective tech integration contributes to fundamental goals that are as true today as they were 50 years ago, and will be true 50 years from now. So, it’s safe to say you’ll always want to improve experience for your customers, save time for employees (and yourself), make sure the business is up-to-date with new trends and increase overall profitability at all stages of the supply chain. 

Historically, solutions that have become integral to delivering an excellent service in the food industry have always met long-term needs, not short-lived ‘wants.’ So, don’t get caught up in marketing messages or following trends. Before you deploy any new system (POS or otherwise), do your research and pinpoint needs in your own business.

‘Restaurants that focus on improving the customer experience are more likely to see an increase in sales. Choosing to integrate new ordering and payment technology will not only improve the customer’s experience but will positively impact the company in more ways than one.’ – Sajith Wimalaratne, Food and Beverage commercial consultant

Goals like improved flexibility, better processes, happier customers – they’re not going to change! But, the means to remain competitive will. Expectations are higher and, as technologies are introduced, more opportunities have presented themselves.

 

The rise of food service technologies

 

To know where we’re going, it’s important to know where we’ve been. We’ve come a long way since the invention of the plough. From the world’s first bread slicing machine to Ford-style assembly line processes, used by McDonald’s to put the ‘fast’ in ‘fast-food’, the industry consistently finds clever ways to be more productive and provide better service.

Now, the food industry is awash with tools and systems designed to make our lives easier. But, if you’re going to make a major investment in tech for your business, then you want to know that you’re introducing something you can build on and that will have a good return.

The difficulty lies in discovering which technologies of today are the game-changing solutions you need to scale up your café, restaurant or other chain business. Technologies that have been successfully introduced in the past, and are being introduced today, can provide some valuable lessons to help with future decision-making:

Administration and POS systems

As we entered the digital age, growing fast-food chains and coffeehouses began to take advantage of more sophisticated digital solutions for things like accounting, payroll, scheduling, inventory and supply management, loyalty schemes, and point of sale systems.

This developed into the current playing field, where a new pattern has emerged. ‘Restaurants use an average of three technology vendors to manage back-office operations,’ says Toast’s 2019 Restaurant Success Report, which isn’t likely to be a sustainable narrative for very long. Most businesses agree they would prefer all-in-one or integrated solutions that work with their POS system.

Key take-away: Integration is vital. Technology has to work together or businesses will quickly find alternatives that do.

Production and IoT

Long-gone are the days of the simple kitchen. There are CAD programs to design optimised kitchens and building information modelling (BIM) to maximise space and plan for the future.

And, we are starting to see Industry 4.0 technology – such as the Internet of Things (IoT) – have an impact. The first internet-connected fridges appeared in the early 2000s, but only gained popularity in recent years due to improved screens and cleaner, faster UX designs.

Commercial washers can now be networked to offer more precise, efficient cleaning. There are ovens that track energy use and suggest adjustments with self-interpreting HACCP readings, and operational managers can set their on-location freezers to alert them of impending failure.

The CMO of Swift Sensors, a cloud-based monitoring system, says:

‘The peace of mind of knowing the food is always kept at a safe temperature — even when the restaurant is closed — is difficult to calculate, but extremely important in ensuring the quality, reputation and brand of a restaurant. Over time, all restaurants will deploy this type of technology to improve their operations, and soon regulations and health departments will require it.’                    – Ray Almgren, CMO at Swift Sensors

Key take-away: Usability and fit-for-purpose are competitive differentiators. Tech has to present an easier, better path to achieving a specific goal than the alternative.

Supply and storage

Warehouse automation is predicted to lead the market between 2017 and 2023, with stock-keeping units (SKUs) using automated conveyors and retrieval systems for various operations. According to the Retail Automation Market report, this sector will be worth 19 billion U.S. dollars by 2023.

With applications to monitor and reduce food waste, and farms using big data analytics to increase yields, food and drink is more available, sustainable and efficient with technology.

Key take-away: In the food industry, you’re not just storing food products, you’re storing data. By gathering more data than ever before, you can use it more effectively to inform decision making. 

Wi-Fi as a service

Internet cafés are now as confined to history as the dinosaurs. WiFi has rapidly become a vital offering for any eatery looking to attract students, remote workers, entrepreneurs and, well, anyone with an Instagram account.

According to Toast’s 2019 Restaurant Success Report:

‘The most important restaurant technology for restaurants is Wi-Fi availability, with 69 percent [of participants] marking it as extremely important.’

The internet service provider (ISP) market has grown by 4.2 percent over the last five years. With global commitments to upgrade infrastructure to provide faster and better broadband, and the UN declaring the internet a human right, QSRs and other chains are recognising that providing free Wi-Fi is no longer optional: it’s a must.

Key take-away: Once technology becomes mainstream, customer expectations rise to new levels. Businesses need to adapt or risk being left behind.

