Whipped Cream Difficulties

We have a noodle truck at the office on Thursdays.

And it is pretty damn good.

And they take credit/debt cards. You’ve seen it before, haven’t you? iPad with a credit card swiper, pick your tip, sign, have your receipt emailed to you?

This observation isn’t original to me, and I’m not sure it is terribly profound, but: services like Square have revolutionized credit card processing. I remember the old days, when setting up a merchant account was hard to do, and you needed a phone line, and you needed bulky equipment, and the credit card processors charged enormous fees. Now? I’m kind of far from retail, so I’m not sure if Square has resulted in downward pressure on fees (though I suspect it has).

Someone I know who is in retail and takes credit cards reviewed an early draft of this post and provided this information: they pay 2.61% for credit card processing, but each month’s statement also contains a laundry list of “cryptic inexplicable fees” that they have to pay as well. Square claims to charge a flat 2.75% for swiped transactions (Visa, MC, AmEx, Discover) with no additional fees. (I say “claims” because I have not used Square and can’t verify that for myself.)

Square also claims to deliver your money in one to two business days, no matter what type of card it is. The retail person I know says that AmEx fees depend on how long you let AmEx keep your money: they let AmEx hold their money for 15 days, and pay between 2% and 3%.

But fees aside, anyone who has a bank account can take credit cards these days, and all you need is an iPhone or iPad (or a supported Android device, though frankly that looks a little painful). Little to no bulk, no landline, and the money goes into your linked bank account.

The big thing, as I see it, isn’t the merchant charges: it is the portability. Your credit card machine is your phone or tablet, and it fits in a trailer. Or in a pocket. And you don’t need anything else – you don’t even need a printer, you can just email receipts to your customers. (Okay, you might want a charging cable, depending on how good battery life is on your device. But other than that, nothing.)

==

When I was in San Antonio for Worldcon, we went to the Magnolia Pancake Haus. Magnolia is pretty popular, so of course there’s a wait. They had a queue management system I had not seen before.

The systems I’ve normally seen were “pager”-based; they take your name, hand you a pager-type device, and it buzzes when your table is ready. I’ve often wondered why someone didn’t build a text-message based system for this. Almost everyone has mobile phones, many people have unlimited text messaging, and a text-messaging based system avoids many problems (like customers walking off with your hardware).

Magnolia took my idea a few steps beyond. You sign in at the front. They put your cell phone number into what I believe is an iPad-based app. You get an initial text message that a) confirms they put in your number right, II) contains an estimated wait time, and 3) also contains a URL that you can use to check and see how many people are ahead of you at any given time.

When your table is ready, you get another text message. You even get a thank-you text after you leave. I’m not sure if this was something Magnolia custom built, or an off-the-shelf app: Google does turn up some examples of the latter, including noWait.

It’s pretty easy to imagine extensions to this, many of which noWait appears to implement. If you can use the software to track average dining time or where customers are in the course of their meal, you might be able to get better estimates of wait time. If the dining room is full, but you know ten tables just closed out their checks, your estimate for a party might go from 30 minutes to five, and someone who otherwise would have walked away might stay. noWait also offers the opportunity for upselling customers. You can text them the nightly specials while they wait, or push appetizers, or whatever. (I wonder if you can set it up to offer discounts if the wait exceeds the initial estimate.) I’m not wild about that aspect of the app, but they do call it the restaurant business; you do what you gotta do to survive.

I can imagine even more extensions to this. For example, you’re thinking about eating somewhere 15 minutes away from home. You call the restaurant’s phone number: you get a computer-generated status message saying they have a 45 minute wait, and the machine offers to put you on the list. You punch “1” to get added (they already have your cell phone number from caller ID) and linger at home for another 25-30 minutes before starting the drive. You get there and park just a few minutes before the text arrives that your table is ready. If you get caught in traffic, you can use something like the Waze “Send ETA” feature to let the restaurant know you’ve been delayed, so they can swap line positions with someone else and still seat you close to the time you get there.

I can also see easy ways of tying these apps into the restaurant website itself. Imagine a widget in the top right hand corner: “The current wait for a party of four is (N) minutes”, updated in real-time. We already have this for emergency rooms, why not restaurants?

