Don’t hang the pictures on the wall or fix the siding until you know the plumbing works. According to Karen Webster, that’s good advice both for homeowners and for QSR business owners.
Bypass Chief Innovation Officer Geoff Johnson says new technologies like selfie pay, robots that take orders and even mobile order ahead seem like QSR’s next big thing — and may, in fact, be the next big thing for some — but when the novelty wears off (and sometimes before then), can the merchants who are so excited to use this new tech meet the core competencies of their industry?
“It’s distracting for the merchant to see all of the large chains doing all these innovative things — some of which work for them, but some of which are just tests for something that may or may not ever be launched but make good PR fodder,” said Johnson. “But merchants, even the big ones, have to think in terms of the basics first: Can they take payments quickly in any scenario — on or offline — and can they do that securely? If they can’t do those things, then they’re building everything you want to do on a shaky base.”
Johnson is speaking for medium-sized QSRs with 50 to 100 locations — brands that aren’t big enough that customers will likely want to download a dedicated app as they would for Starbucks or McDonald’s, yet are too big for one person to know everything that’s going on within the company.
For such companies, being the first to roll out exciting new technology can be tempting, Johnson said. Merchants want an edge over the competition, and they think a mobile app or online ordering or smile-to-pay technology will give them that edge. But a weak foundation won’t scale with the business, so even if their bid for popularity succeeds in the short term, they’ll probably find themselves stuck down the road.
“Fundamental technologies are hard to change once you make a big decision,” Johnson emphasized.
Today, Johnson said by way of example, less than half of U.S. merchants are EMV-ready. Those who weren’t prepared for the shift had to buy new hardware when it happened, and many will likely have to do it again if eWallet transactions ever take off. As business owners notice the shortcomings of their new POS systems, he said, they’ll start bringing in other solutions to make up for it. It’s a cycle of effort and expenditure that no small- to mid-sized QSR can sustain.
“It ends up creating more work and expense for the merchants,” Johnson said.
One thing Johnson wishes more merchants would realize is that they can drive the growth they want just by doing the basics better. Something as simple as accepting cards, if they don’t yet, will increase revenue. Speeding up transactions by 10 percent to 15 percent will also boost sales simply due to moving more people through the restaurant in the same amount of time. And merchants who use technology to support a more efficient closing process will save on utility and labor costs, again feeding into that bottom line.
These non-customer-facing initiatives aren’t glamorous, admitted Johnson, but they get results, and fast. He said this is what merchants are really asking for when they come to them, saying, “We want to do something cool, new and exciting.”
However, said Johnson, “a lot of merchants do understand this need for a solid base, and they are benefiting from choosing a partner like Bypass, who builds a cloud-based POS with best-in-class security and speed.”
A recent partner simply wanted to become EMV-ready while also creating data visibility for franchise owners and corporates to analyze how sales were going. Their customers won’t see the difference. They won’t SnapChat about it to their friends. But that’s part of the core mathematics of running a business and will literally help them manage their business better and drive more revenue to the top line.
When it comes to new tech, Johnson thinks it’s still early days, and some of what’s being proffered as the future will never materialize. The key to success will be thoughtfulness, not speed. Consumers don’t always evolve as fast as technology does, and they don’t easily embrace the next big thing overnight. It takes time.
Successful merchants will think about how implementing new technology will affect their existing loyal customers. For example, mobile order ahead, as many postmortems have reported, take time to work out the bugs in servicing both order ahead and walk-in customers. Johnson recounted the story of a customer who visits the same bistro for breakfast every morning on her way to work. She orders the same thing at roughly the same time every day. Yet even though the café has introduced mobile order ahead, she has little interest in using it, and actually feels it has harmed rather than helped their breakfast business.
Yet, Johnson recounted, it’s almost as if she’s being punished for not getting the app, because now the employees are focused on filling mobile orders that other customers placed ahead of time for lunch that they want to pick up at 11:30 a.m.; and breakfast customers are paying the price — since there’s little evidence that mobile order ahead for breakfast is taking hold.
“There’s lots of great stuff that’s happening, and I think a lot of it will be beneficial to merchants,” the CIO said. “Some of the most powerful things that are happening, though, is simply making it better and more secure to accept payments and create a foundational layer upon which they can build. If they start there, they’re generally not going to be behind, because they have the option to add and layer new technologies that are right for their business.”
His advice? Invest in good plumbing. Don’t cobble together five different solutions; that piping won’t scale with the business. Instead, invest in POS solutions that are multifunctional — fast, secure, EMV-ready and NFC-enabled.
Then, maybe start thinking about smile-to-pay.