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McDonald's adds kiosks to follow New tech

On a Fort Worth corner, near a freeway offramp, Joe Jasper combines one of the oldest restaurant chains with some of the newest foodservice technology. 

Jasper's McDonald's, one of 20 local outlets he owns, was the first in North Texas to install order entry kiosks -- eye level, oversized touchscreens -- that allow burger lovers to bypass the cashier and order and pay electronically. 

In the kitchen, workers log fewer steps as a conveyor belt silently transports neatly wrapped breakfast sandwiches to a bagger who stands a few paces away. 

In the offing? Mobile ordering via smartphones in which "geofencing" and GPS allow restaurant employees to connect customers who order off site with their correct meal. 

The futuristic focus is part of a broader push at McDonald's, and within the restaurant industry, to court a new crop of diners who want better quality food and an experience that incorporates their gadgets. 

"Millennials or younger people are more likely to be comfortable with this technology but it's not surprising to see an older audience [try it], particularly if they see the convenience side of it," said Jasper during the busy morning rush. "We see families use it all the time, there's no pressure. You can order in the time that you want. 

"It is not the McDonald's you remember," he added. "It's providing another way to order at McDonald's quicker. You'll choose." 

Jasper, 59, installed the four kiosks in his Airport Freeway location in December. Since then, nearly half of the consumers who come into the restaurant use the kiosks.  Several said recently they find it easier than sometimes having to repeat the order to the cashier.

"I think I'd use it again, it's ... convenient," said Nick Ralph, who tried one of Jasper's kiosks recently to order chicken nuggets. "You don't  have to speak louder, you just do what you need to do."

Rolling out tech

For the drive-thru crew, next year Jasper plans to install digital menu boards in both lanes. A coming-soon McDonald's app contains an opt-in feature that allows the boards to recognize the consumer who placed a particular order. 

"It's about convenience and capacity," Jasper  said, facing a steady stream of cars flowing through the drive-thru lane. One car that died out, had to be pushed into a nearby parking space. New cars almost instantly filled in the gap. 

Inside Jasper's larger-than-normal kitchen, which doubles as a training center, cooks use a panini press-like grill, to crank out fresh --  never frozen -- burgers in 69 seconds cooked to about 190 degrees. 

The fresh burgers were tested in North Texas, including Jasper's Fort Worth location, before McDonald's announced the nationwide roll-out. 

Across town, at a  franchised McDonald's in an older section of Richardson, two order kiosks already have been installed and more are on the way. 

Franchisee Jonathan Chan is the first D-FW McDonald's operator to roll out freshly baked goods and desserts under the McCafé line. 

It's all part of what the six-decades-old McDonald's calls its "Experience of the Future" restaurants. The "experience" is available at more than 500 U.S. restaurants and is expected to expand in D-FW to 100 restaurant locations by the end of 2017. Some of the innovations already have rolled out in Europe. 

Across the pond, customers can use Samsung Galaxy tablets, mounted tableside, to order custom "gourmet" burgers in the United Kingdom restaurants, according to published reports. 

Cost calculation

The technology surge is helping boost sales. But the risk, one expert said, is that increased operational complexity can add to labor costs.

"Technology continues to be a mixed bag in the restaurant industry," said Eric Dzwonczyk, managing director at consulting firm AlixPartners and co-head of the firm's restaurant, hospitality and leisure practice. "There still doesn't appear to be a lot of consumer 'pull' for many technologies, as food quality and price trump everything else. 

"On the other hand, millennials generally crave new technologies, so going forward the challenge may be how to balance diverse technology preferences across consumer groups, without compromising service and operations along the way," he said.

"Any time you increase complexity in operations with new platform roll-outs, it's important to have a comprehensive structure in place to help reduce the greatly increased potential for costly errors." 

Meanwhile, McDonald's investors -- some of whom no doubt recall 15 years ago when the stock sank below $13 a share -- are lovin' it. 

The stock gained nearly 6 percent last week to more than $141, as the nation's largest restaurant chain reported same-store sales that topped analysts' estimates.

That same day, the head  of Dallas-based parent of Chili's Grill & Bar told analysts that company also is "optimizing technology [and] creating a digital guest experience." 

Chili's, a pioneer in using pay-at-the-table technology, is upgrading its smartphone app to allow consumers to order and have the meal delivered curbside, said Wyman Roberts, chief executive of parent company Brinker International. 

Darren Tristano is chief "insights" officer with Chicago-based Technomic, a restaurant research firm. He thinks increased use of technology can give companies increased customer insights, especially when diner's use the brand's app. 

Technology also can "provide some opportunity for ... cost savings through automation and improved speed of service and accuracy if they get it right." 

Human factor

The dystopian dramatization of Restaurant 4.0 envisions Rosie-the-robot asking, "Do you want fries with that?" 

Indeed, Andrew Puzder, President Donald Trump's initial pick for Secretary of Labor, has taken heat for singing the virtues of a robot workforce. 

"They're always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex, or race discrimination case," Puzder previously said in an interview with Business Insider. 

Yet most restaurant operators bristle at the suggestion that the push to automation is really a bid to push workers out the door.

"There is no labor efficiency with the kiosk," said Jasper, as a worker in a neatly pressed uniform helped a customer navigate the new technology. "We changed how we use the resources. The people delivering [completed orders] instead of being cashier they now are bringing it to the table. 

"We've actually added people," he said.  "It doesn't reduce crew [size], what it does is make them faster and more efficient.

"People say you're doing it to get rid of people. No that's not the case. Table delivery requires more staff." 

Puzder has made a connection between the campaign for an increased minimum wage and the lure of technology to restaurant operators. 

Officials with the Fight for $15 campaign declined to discuss the implications of increased technology on the workforce. 

Instead, they released a statement from Anggie Godoy, a Los Angeles-based McDonald's worker who is a leader in the campaign. 

"If fast-food companies could replace us with machines, they would have done it already," she said. "The fact is, we are in the service business and fast-food restaurants are always going to need good workers. Just ask McDonald's executives, who have said that machines won't replace employees because we are an important part of the company's success."

Shawn DuBravac, chief economist for the Consumer Technology Association, compared changes in food service with other sea-changes that have impacted the American workforce over time.

"While Henry Ford's Model T put the buggy whip companies out of business those workers went out and found new jobs in entirely new industries that were created," he said.

"I'm optimistic that entirely new opportunities will be born," he added, noting that technology "can be very disruptive to  the status quo."

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