Even better: if you know you’re running a 45 minute wait every night of the week, and you know you’re turning X number of tables each of those nights, and you’ve already got your financials lined up…well, that’s something you can take to the bank when you apply for that loan to expand into the vacant space next door, or move to a larger location.

Applications like these have the potential to take much of the friction out of the waiting process. And it follows that, the more friction-free the process, the more likely people are to follow through with it.

==

Over ten years ago, I went to Aureole Las Vegas. I wanted to go there for two reasons. One was that I wanted to see the wine tower. The other was that Aureole kept their wine list in a database, and had a program running on Tablet PCs that allowed you to browse the list. Since it was on a Tablet PC, there was room to add comments about the wine from the sommelier or other sources. If you tried to do that with a printed wine list, it’d probably be the size of War and Peace and the restaurant would go through an entire old-growth forest every month. At the time, this was a pretty big deal at the intersection of dining and technology; if Aureole wasn’t the only restaurant in the country that had a system like this, you could count the others on the fingers of, at most, two hands.

Fast forward to 2014. The iPad wine list is becoming more and more common. A Google search for “ipad wine list app” turns up more apps than you can shake a stick at. Aureole switched over to the iPad at some point.

Michael Symon’s Lola is a perfect example of where we are now with this. I wrote about that back in July, and I won’t recap very much here (except to say that I still think the “email me the label from my bottle of wine” feature is really, really cool.)

Extend this a bit more. If you can do this with a wine list, why can’t you do it with an entire menu? There are many places, especially at the higher end, that change menus weekly or even daily, depending on what’s available that is good and fresh. How much easier is it to push a new menu out to an iPad instead of printing new ones every day?

(This doesn’t have to be at just the high end. Chili’s changes their menu what, every quarter maybe? How much do you suppose Brinker International spends on printing new menus and table cards, and sending them out to all the Chili’s locations? I figure that stuff gets printed centrally and shipped UPS or FedEx to each restaurant. And then you have to dispose of the old menus, which probably aren’t recyclable (coated with plastic and all). Chili’s could actually use that as a selling point: “We’ve gone green. No more paper menus.”)

Extend this a bit more. What if the database that feeds into your menu app also contains a list of all the ingredients in a dish? And what if the menu app allows a customer to specify an allergy? Say they have a shellfish allergy; they put that into the iPad app, and the menu immediately changes colors like a stoplight. Dishes in green have no shellfish, dishes in yellow normally do but can be made without, dishes in red will kill you dead if you order them. The customer places the order on the device itself with the relevant constraints, and it gets wirelessly sent to the kitchen: “One order of shrimp pad thai, no shrimp”. No chance that the waiter forgets to tell the kitchen; what the customer orders at the table through the iPad is what they get.

Extend this even more: tie the wine list and the menu together. For each dish, the app pops up a list of sommelier recommended wines – by the glass or bottle – at various price points. How much more likely are you to get a glass – or a bottle – if you see a little pop-up that says, “Chef Bob recommends this wine with this dish.” (If you wanted to, I bet you could even tie those together; “Since you’re ordering this dish, we’ll let you have this bottle of wine for 15% off the regular price.” I’m not sure if this would run aground on the shoals of state alcohol regulations, but it is a thought.)

There are all sorts of other ideas you can spin off the electronic menu. What if, when you ordered a dish at Lola, you could sign up for an email as well? When you get home, there’s an email from Lola thanking you for coming and including a nice photo of your dish (not some crappy Instagram thing, but a real professional photo that makes it look awesome), along with the recipe for that dish. Maybe you also include a link to a survey, or just an email address the customer can use if they have any concerns. Maybe you even throw in a small discount for their next visit. Do you think that would turn dining out into more of a special event? Do you think it’d make people feel better about what they paid? (I don’t mean to pick on Lola here; actually, I thought their prices were very reasonable.)

And then there’s the kids. Do you remember taking family road trips and stopping at Cracker Barrel or some other faux country store? Do you remember the games they had on the tables?

Why not put a version of that on the restaurant iPad? Or some other children’s games? Or even put Angry Birds on the tablet and let everybody pass it around while they wait for their food? That ought to hold the little bastards.

