Consumers driving the need for restaurants to adopt mobile solutions

June 5, 2013 | by Alicia Kelso

People have been trying to figure out how to keep up with technology for decades. That challenge becomes even more daunting when you consider the advent of mobile.

Noah Glass, founder of OLO online/mobile ordering, said mobile is the fastest growing technology ever, driven mostly by consumers who are adopting smartphones at a staggering pace; nearly 60 percent of Americans now own a smartphone.

Glass said brands are starting to add mobile as a new engagement platform for their customers, and the trend is similar to the late 1990s, when brands knew they needed to have a website. The trick to mobile is making sure your solution is functional enough to garner consumer interest.

"Brands know they need to have a mobile app now, but in order for a customer to download that app, you have to provide them with utility," Glass said. "It has to be functional and useful."

Functionality can come in the form of ordering (OLO, ChowNow, ONOSYS, EatStreet, etc.), mobile loyalty programs (such as a Front Flip, Punchh or Leaf) or payment solutions.

"Apps need to have a purpose — a loyalty or payment program, some interaction – not just the restaurant website re-created," said Sarah Erdman, with QA Graphics.

From a loyalty standpoint, Debbie Telsey, from Sunrise Marketing, said mobile is the best way to reach customers now because of accessibility.

"Email is spam. Nobody checks it anymore," she said. "If it's raining and business is slow, you can blast out a text special to drive business. Ninety-seven percent of mobile users who receive a text message open it within 4 minutes."

Payment positioned to skyrocket

At the recent National Restaurant Association Show, attendee and exhibitor consensus was that mobile payment is poised to take off in the industry. An indication of that trend is when NCR Corporation teamed up with LevelUp last month to bring their mobile payment/loyalty solution to NCR's restaurant POS systems. LevelUp will be one of the first companies to integrate into Cloud Connect, a new hosted infrastructure that will allow third parties to integrate, maintain and deploy the solution across NCR's install base of more than 100,000 locations on the Aloha, Radiant POS and Advanced Restaurant System platforms.

Heartland Payment Solutions also recently teamed up with LevelUp to jump into the mobile payments space.

Tony Ventre, senior marketing strategist for restaurants at Heartland, said consumers will continue to drive mobile payments at a quick pace and it's important for operators to find a reputable partner, not just a venture capitalist who is jumping into the space because it happens to be hot right now.

"With this, you're dealing with PCI issues, security; you need to find the right partners," Ventre said. "And if you find a solid solution, get it now. You have to make a move because it's moving so fast. And it can build your business quickly, too."

So quickly is the mobile space moving that Glass predicts we'll look back "10, maybe 5 years from now and laugh that we used to stand in line to make a payment to someone who had to punch in an order ...

"We have our own POS in our pocket and it makes for a better, faster experience," he said.

Audio, waitlist management and more

Loyalty and payments are the big focus areas, but there are numerous other functions that can enhance the customer experience. For example, NoshList recently released its waitlist app, which texts customers when their table opens up.

App provider HearTV Zone allows patrons to hear audio from any TV in the restaurant through their mobile or tablet device, eliminating the dilemma of choosing one game for the restaurant's sound system.

Rockbot allows restaurant customers to choose the music playing in the restaurant. There are even apps, such as Find Me Gluten Free, that point out the best places in the vicinity to eat if you're gluten intolerant.

And as apps become more dimensional, the basic search engine function remains powerful for both customers and operators.

"Mobile wraps everything up that we're used to — payment, loyalty, offers, etc. But in the restaurant space, the core competency is real estate and mobile can drive that without line-of-sight," said Henry Helgeson, CEO of Merchant Warehouse, which delivers payment solutions and analytics. "Customers check their phones to see what's around them. Search is and will continue to be a huge part of mobile for restaurants."

Operator benefits

Operators are beginning to reap the benefits of mobile solutions in both the front and back of the house. A new study from research firm IHL Group shows that the mobile POS market will surpass $2 billion in hardware/software sales in North America in 2013, and 28 percent of North American retailers plan to adopt Mobile POS in some form by the end of 2013.

GoPago recently unveiled its cloud-based mPOS solution, which enables line busting via smartphones.

"QSRs no longer have to run to the kitchen to communicate what they just wrote down on paper or be limited to a central POS station to accept payments. GoPago mPOS allows restaurants to turn tables over faster and provide responsive customer service," said CEO Leo Rocco.

Operators can also use mobile to schedule employees, to check their surveillance system and to maintain quality control. Electro Freeze, for example, introduced Genni last month, a soft-serve frozen dessert quality management app. The NoWait app launched its Floor Map feature last month, a customized, digital version of a restaurant's floor plan that allows restaurants to seat customers more quickly and optimize table turns.

"Mobile solves a lot of things for operators. A lot of it is new, but mobile has gone through the process of viability," Helgeson said.

Viability leads to capital; bubble next?

Because of that process, there is now a "flood of venture capital," as Helgeson describes, which is why mobile is more present in the restaurant industry as evidenced at the recent National Restaurant Show.

"Anyone can make a mobile app and last year's show featured a lot of novelty companies, many of which aren't here this year," he said. "But this year, there are better products. Developers are doing a lot of due diligence for merchants and the venture capital community is starting to understand mobile."

Ventre predicts we'll reach critical mass for mobile in the next three to five years. Helgeson agrees that it will be "a couple of years," and believes there will even be a bubble burst.

"People are throwing everything at this right now because it's an ideal solution for consumers and merchants," he said. "But we'll see oversaturation and then a few years from now, the leaders will emerge and we'll have a clear picture on what is really working."

Cherryh Butler contributed to this story.

Read more about mobile in the restaurant space.

Topics: Customer Service / Experience , Marketing / Branding / Promotion , Online / Mobile / Social , Operations Management , Systems / Technology , Trends / Statistics

Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine.
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