Game plan for introducing automated retail

Consumers are more accepting of self-service technology than ever. But they're not adopting it overnight. For all the benefits self-service brings to the table, retailers need a strategy for bringing guests on board.

And that strategy relies heavily on the organization's employees who, as a whole, are taking more important roles in the technology age, according to a panel at the Self-Service Innovation Summit last month.

The panel, "Automated Convenience: How to Cash In" was moderated by Jack Frost, director of sales at panel sponsor Mobile Technologies Inc.

The Summit, held last month in Hollywood, Florida, is one of several industry events organized by Networld Media Group, the parent company of Kiosk Marketplace and Vending Times. The media company's next event is the Restaurant Franchising & Innovation Summit, March 20-23, 2023, in Coral Gables, Florida.

The employee must guide the customer

"The customer really needs to be guided by the employee," said panelist Neil Thompson, vice president of digital at HMS Host, which provides foodservice to airports and travel centers. HMS Host has introduced a self-checkout food and beverage cooler called "Swipe, Grab and Go" to travel destinations.

"Employees leading the guest to digital has been really the secret sauce in our most recent success, and our adoption rates on technology in 2022 is hundreds and hundreds of times higher than it was in 2021," Thompson said. "That's because we're really focused on the associate — our employees as our ambassadors for guiding the guest through the appropriate technology for their experience."

Panelist Scott Ford, director of marketing at Innisfree Hotels, which owns 25 U.S. hotel properties, agreed. The company introduced a QR code to its menu that allows guests to learn about the offerings.

"It really came down to going to our team members in the front and scripting them on introducing the technology," Ford said.

"The hostesses would introduce the QR code menu videos and say 'hey, while you're waiting, feel free to scan some of the QR codes on the menu, and you'll be able to see how these dishes are prepared.' Once people came into the restaurant and were seated, they were ready to order. So we noticed over time that speeding up the process of that ordering increased our table turns, so we got an extra table turn in our restaurants each day, which basically increased our profitability by between 12% or 14% on a daily basis."

Selling a $36 sandwich

A video of a chef preparing a ham sandwich enabled the company to sell a $36 ham sandwich.

"There's a visual justification of the cost of that ham sandwich, and we sold a lot of $36 ham sandwiches," he said.

Introducing QR code ordering also gave the wait staff more opportunity to engage with the guests beyond just taking an order. The teammates are now more focused on providing hospitality – which is their business – than on transactions.

"It all started with scripting the first point of contact and having them introduce this technology," Ford said. "It's benefitted us in many ways."

Panelist Marcos Acu?a, founder and CEO at Qu!ck Scan & Go, an Argentina-based autonomous retailer expanding to the U.S., said the guests cannot be expected to adopt the technology on their own.

The hybrid approach

Acu?a first opened a store in Buenos Aires with both a traditional cashier and the option to pay using an app. After several months, 90% of the customers were still using the cashier.

Following the suggestion of a team member, the company introduced a fully autonomous store that did not include any cashiers. The store was open 24/7 and offered what Acu?a said was affordable pricing.

"We don't have labor costs, so we can give them affordable prices," he said.

Customer response was positive.

"People like to have the control of the purchase in the hand," Acuna said. "They like to know what they are buying. They like to know the prices, and they don't want the cashier to know it sometimes."

The 'knee-jerk' approach

When asked what they tried that didn't work, Thompson said his company's initial focus on adding technology as traffic returned following the pandemic did not work. He called this a "knee-jerk" approach that required a change of mindset.

Over time, the focus switched from the technology to the employee.

"What we're attempting to do is remove friction and create a better guest experience," Thompson said.

HMS Host now is looking to increase customer adoption of self service threefold in 2023. "We are absolutely going to do that and more," he said.

Customer education needed

Educating the customer about the technology is also important.

When HMS Host introduced mobile order-and-pay to its Starbucks restaurants, adoption was low at first because the customer did not know it was available, Thompson said. Adoption jumped in the double digits in recent weeks due to making sure customers know about it and making sure the company is delivering the experience.

Thompson credited McDonald's for training customers to use kiosks during COVID, a move that improved the company's economic model.

Thompson also credited The Home Depot, where an employee guided him to find a product which he then paid for on a self-checkout screen.

"What a great use of that unit of labor to provide this great guest experience and also remove friction where friction can be removed," Thompson said.

Banks have also done an excellent job using self service to expand commercial banking.

"Banks have completely changed their business model," he said. "Commercial banking grows without people. They've had a 250% increase in labor productivity over the last 30 years. The restaurant industry has seen a 20% increase in labor productivity over the last 30 years. That's not a lot."

Thompson acknowledged that the restaurant guest is not seeking technology in every experience.

"I think technology allows us to be very flexible," he said.

Which is not to say the process is always easy.

Acu?a had issues in choosing the right autonomous technology. There were several startup vendors introducing autonomous order technology with computer vision and sensors. He ultimately decided not to depend on a tech partner and had his own developers create an app. When he opened the first autonomous store, customers liked it.

Autonomous retail does increase opportunities for theft, the panelists noted, but theft hasn't been a major issue.

"It's not a barrier to deploying technology," Thompson said.

Team building holds key

How do they inspire internal teams to stay in the forefront, think outside the box and come up with ideas? Thompson said change is hard and requires an innovative mindset. HMS Host has developed testimonials from employees who enjoy the tools they have to give a better guest experience in an environment that is often unpredictable.

"HMS Host is only going to benefit from this change," he said.

"Transparency and exposure among your team is paramount," Ford said. "You need to bring everyone in to what you're doing. Not just make them the end user, but bring them into the process."

One hostess suggested placing QR codes closer to the floor in the waiting area and attaching some gamification so kids can play games as they wait. This was well-received, and it demonstrated the importance of involving the team not only in what they have to do for their job, but in other areas of the business.

"You never know where the next amazing idea is going to come from," Ford said.

Photo provided by Willie Lawless.