Contactless Transactions Are Here to Stay
In the spring of 2020, pivoting to contactless transactions was essential for restaurants — as dining rooms closed and the public became educated about the transmission of the coronavirus, touchless solutions were a lifeline for struggling businesses.
“The industry did an amazing job of adaptation in 2020 and hospitality technology companies added contactless order/pay capabilities at a speed that I’ve never seen in our industry,” says Giancarlo Fiorarancio, Vice President, IT & Hospitality Technology, at The Howard Hughes Corporation, which operates, among other properties, The Greens at Pier 17, a contactless full-service rooftop restaurant space at New York City’s South Street Seaport (pictured, above). “It proved that our customers are absolutely capable of adapting as well to digital ordering and payments and that there is very positive sentiment from customers when they are in control of the cadence at which they view a digital menu, customize an order and re-order as opposed to the cadence set by the service team.”
Now, as our industry moves ahead on the path to recovery, are contactless solutions still an essential tool? Top restaurant technology professionals say yes.
“Technologies like mobile ordering, self-serve kiosks, and digital menu boards not only reduce physical contact, but actually offer a rich personalized customer experience,” says Vadim Parizher, Vice President, Engineering and Analytics, at Taco Bell Corp., which continues to innovate on an ongoing basis, including its Go Mobile concept, which streamlines mobile ordering and pickup to the benefit of customers and staff (pictured, right). “But of course all of these systems have to be integrated, both on-premise and off-premise.”
HT research suggests that restaurant operators have a healthy appetite for investment in contactless and off-prem solutions. Forty-six percent plan to increase technology budgets in 2021, and 24 percent will implement new POS, according to our 2021 Restaurant Technology Study: Building the Next Normal.
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WHAT WE GOT RIGHT
“I think the severity of the economic climate in 2020 for operators and suppliers alike created a ‘perfect storm’ of collaboration that allowed suppliers to provide a business tool to sustain the operators,” says Toby Malbec, Managing Director, ConStrata Technology Consulting.
As we look at contactless solutions and the benefits they offer to customers — and opportunities for ROI for restaurants — It’s useful to take a look at what the restaurant industry has done right over the past year, and, more importantly, what that suggests for future implementations.
“Emphasis on drive-thru enabled many companies to continue serving their customers, even with dining rooms closed,” notes Parizher. “As volumes increased, the industry was successful in improving drive-thru efficiency. A lot of that efficiency came through use of technology, like increased mobile ordering, integration with third-party delivery providers, and employees using order-taking tablets.”
In addition to drive-thru, many restaurants — from QSRs to fast casual to full-service — inaugurated curbside pickup and, if they hadn’t already, implemented order-ahead/pay ahead services. “Many organizations upgraded their POS terminals to contactless card readers to allow guests to process their own transactions and mobile pay methods such as Apple Pay and Google Wallet,” notes Felicia White, VP, Global Operations Training and Development, at Church’s Chicken, which boasts a global, multilingual training program that leverages contactless technology. “While this was already in progress to promote PCI compliance, the pandemic sped up that process. And the industry quickly adapted to using technology such as QR codes for accessing menus — we even began using them at Church’s to facilitate training.”
In addition to curbside pickup, many restaurants sought efficient and personalized service via food lockers, allowing customers a measure of control over their ordering, payment, and pickup process from start to finish.
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A SHIFT TOWARD SELF-SERVICE AND PERSONALIZATION
We believe the shift toward off-prem and contactless solutions reflects an overall desire on that part of consumers for self-service and personalization. “Contactless in 2021 becomes another channel for the operator to provide to the customer and adds a dimension of flexibility to allow the customer to dictate the nature of the transaction,” says Malbec.
HT’s 2020 Customer Engagement Technology Study: What Do Guests Want Now? suggests that more than 60 percent of restaurant customers surveyed consider drive-thru and online menus, ordering, and payments to be key factors when they are choosing one restaurant over another. HT's 2021 Restaurant Technology Study: Building the Next Normal suggests that a full 96 percent of restaurant operators have either adopted online ordering for pickup or plan to do so this year.