Of course, there are some problems to solve. How many iPads do you need: one per customer? One per table? What is the attrition rate of restaurant iPads? Do people spill water on them? Get food on them? Can you keep customers from walking off with them? And that restaurant iPad is $400, minimum. (Okay, $300 if you go iPad Mini.) What’s the ROI on an iPad as opposed to an inkjet printer and good quality paper? (Then again, you can’t upsell as easily on paper.)

(That would be an interesting scientific experiment. Take the Chili’s locations in Austin. Give half of them iPad based menu systems like I described, with the upsell and everything else. Have the other half stick with physical menus. And then see if sales for comparable periods are up or down year over year in the iPad and physical menu stores. Of course, if the Brinker group ever did this experiment, I’d never see the results of it…)

A bigger “problem” that I can see is that, as restaurants become more and more technical, with things like wait list apps and iPad menus, there’s a need for someone to manage that tech. Does Michael Symon have time during the day to do these IT chores for Lola? I doubt it. I believe at some point, the restaurants that choose to go down these paths are going to need to have at least one IT person on staff.

It might be possible for a couple of places under the same ownership to get by with one person for all their locations. Or someone could set up a service that does all the management for multiple restaurants remotely. I can easily imagine a system where everything needed for each restaurant is stored in something like an Amazon S3 cloud, rather than in servers on-site, and managed remotely by those third party companies. Then all you need is an Internet connection in the restaurant for the tablets and the “back of the house” applications for order processing and such…

(I haven’t even begun to think about the security implications of all this yet. My apologies to Borepatch, but that may be another post for another time.)

I think we’re creeping up on the point where chefs and owners are going to have to have some level of computer skill. Even if they delegate the day-to-day IT management to someone else, they’re still going to have to know enough to call “bullshit” when they’re being hustled. The Culinary Institute of America already offers “Current Issues in Hospitality Technology” and “Foodservice Technology” as electives in their Bachelor’s program; I don’t know how much time they spend covering these specific applications, but I bet it will go nowhere but upwards in the coming years.

(Somewhat related side note: have you noticed how much more willing waitstaff are to split a check multiple ways these days? It used to be most places wouldn’t split a check, or would do it only two ways, three at the most. Now it seems like the waitstaff is not just willing, but actually excited, to be able to split a check eight ways. I suspect point-of-sale systems have just gotten better and better; so much so that what used to require a lot of sweat can now be done by pushing a few buttons. And I also bet that waitstaff finds split checks = better tips.)

==

So why would anyone go that route? One big reason is that they can reduce staffing requirements. Amy Alkon linked the other day to a WSJ story about how restaurants are starting to use tabletop ordering devices as a way to cut staffing costs. An iPad doesn’t make minimum wage, and you don’t have to provide healthcare for it.

I don’t want to go into the politics of health care or the minimum wage. This post is nearing 2,000 words already and those seem to me to be tangential to my main points. But I do want to point out that my restaurant future isn’t without pain. I’ve never worked fast food or waited tables, but I don’t sneer at anyone who does honest labor. And I don’t think waiting tables is “unskilled” labor: I think it takes a strong set of skills and some character to do that and do it well. But I also think the skills can be learned. Waiting tables is something that you don’t need a college degree or even a high school diploma to do. In a way, it is kind of the last refuge of people like the single mom or the kid working their way through college.

What happens when the iPad based ordering system means the restaurant you work at needs two fewer heads? It isn’t just the high-end I’m thinking about here: Jack In the Box has begun shifting to automated ordering kiosks. (So at least I can count on them getting my “hamburger with ketchup and onions ONLY” order right.)

I see the day coming where fast food places are going to be staffed by one guy, and that guy’s only job is calling the right phone number when something breaks. Heck, you might even be able to do away with that; the Coke dispenser and the burger flipper can probably be set up to phone home on their own. In the near future, you might be able to run an entire fast food place with no staff, and no knowledge there’s a problem until the fire department calls you to tell you the roof is on fire. And I see the day coming where even the non-fast food joints only need a very small number of staff to deliver food to the table, keep drinks filled, and clear the table off when people are done.