Customer service automation

Automation is transforming retail and hospitality. Up to half of customer-facing jobs could be automated ‘once known technologies are fully incorporated’.

Between 2015 and 2019, McDonald’s (among other fast-food chains) has rolled out robot-run restaurants, voice-activated drive-thru’s and all sorts of automations. 

That may all seem quite far-fetched, but there’s plenty of evidence of automation in our eateries, today. For example, consumers are becoming more familiar with different payment methods, including smart kiosks and mobile Order & Pay solutions.

Payments are being tied to other parts of the service cycle, with integrated POS systems now able to connect with inventory management, and even customer loyalty software. Rewards aggregators, like coupons or collecting stamps, are quickly becoming a thing of the past. Now, loyalty can be used as a way of automatically gathering customer behaviour data over time and feeding that information back into the business.

Key take-away: Invest in technologies that fit into an automated future, where data is as much a commodity as the goods being bought and sold, and contributes to a connected ecosystem.

 

Where’s the money? The development and integration of POS systems

Your methods of order and payment represent two vital touch-points between your business and the customer.

The first modern POS system emerged in the late 90s with Martin Goodwin and Bob Henry’s IT Retail system, which ran on Windows, combined with the ViewTouch touchscreen interface. This began a payments revolution in the food service industry, where today POS systems are standard.

Now, we’re seeing another surge of development in recent years as restaurants and other establishments struggle to differentiate themselves in a market that’s feeling the squeeze. From June 2018-2019, UK restaurant closures have increased by 25 percent. So, businesses need to be ready to make quick decisions and take a modern approach to survive.

Our advice? Tech that integrates with flexible POS systems to create an all-in-one solution represents a direct boost to your bottom line and productivity:

 ‘More than 75 percent of restaurants surveyed believe that … having all departments connected through one platform, being fed information from the POS, provides actionable insights to lower costs by 5 percent and increase productivity by 50 percent.’ – Matthew Hardoon, MarketMan Director of Sales

This survey’s breakdown of priorities clearly indicates that POS systems are coming out on top, simply because they are developed to integrate with more and more services:

Image courtesy of Toast’s ‘Restaurant Success in 2019’ industry report.

 

Does your POS system also provide or integrate well with inventory management, a loyalty scheme program, invoicing and business intelligence reporting? It can certainly cause administrative headaches if these pillars of food industry technology don’t work well together.

What’s more, the global payments market is seeing a sharp increase in revenue as business owners and end-users alike are more interested in exploring new payment options, such as mobile or contactless. See this graph from McKinsey:

Image courtesy of McKinsey & Co’s ‘Global Payments 2018: a dynamic industry continues to break new ground.’

It’s up to POS system vendors like Square, iZettle and Vend to ensure their systems allow for the integrations that their clients now demand. If they fail to, they risk being left behind by more flexible competitors.

Mobile Order & Pay is the way forward

Call us biased, but we have a bone to pick with mobile ordering apps, and we’re not alone. Gartner’s research shows that businesses are increasingly abandoning applications as return on investment (ROI) predictions miss their mark. Customers aren’t interested in having 20 different apps cluttering up their phone. But, mobile ordering is still a great option, if approached in a different way…

At Wi5, we offer mobile Order & Pay without the app. Instead, we integrate with your WiFi and use a splash page to create a better-than-an-app-like experience for your customers. They can view your menus and order and pay all in one place, without downloading anything. You don’t need to change your Wi-Fi provider or POS system provider, either. We integrate directly into your current systems. You can use behavioural data, like average transactional value (ATV) or order preferences, to benefit your decision-making and increase efficiency.

 

Looking ahead – will tech change how we eat?

The UK food sector is predicted to grow by 26.4 percent by 2024, with QSRs enjoying 30.9 percent of the market share and coffee specialists seeing a compound annual growth rate (CAGR) of 5.2 percent over the next five years (IGD forecast). And, the UK food-to-go market is up 2.5 billion pounds in 2018, which is three times as fast as on-premise spending.

To benefit from that growth, today’s businesses must have a competitive advantage:

‘Increasing adoption of retail automation solutions in emerging economies, incorporating augmented reality and virtual reality in the retail sector, and developing new retail automation solutions, act as growth opportunities for the retail automation market in the coming years.’ – Retail Automation Market report

We predict that there will be an exponential increase in transformational developments for food industry technology and point of sale systems. It’s clear that next on the menu is customer self-service. You’ll see things like mobile payments and mobile wallets, smart kiosks and appless Order & Pay solutions (we hope!) popping up everywhere, even in small to medium-sized chains.

With these developments, we’re opening new doors into the unknown. There’s a whole world of machine learning, artificial intelligence, robotics and IoT that is waiting to be explored. Technology will no doubt continue to shape the food industry to deliver better customer experiences and higher standards of service. It’s no longer a matter of ‘if’, it’s a matter of ‘when’.

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