Supermarket cafés have never exactly been at the forefront of anything. Whether that be the latest trends in cuisine, delivering exemplary service, or using cutting edge technology. But maybe times are changing.
The Kiosk Revolution
For Tesco at least there is change afoot in its historically unexciting in-store cafés. It is to digitally transform its dining areas by introducing kiosks for ordering and hooking them up to elements such as kitchen automation, inventory control mechanisms, and menu management products. I’m not sure what all of that means but it sounds like it might be progress.
It certainly moves the cafés into the territory of the QSR operators that have become increasingly reliant on kiosks in their outlets. They are now a feature in all the well-known fast food brands and are taking a growing share of orders. Burger chain Shake Shack recently announced that kiosk sales doubled in its first quarter and they are now the highest margin channel across the company. Such has been the success of the devices, it is now planning to install them at all its 460 outlets by the end of the year.
When diners order by kiosk they tend to go for more items because they often include add-ons, they also tag on a beverage, and they also tend to eat in the restaurants that reduces packaging costs. Crucially, they can help cut labour costs because kiosks can be utilised when staffing levels are thin.
Kiosks to reduce labour costs
For some hospitality businesses the move to reduce labour costs through the introduction of technology is more aggressive. US-based fast casual chain Chopt has opened its first digital-only store with kiosks completely replacing the manned registers. In-store diners can order from QR codes and the food is then brought to the table by actual people.
The company says: “We had to reimagine every type of customer journey, and each step within those journeys, to make sure the technology was elevating the guest experience at this new restaurant”. This leaves me wondering whether the experience might have been elevated by having some human interaction in the journey.
Although recent research from Zonal and GO found a majority of customers now prefer to use technology in venues compared with a minority pre-pandemic, it also found three-in-five people still want to place orders and settle bills face-to-face. Those surveyed certainly recognised the upsides that technology can bring, with 50% valuing speed, 49% convenience, 40% ease-of-use, 38% feeling less pressured, and 24% accuracy. Against this backdrop, as many as 55% of people believe striking a balance between human interaction and technology provides the best experience in a dining venue.
This striking of the right balance will undoubtedly be an increasingly crucial aspect of the QSR and fast casual dining sectors over the near future. In these tough economic times, with the cost of living crisis and wage inflation running rampant the introduction of cost-saving devices like kiosks will become ever more tempting. The ongoing improvement of technology and the invariable reduction in the unit cost of such solutions will further add to the appeal for operators.
The major grocery chains are also dealing with a similar challenge. According to the Grocer 33 annual survey the customer service levels in supermarkets have fallen to a new record low and the sole reason for this is the soaring levels of queues at the checkouts. The reason for this is that many manned checkouts have been replaced by self-service checkouts. This has resulted in long queues for those people who prefer to have a human interaction at the tills.
Although the number of people preferring to use these manned checkouts is a minority of 20% this still translates into a meaningful number. With both the grocery and hospitality industries working on slim margins in a competitive environment the loss of any customers who prefer a face-to-face experience could be disastrous.
Operators must therefore take great care in how they handle the introduction of technology. Let’s hope Tesco is not tempted into removing the counter service within its cafés in favour of its glitzy new kiosks and alienating a chunk of its customer base.