“Giving the guest options for how they want to order, pay, and even receive service just helps to continue to define hospitality,” says White. “The end goal of our business is to build relationships between the service provider and guest. Service is specific to the individual guest and those organizations which flex to meet the guest needs vs. expecting the guest to flex to meet theirs are the ones who end up on top.”
While self-service and personalization in the QSR and fast casual space was already on the rise pre-pandemic, Fiorarancio points out that they have accelerated across full-service dining as well. “If you asked me in January 2020 how long before self-service and personalization became mainstream, I would have predicted a few years. I believe the pandemic has sped up deployment and adoption of these technologies by at least one or two years, and if anyone is opening a restaurant in 2021, I’d be shocked if they didn’t have some kind of strategy around digital ordering.”
LOYALTY & ANALYTICS
In addition to self-service and personalization, contactless transactions have the potential to bolster restaurants’ efforts in loyalty and predictive analytics by leveraging data like never before. From offering perks and deals to frequent customers to drilling down on customers’ ordering habits and preferences in order to create streamlined menus and opportunities for upselling, all that data can be a goldmine. But challenges remain when tracking guest behavior — and in integrating various solutions so that they can speak to one another in a meaningful way.
“Some contactless payment solutions require (or make it simple to provide) attainable guest identifiers that can be used to tie the guest to the transaction,” notes Joe Tenczar, Chief Strategy Officer, Sonny’s BBQ and CIO & Founder, Restaurant CIOs. “Transactions that do not require email address, phone number, or self-identification make this link very difficult otherwise. In many cases a loyalty program is in place only to have guests identify themselves and tie them to their purchases. If this can be done in other ways, there is generally more data and more success in understanding guest behavior. This behavior, at the micro level, will allow segmented/ targeted marketing including programs that benefit from understanding the customer lifetime value.”
The Open API Framework offered by the Restaurant Technology Network (RTN) offers a breakthrough in integration. “The past year and the rise of contactless transactions have literally put the restaurant’s POS system into the hands of their guests via mobile order/pay,” says Fiorarancio. “There are now seemingly hundreds of contactless transaction solutions on the market from startups to established market leaders. The challenge of taking these solutions and integrating it into an existing tech stack is still a problem in our industry and my hope is that initiatives such as RTN’s Open API Framework and additional competition in the space encourages providers to make their products easy to integrate with solutions so restaurants of all size can consider a ‘best of breed’ approach to technology that can be fully integrated with loyalty, analytics, CRM, etc.”
WHAT’S NEXT
Post-pandemic, off-prem and contactless solutions will remain high on restaurant operators’ investment to-do list because those solutions not only offer customers the choices they crave but also offer restaurants opportunities for efficiency and ROI.
“Church’s Chicken is continuing to upgrade in restaurant technology through point of sale system upgrades and implementing technology to support order ahead/pay ahead and curbside service,” says White.
Fiorarancio notes that, at the Howard Hughes Corporation, “We currently evaluate the technology from the viewpoint of the concept, the service style and the guest. There are many concepts where contactless transactions are not only a convenience for their guests but will reduce operational costs and complexity. However, contactless transactions in fine dining settings still need slightly more elegant solutions to match the ambiance and experience. Technology should never distract from that experience – it should only enhance or aid in it.”
Malbec advises, “Contactless needs to looked at in the entirety of the organization’s technology strategy and not simply as a ‘silver bullet.’ Those who implemented contactless as a response to the crisis should re-look and assess whether it is operationally efficient and integrates well with the other systems. Those who didn’t get around to implementing should take the time afforded to them to make a proper requirements review and assessment without needing to rush the process.”
As Taco Bell continues to expand its digital channels and streamline its mobile ordering and payments process, Parizher notes, “The preference for a contactless experience will likely persist for some time. Both customers and businesses have discovered that there are advantages to the digital experiences that accelerated in the past year.”