- Fast food giants are rapidly rolling out more ordering kiosks across the United States.
- They save on labor costs, are more accurate, and get customers to spend more.
- The kiosks are “a win on all fronts,” said Patrick Doyle, executive chairman of the RBI.
Major U.S. fast-food chains plan to aggressively add more digital ordering kiosks to their restaurants — and charge bigger checks in the process.
Burger King is planning a huge expansion of its U.S. kiosks after a pilot project yielded “huge results,” Josh Kobza, CEO of parent company Restaurant Brands International, told investors in November. The burger giant already has kiosks in more than half of its non-U.S. restaurants and plans to continue rolling them out as part of its plan to convert the company to “100% digital,” it said. .
Shake Shack said in February that it had deployed kiosks in “nearly all” of its approximately 300 U.S. corporate restaurants and saw its kiosk sales double in the fourth quarter from a year earlier. They account for “well over” half of its restaurant orders at those locations, CFO Katie Fogertey told investors in November.
Yum! Brands, owner of Taco Bell, KFC, Pizza Hut and Habitat Burger Grill, also focuses on kiosks.
Customers can order at kiosks at all U.S. Taco Bell restaurants. KFC had kiosks in about 500 restaurants in the U.S. by the end of 2023, “a huge step up from almost zero just two quarters prior,” Yum! Chief Financial Officer Chris Turner told investors in February. KFC plans to install them in the “vast majority” of its restaurants outside China by the end of 2026, Turner said in November.
Kiosks are lucrative for restaurants
Kiosks reduce labor, meaning restaurants can either hire fewer staff or deploy them in other areas of the business, like in the kitchen or at the drive-thru.
As wages rise in the industry, “restaurants have more incentive to seek labor productivity savings,” Sharon Zackfia, an analyst at William Blair, told Business Insider. With kiosks, “you’re basically able to direct work toward higher-value activities,” she said.
It’s Shake Shack’s “most profitable channel,” Fogertey told investors last August. In addition to labor savings, kiosk orders “tend to be geared toward dine-in” and therefore use less packaging than other digital orders, she said.
Kiosks also increase ordering accuracy and allow restaurants to easily adjust menu items – as well as their prices. And when kiosks are not in use, restaurants can use them to promote deals.
When Wendy’s kiosks are not in use, the company uses them to promote deals. Grace Dean/Business Insider
Diners are more likely to spend crazy amounts of money
Customers who order from kiosks tend to spend more money.
Shake Shack CEO Randy Garutti told investors in February that people who ordered at kiosks rather than at the register spent almost 10% more on average.
Kiosks can entice customers to add drinks or sides, upgrade to larger portions, or add expensive customizations. Fogerty noted that Shake Shack introduced new technology to “increase attachment rates and personalization.”
An ordering kiosk at a Wendy’s restaurant in London. He suggested adding bacon and avocado to a burger. Grace Dean/Business Insider
Andy Barish, an analyst at Jefferies, told BI that kiosks “100% of the time will try to sell you a larger item or ask if you want to add fries or chips and guacamole,” while cashiers d ‘a very busy fast food restaurant -The catering restaurant cannot “because there is a group of people trying to get through the queue as quickly as possible”.
And when customers order at kiosks, they feel less rushed, which means they “go through the menu and customize it more,” Sharon Zackfia said.
Kiosks can also promote items based on time of day, season and weather, such as frozen drinks on hot days.
And some kiosks allow customers to scan their loyalty apps to collect points on their orders, meaning kiosks can display personalized recommendations based on data they extract from customers’ loyalty apps.
Taco Bell kiosks in the UK allow you to collect loyalty points through the app. Grace Dean/Business Insider
Customers are “more tolerant” – and the pandemic may have helped
Some restaurants have been slow to introduce kiosks. “I think a lot of operators in the industry have struggled for a while with the idea of having to spend money on kiosks when in reality many consumers are walking around with a computer in their pocket to being able to order,” Jon Tower, an analyst at Citi, told BI, referring to restaurant loyalty apps on customers’ phones.
Although kiosks are common in fast food restaurants overseas, their rollout in the United States has taken much longer.
When Burger King began rolling out kiosks in the United States a few years ago, “consumers didn’t really embrace it,” Kobza said in November. “This situation has really changed…Consumers are more accepting of it in the United States than they were a few years ago.”
The pandemic means customers are “much more comfortable with digital orders,” Zackfia said. “We now have a preponderance of millennials and Gen Z who grew up with digital ordering, so it’s pretty easy to translate that to a kiosk.” Some older clients may need a little “handling over” at first, however, Barish noted.
Patrick Doyle, executive chairman of RBI, owner of Burger King, Popeyes, Tim Hortons and Firehouse Subs, told investors in November that the kiosks were “a win on all fronts.”
“My view is that we need to make this business 100% digital,” Kobza said. In the United States, digital orders currently represent only 15% of Burger King’s sales. “We should have all order taking done through digital ordering channels over time…that’s kind of our North Star to where we want to go with the company.”
Do you prefer to order at the kiosk or at the checkout? Email this reporter at gdean@insider.com.
businessinsider
