Magazine Article | March 19, 2014

Navigating The Changing Restaurant IT Landscape

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By Mike Monocello, editor-in-chief, Business Solutions magazine
Follow Me On Twitter @monocello

Experts advise VARs on the most significant trends in restaurant IT.

The hospitality vertical, including both restaurants and hotels, is experiencing an IT revolution similar to what we’re seeing in retail. Andre Nataf, senior business development manager for Digital Dining, cites recent survey data that claims the average annual IT budget for restaurants is $26,000 per store. “That same survey stated that 57 percent of the restaurants polled were going to spend money on capital items,” he says. “If you couple that with the 3.5 percent increase in hiring according to the NRA, confidence is up, and it looks pretty good for POS (point of sale) companies in 2014. When confidence is up, spending and reinvestment go up with it. This is a different climate than we have had for the last five years.”

While the confidence and spending climate might be different, so too is the technology climate, which has created some new challenges. First, tons of technology innovation means there are a lot of new names (both vendors and new VARs) entering the market bringing with them new products, different pricing strategies, and new competition. At the same time, some incumbent VARs have been resistant or slow to stray from their core offerings. For aggressive, open-minded VARs, there’s never been a more exciting time to solve customer challenges with IT.

Ed McCabe, national sales manager, retail & hospitality for Panasonic, can provide a pretty good perspective on the opportunities, due to the breadth of Panasonic’s product offerings. “Digital signage will continue to gain momentum as the medium of choice for delivering information and targeted marketing to consumers,” he says. “Interactive kiosks are already being widely deployed in hotels and restaurants to display information such as menu items, upcoming events, meeting room schedules, wayfinding maps, and, in some cases, flight information.” He adds that the proliferation of IP surveillance has given rise to a data explosion. “We’re seeing businesses leverage IP surveillance networks to mine security data, not only for risk management, but to advance marketing efforts and tie into POS systems to increase overall efficiency and customer satisfaction. Facial recognition and intelligent video analytics are also increasingly becoming part of these deployments.” Finally, he believes innovations in payment solutions such as chip-and-PIN technologies and NFC (near field communication) will spread, creating new opportunities to engage with consumers.

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“Mobility is becoming a game changer and can no longer be discounted,” says Nataf. “If you are competing without mobility, you are not winning right now.” He goes on to say that the biggest trends have to do with a mobile hybrid model that allows restaurants to use tablet terminals as either fixed or mobile POS stations. “The reliability and peripheral choice combined with their availability on feature-rich mature products has given restaurants a path to better customer service and increased top-line sales.”

Jared Isaacman, CEO of Harbortouch, says that many restaurateurs have become increasingly interested in new features such as cloud-based reporting and POS management, integrated online ordering and reservations, and advanced loyalty functions. These are great features to offer your customers and can give a nice boost to your bottom line.

Another key trend in this market is related to mobile devices, service automation, remote access, and data protection. “As more guests carry tablets and smartphones, providing services and an experience tailored for those devices will become increasingly important as a point of differentiation, allowing guests to register, check in, check out, and interact with the venue’s multiple amenities and offerings,” says Joan Morales, director of channel marketing for Axcient.

Whenever mobility is involved (whether as an instore system or as a customer-carried device), there’s the need for adequate wireless infrastructure. Savvy solutions providers will offer their customers not just secure Wi-Fi access points, but partner with companies that allow those customers to monetize the guest Wi-Fi and/or make use of customer data.

Of course, with all the changes going on, your best bet will be to maintain existing sales while branching out where appropriate. Indeed, sales of traditional POS systems continue to be strong. IHL reported that shipments of traditional POS were up 3 percent last year. Not shock-the-world numbers, but consider the size of this market, and you’ll realize that the opportunities for traditional POS are still considerable. That said, you can’t ignore the changes taking place. It’s acceptable to address the traditional needs of your customers, but only if you’re willing to guide them into the future. If you’re not, you’re doing them a disservice.

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