After interest appeared to be waning as demonstrated in its 2023 report, a new survey from software developer Qu shows fast-casual and quick-service restaurant brands are interested in kiosks.
In Qu’s 2024 State of Digital Report, 44 percent of respondents said they would likely add kiosks as a new ordering channel this year. It’s a major increase from last year, when just 10 percent of respondents said they planned to add the ordering platform.
Respondents who participated represented 179 fast-casual and QSR brands with a collective 62,000 U.S. restaurants. Of the respondents, 50 percent were a vice president or director, 34 percent were C-Suite executives, 12 percent were managers, 3 percent were labeled other and 1 percent were franchise owners.
Jenifer Kern, Qu’s chief marketing officer, said those surveyed have produced roller coaster results when it comes to the topic of kiosks.
“It’s had that sort of trend,” Kern said. “When I came into the industry in 2018, it was on the uptick, people were asking about them and it was around the time McDonald’s started putting them in in earnest.”
In the first survey during the coronavirus pandemic, though, there was less support for kiosks, with few surveyed expressing interest in adding them in 2021. Interest jumped in 2022, but dropped again for 2023.
McDonald’s is one of the QSR brands that began making a kiosk push before the coronavirus pandemic.
Kern said the up-and-down nature of kiosk interest is because of a multitude of factors. For example, during the pandemic, operators noticed customers being nervous about the cleanliness of the screen.
“I think another reason is because it can be very costly,” Kern said. “In one of our focus groups, there was a person there who said they spent over $10,000 just for the hardware of the kiosks. Restaurants are already margin challenged, so costs matter. I think those reasons are why operators backed away when they did.”
At the same time, after installing the hardware, Kern said brands often see higher checks, citing Shake Shack as an example.
“They really leaned into kiosks and have been rolling them out at all of their sites,” Kern said. “They’ve been boasting close to a 30 percent increase in check sizes. We’ve been running data on those who’ve been using our product and traditional kiosks, and we’re seeing between a 10 percent and 30 percent increased check.”
Kern said there’s a psychological factor at play, with customers feeling less rushed or pressured when ordering. Additionally, kiosks are able to cross-sell and upsell products more consistently.
Qu’s own kiosk technology is newer, with the company developing a “flex” POS system for restaurant counters that can also act as a kiosk. The POS system is Qu’s main focus, though, as Kern said the company focuses on using cloud technology integrating all channels.
“That way, operators don’t have to go to 10 different systems and menus to update them,” Kern said.
Tied for the second ordering channel most likely to be added were mobile apps and expanded delivery platforms, with each at 25 percent.
Another area garnering attention from the industry is improving loyalty programs. In the report, 80 percent of respondents said loyalty is not working for them.
Qu Chief Marketing Officer Jenifer Kern
“What we’ve been hearing loud and clear is that loyalty is broken and needs to be reinvented,” Kern said. “It’s still in this punch card mentality of buying 10 and getting one free. It’s very uninspired, and it’s not just the technology piece alone. It’s how people are treated in the store. I think there’s so much room for improvement.”
Two solutions Kern has been hearing from in the industry is making the program more engaging for customers and easier to get involved in.
“Frictionless sign-up is a big one,’ Kern said. “When you’re placing an order and get to the end, a cashier says ‘do you want to sign up for our loyalty program.’ With frictionless sign-up, that process is just punching in your phone number and be done, you don’t have to download an app.”
The topic of artificial intelligence also gained plenty of traction in this year’s report. Kern said in 2021, when asked about new technologies, just 13 percent said they were looking into machine learning and AI. In 2022, 70 percent said they were pursuing it for 2023.
For the latest report, Qu went more in depth by asking about AI priorities. The leading priority was AI-driven analytics, followed by AI-driven voice ordering and then dynamic pricing.
“What we’ve heard from the report and from focus groups is a wait and see mode,” Kern said. “They’re looking at larger brands implementing it and testing it to prove the use case. They’re also waiting for the price to come down.
“That’s the second piece,” said Kern. “It’s incumbent on technology companies to step up with better AI solutions that are cost effective faster. We’ve had AI learning in our mobile app for years. We have predictive analytics, too. We’re continuing to challenge ourselves, finding out where we can use AI in our analytics and other areas that will help restaurant owners adopt it faster.”
Other highlights included 42 percent of those surveyed reporting between 26 and 50 percent of overall sales coming by digital platform, an increase of 11 percent from the year before. Additionally, 77 percent of respondents said sales across all of their digital platforms increased in 2023.
The top drivers of digital sales, according to 56 percent of respondents, was third-party delivery strategies.