Some Radical IT Ideas From An Exasperated IT Exec

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky’s and Moe’s Southwestern Grill).

The payment industry is ripe for a new disruptive technology to come along and tip the banking world on its head. For too long, the banks have been living off a protected revenue stream from interchange that pays for a bloated and archaic system.

I have said it before, but why is it that Google can offer a 2-hour high-definition movie streamed to your PC for free but the average credit card transaction ($100) carries an interchange fee of almost $3? That is ridiculous. The problem is that most innovation is happening at the consumer and retail end of the transaction.

Sure, it will be cool to pay for my burger with my cell phone or "bump" my buddy $20 across our iPhones. But cool only gets you so far. With the acquirers, associations, cell phone providers and wireless network providers all arguing over how they are going to slice up the "interchange pie," it may never happen. It seems like I have been hearing about NFC for 8 to 10 years. Not exactly Facebook-like adoption.

The end result is that innovation in restaurant technology is stuck in a bit of a rut. A wealth of great “little” ideas is out there, but nothing is really game changing. Why is that? My restaurants are equipped with the same technology I would have implemented 7 years ago. Sure, there might be advancements in functionality. But nothing even close to revolutionary has made its way to the scene in a long time.

And I’m not talking about digital menu boards or kiosks. I’m talking about something so important that the entire industry adopts it within a few years time. They say that “necessity is the mother of invention,” and I would say that with fine-dining revenue down as much as 35 to 40 percent last year, we have some pretty good necessity.

Wired just published a great article on payment, entitled The Future of Money: It’s Flexible, Frictionless and (Almost) Free. Although most of the focus on alternative payments has been on online and mobile transactions, I would argue that the need is even greater in the brick-and-mortar space.

The folks over at PayPal did something pretty cool in November 2009 by relaunching the X. com. This new platform allows anyone to develop payment and checkout applications. In the first 2 months, more than 15,000 developers used the system to create new payment applications. Although the focus is largely on online and mobile applications, I could easily see it migrating to the B&M world, as well. For example:

  • Is there any reason that a restaurant couldn’t accept payment via PayPal?
  • What would happen if we turned NFC on its head? Rather than the phone making a payment to the POS, it makes a payment to the restaurant's bank in the cloud?
  • What would happen if the restaurant deducted the cost of lunch from Facebook credits?
  • Or, what if the guest could earn a free lunch by promoting the brand on Twitter?Creating A Richer Interaction For The Guest

    We are still in the infancy of leveraging technology to enhance the guest experience. There is a lot of talk about digital menu boards. But that talk is mostly coming from the people who sell them not the people who use them. And it seems like just about everyone is trying to sell them these days. In my opinion, digital menu boards just don’t make a lot of sense for most restaurant concepts. Sure, the great pictures and moving animation might catch diners’ eyes and convince them to order something else. But the impact will be short-lived--and not long enough to justify the costs.

    To me, installing a digital menu board is like painting your restaurant. Sure, it will catch people’s eyes and cause more people to stop in. But eventually people will get used to that new paint, and the effect will wear off. I have no doubt that as technology costs drop and content management systems improve, digital menu boards will become commonplace in most quick-service restaurants. It will become something that you “have to do” just to be in the business; it will no longer be a differentiator. For instance:

    • What if restaurants gave guests their menus on an iPad?
    • What if that menu was customized to each diner’s likes, dislikes and allergies, as provided by their phone communicating to the iPad or even from the restaurant’s CRM system?
    • What if guests could custom-order a dish based on the known ingredients in the restaurant at the time of their visit?
    • What if there was a digital photo frame in the booth that could show guests a Facebook photo album?

    I’m still not thinking big enough, you say? What about a restaurant booth that has a video-conferencing setup (similar to Cisco’s Telepresence) that allowed to people to have lunch together without being in the same restaurant? It may sound like stuff out of a science-fiction movie, but all of this technology exists today.

    Store Operations

    At the end of the day, the restaurant industry is, and always will be, about people. So what about using technology to enhance your customer service or even just the lives of your crew?

    One idea is using Bluetooth headsets to communicate in real time. Maybe it is a manager explaining to a crew member how something can be done better. Or maybe it is an automated message from the CRM system giving a server a little bit of insight into the customer.

    What do you think? Love it or hate it, I’d love to gain some additional perspectives. Leave a comment, or E-mail me at [email protected].