The evolution of the kiosk

Last month was the twentieth anniversary of Argos trialing interactive self-service kiosks in 15 of
its stores to enable shoppers to avoid the queues. They were pretty clunky, with interfaces that
were far from intuitive, and they did not prove to be a breakout success for the retailer. They
certainly did not suggest that hospitality operators should jump in and follow Argos’ lead by
introducing such a technology into restaurants.

Healthy food concept Tossed was an early adopter of the kiosk in the foodservice sector some
years later when they took the form of compact tablets rather than the – pre-iPhone- arcade
machine-looking boxes that had been employed by Argos when the technology was very much
embryonic. The expectation at Tossed was that the kiosks would be removed over time as people
migrated to using their smartphones to peruse the Tossed menu and place their orders of salad
bowls.

This has not been the way things have played out and the kiosks remain a key feature in all the
Tossed outlets and the model it employed is now being replicated across the hospitality industry
as the kiosk seems to have finally come of age. Certainly my children are much more at ease using
kiosks in McDonald’s for various reasons including not being pressured into making quick decisions
when at the frenzied counter and the ability to scroll down the menu options (even though they
seem to always choose the same things).

Roger Wade, founder of Boxpark, was recently bemoaning the introduction of kiosk technology
into McDonald’s when he suggested he missed the buzz of face-to-face customer service when
popping in for a burger. This is exactly what my children are happy to avoid and they are clearly
not alone. As many as 23% of people enjoy kiosks because they do not have to interact with staff,
according to Vita Mojo. My pair of teenagers also happily sit alongside the 52% who like kiosks for
menu browsing and also the 46% who like the fact they remove the need to queue.

When factoring in these various positives it is no surprise that usage of kiosks has been on an
incredible growth trajectory. In the US BurgerFi found each of its kiosks captured on average 133
orders per day, which equated to around three out of every four transactions. It’s a similar
scenario at Shake Shack where more than 75% of sales come from its kiosks, and the digital
channels, where the technology is available. The company has stated its commitment to invest
further in the roll-out.

As well as the customer service appeal the key driver of kiosk adoption by restaurants is the
economic benefits. For starters, the survey found 61% of people would spend more via kiosks,
with this rising to 80% for Gen Z and 90% for Millennials. I’ve seen it first hand with my children
throwing in that impulse purchase of a McFlurry. This has also been the case at Leon -where the
introduction of the devices throughout its estate has been transformational – with average order
values increasing 12-15%. These figures are exceeded at other operators when cleverly deploying
recommendations of side orders or drinks.

But most telling on the financials is the ability to reduce staffing costs when implementing kiosks.
At Leon they typically had four to six people working on the tills but this has been reduced to two,
which has had a dramatic impact on the running costs of each unit. It is for these economic and efficiency reasons that Itsu is currently rolling out kiosks.

With the relentless focus on cost and efficiency of Itsu founder Julian Metcalfe it is no surprise that his gaze has alighted on the kiosk and the important role they can play in ensuring the future success of his business.

It might have been retailer Argos that tentatively set the kiosk ball rolling two decades back but it
looks like it will be the QSR and fast casual dining brands that are going to really leverage the value
from kiosks in the years ahead as they enjoy myriad benefits from the device.

Glynn Davis, editor of Retail Insider 

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Retail Insider would like to thank Propel for allowing the reproduction of this column.