35 Percent of Restaurant Spending Goes to POS
At the recent MURTEC, held March 13-15 at Caesar’s Palace in Las Vegas, Hospitality Technology magazine presented the results of its 2013 Restaurant Technology Study. Key findings from the report reveal that the foodservice industry feels under pressure to enhance guest experiences in the front-of-house, while increasing efficiencies in the back-of-house.
When asked to identify spending by technology type, 35.28% of respondents said POS solutions was where dollars were allocated and 25.31% cited the back-office. The greatest portion of IT budget allocation in 2013 was going to hardware (24.72%), followed by software with 22.56%. One area that saw an uptick was budgeting for external service providers which rose from 10.3% in 2011 to 15.44% in 2013. This rise in expenditure is most likely indicative of the current trend towards outsourcing.
There was a pretty even split between back-end efficiency and front-end service in terms of what is driving tech spending. Back-end technology snagged roughly 36% with technology to enhance efficiency coming in with 35.7% and front-end technology scored 31% for enhanced guest services. Security technology was another area people were willing to spend with 29.5%.
The number one challenge facing restaurant tech execs is insufficient budgets with 35%.
Number two is insufficient technologies with 20%, meeting guest expectations came in with 16%, lack of internal talent had 14% and a company that doesn’t embrace IT scored 10%.
Another interesting point to take note of in terms of technology spending is a disconnect between what is being used and what operators consider important. In the front-of house there are many examples of low use, but high importance. Examples include: barcode scanners (14.9% use, but 26.1% importance), biometrics fingerprint reader (17.4% use, 29.6% importance), social media activity integrated into POS (11.1% use, 41.3% importance), integration to online ordering (31.9% use, 62.2% importance), bill pay via mobile device (0% use, 31.9% importance), tableside payment (8.9% use, 22.7% importance). In the back of house the greatest jump is seen in business intelligence technology with a 45.5% usage rate but a 68.2% importance ranking.
Two-thirds of restaurants will replace POS systems within four years. Here’s what we expect will be important:
From the results of this study, clearly, mobile POS is something restaurants want, but are holding out for durable, budget friendly solutions. About half of the respondents (51.1%) said mobile POS devices are too expensive, but 73.4% agree that mobile POS serves guests more quickly, 66.6% believe mobile POS terminals increase guest satisfaction and 53.3% say mobile POS terminals “wow” guests.
Key takeaways:
See more highlights from the presentation here, or download the complete report.
When asked to identify spending by technology type, 35.28% of respondents said POS solutions was where dollars were allocated and 25.31% cited the back-office. The greatest portion of IT budget allocation in 2013 was going to hardware (24.72%), followed by software with 22.56%. One area that saw an uptick was budgeting for external service providers which rose from 10.3% in 2011 to 15.44% in 2013. This rise in expenditure is most likely indicative of the current trend towards outsourcing.
There was a pretty even split between back-end efficiency and front-end service in terms of what is driving tech spending. Back-end technology snagged roughly 36% with technology to enhance efficiency coming in with 35.7% and front-end technology scored 31% for enhanced guest services. Security technology was another area people were willing to spend with 29.5%.
The number one challenge facing restaurant tech execs is insufficient budgets with 35%.
Number two is insufficient technologies with 20%, meeting guest expectations came in with 16%, lack of internal talent had 14% and a company that doesn’t embrace IT scored 10%.
Another interesting point to take note of in terms of technology spending is a disconnect between what is being used and what operators consider important. In the front-of house there are many examples of low use, but high importance. Examples include: barcode scanners (14.9% use, but 26.1% importance), biometrics fingerprint reader (17.4% use, 29.6% importance), social media activity integrated into POS (11.1% use, 41.3% importance), integration to online ordering (31.9% use, 62.2% importance), bill pay via mobile device (0% use, 31.9% importance), tableside payment (8.9% use, 22.7% importance). In the back of house the greatest jump is seen in business intelligence technology with a 45.5% usage rate but a 68.2% importance ranking.
Two-thirds of restaurants will replace POS systems within four years. Here’s what we expect will be important:
- Online POS for web ordering/payment: 51.2% up from 39.7% in 2012
- Mobile phone-based POS: 48.8% up from 37.7% in 2012
- Tableside POS for ordering and/or payment: 40.9% up from 32.9% in 2012
- Cloud computing: 36.2% up from 18.5% in 2012
From the results of this study, clearly, mobile POS is something restaurants want, but are holding out for durable, budget friendly solutions. About half of the respondents (51.1%) said mobile POS devices are too expensive, but 73.4% agree that mobile POS serves guests more quickly, 66.6% believe mobile POS terminals increase guest satisfaction and 53.3% say mobile POS terminals “wow” guests.
Key takeaways:
- Balance IT enthusiasm with expectations.
- The trend toward outsourcing IT is on the rise. Stay ahead of this trend, and stay relevant to the organization, by supplementing your IT skills with big-picture business savvy.
- 60% of restaurants will replace their POS. Integrated mobile ordering will be a must-have for many.
- In the back-of-house, the focus will be on adding business intelligence and real-time web-based reporting.
- Work to resolve the disconnect between being a business innovation leader and a technology innovation leader.
See more highlights from the presentation here, or download the complete report.