I don’t mean to sound like crazy old Ned Ludd here, suggesting that we smash iPads so single moms can keep their jobs waiting on abusive assholes. I don’t know that the transformation I’ve outlined will necessarily take place (though I’d bet on some form of it) or if it does, what it will do to the job market for waitstaff and fast food workers. But I feel like I would be dishonest if I didn’t say that this is something that might happen, even if I don’t have a solution.

==

So what does all this mean? Here’s how I see it:

• The growth of food trailers is giving more people more chances to make the kind of food they want to make. I haven’t really touched on that in this post, as I feel like it has been well covered elsewhere, but that’s part of my equation. It has become possible now, with hard work, dedication, good food, and filling a gap, to start with a cheap trailer and raise enough capital to open a real restaurant.
• Square and similar services are aiding that transition. Your customers no longer need to have any jingle in their jeans or to hit the ATM that charges a $3 transaction fee; they can use their credit or debt card to make an impulse purchase based on nothing more than “Damn, that smells good!”
• Electronic queue management will reduce customer pain, if you run the kind of restaurant that has a queue. And reduced customer pain results in more money in your pocket. “Nobody goes there anymore. It’s too crowded.” Well, now you have the tools to let people know how crowded it really is, and to manage their expectations.
• Electronic wine lists and menus will allow chefs and restauranteurs new ways to provide different, and increasingly personalized experiences, to customers. Dining out, especially at the higher end, is going to become something special again.
• These things are going to require people to manage them. Titles like “Restaurant IT Guy” or “SysAdmin for Daniel” are going to become a thing, if they aren’t already.
• These things will also put pressure on the lower end of the job market. Technology is going to allow restaurants and even fast-food joints to serve more people with less staff. Then where does the student or the single mom with no skills go for work?

I could be wrong about all this. I’m not an expert in the restaurant business, just a casual observer and diner. And lord knows, I’m not saying that running a restaurant is going to be made easier by any of these things; you still have the basic, fundamental problems of restaurant management and ownership to deal with. (Food cost, relationships with vendors, customers, staff issues, your walk-in just died and 300 pounds of shrimp are rapidly rotting, etc.)
But some of the things I’ve outlined are clearly happening now. Others are just small matters of programming. Others (like the iPad at every table) may have to wait for another iteration of Moore’s Law.

I think these things are coming. But I welcome informed discussion and criticism from people who know more than I do.

One last note: I know I used “iPad” a lot. Technically, I don’t see any reason why these things can’t be done with Android devices or Kindles as well. But what I do see is that the iPad is so prevalent, and Apple has such a huge first mover advantage, that almost all of these applications are being targeted at IOS devices. That doesn’t mean I think the iPad offers a superior menu experience; I’m not that rabid an Apple fan boy. I just see that as being the way the market is going.

It doesn’t have to stay that way. I can see Samsung targeting the restaurant market with a sub-$100 feature stripped tablet device for menus and wine lists. Do you really need a camera on that device? (Perhaps. Let the table take selfies and email them to their friends?) Or more than 16GB of storage? I don’t see this as something Apple would do; historically, that’s not the kind of market they go after.

On the other hand, the iPad or good quality Android tablets are attractive to people. “Oooh, shiny!” But more than that, the iPad is responsive and fun to use. There’s a big difference in user experience between even a base level iPad 2 and that pile of slow and laggy Android tablets with crappy screens and lousy touch sensors that you bought at Big Lots. (Big Lots was actually blowing out an Android tablet of some sort for $30 before Christmas.) If you put crappy tablets on people’s tables, it stops being a fun experience that people tell their friends and family about, and starts becoming a tedious and annoying exercise that people talk about on Yelp.

(Speaking of “let the table take selfies”, I am reminded of my idea for a digital photo booth: like they have at Amy’s Ice Cream, but the camera would be digital, you could email photos to yourself for free, or print them on an inkjet printer for a small fee. I had this idea a long time ago, when digital cameras and GMail were both new and novel. By now, I suspect it has already been done better.)

(Cross posted to the Logbook of the Saturday Dining Conspiracy.)

This entry was posted on Friday, January 31st, 2014 at 6:20 pm and is filed under Android, Apple, Food, Geek. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.