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OM in the News: Hi, I’m a Tablet and I’ll Be Your Waiter Tonight

July 1, 2014

ipad restauarntThe CEO of Panera Bread, who once declared that “the food business is not a technology business” has spent just $42 million to update Panera. “The goal is to eliminate friction points so that customers have a better experience,” he says.

Restaurants have been late to the tech party, writes The New York Times (June 21, 2014), and many are now scrambling to incorporate tablets, apps, computerized kitchen equipment and data analysis capabilities. Chili’s has added 1,200 computerized ovens that use conveyor belts, infrared technology and hot air to prepare food — at a cost of $100,000 per oven. Together with tableside tablets that allow customers to order desserts and alcoholic drinks as well as pay their bills and play games without the help of a waiter, new technology has helped Chili’s address one of its customers’ biggest complaints — slow service — and add higher-margin items to its menu. The Chili’s system is so sophisticated that it can ask different questions to customers based on their orders, soliciting opinions on a new special or dessert item. A customer who has a coupon can opt to switch on a camera that will read it.

At Panera, orders roll in from kiosks in the front of the store where customers peruse a broader menu than can be displayed on boards above cash registers. Customers can add or subtract ingredients, save their preferences for the next visit, swipe credit cards and move on to pick up their meals. Says an industry exec, “Remembering how a customer likes his favorite meal helps create stickiness among guests — and that’s what this is all about, increasing retention, frequency and average check size.” Panera’s customers also can order directly from their tables, using their mobile phones, and have the meals delivered to the table. Panera has installed the new technology in about 20 company-owned restaurants so far, at a cost of about $125,000 each. Profits are up in all of them, and orders have increased. At Applebee’s,  orders placed using the chain’s new online systems were $5 higher than regular orders.

Classroom discussion questions:

1. Why is technology an important operations issue for restaurants?

2. What are the advantages of tablet computers at Chili’s and Applebee’s tables?

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