Tablets as the New Ordering Servers In The Near Future

Chili's And Applebee's To Install Tablets At Every Table: The Ordering of the Future

Ordering of the future: dessert by tablet. (Credit: Ziosk)

Get ready to order dessert at Chili’s on a tablet–just look out for your sticky fingers. Brinker, which owns and operates the Chili’s and Maggiano’s brands, will be installing tablets on each table in its 823 operated Chili’s restaurants by March 2014, though the company says its servers will play a critical role in its new wireless experience.

Those tablets, provided by Texas firm Ziosk, will allow customers to order drink refills and desserts as well as play interactive games in what is an overall “reimaging” of Chili’s restaurants’ design, says Krista Gibson, senior vice president of brand strategy at Brinker International.
What you can’t do, at least initially, is order appetizers and your main course. For that, you still need a server and a host or hostess to seat you at your table. “The way we are positioning this with servers is we have a team-service approach where each server is assigned to each section, and we are thinking of this as a third server,” Gibson says. “In no way are we looking at this as a replacement for servers.”

According to Ziosk chief executive Austen Mulinder, the tablet’s business model isn’t aimed at cutting labor costs. The Microsoft MSFT +0.33% veteran instead has helped build a tool that uses a freemium model for revenue based, surprisingly, on gaming.
Restaurants make more money when customers can order dessert and coffee and then get out of there faster, and the Ziosk allows customers to pay by credit card on the tablet. A green LED light then notifies the serving staff that a group has paid and can leave without fuss. In tests, Chili’s found that half of customers opted to pay through the device and even more during busy workweek lunch hours.

But the device is supposed to really make money when groups, especially families, pay $0.99 to play games like trivia on the device while they sit. The system pays for itself, Mulinder says, if enough guests, at least a tenth of customers, opt into such “premium” content.
Servers can see more tips as the system increases the spending on their shift, Gibson says. In six months of testing, Chili’s locations saw an increase in per-person spend per check, translating to higher revenue for both the restaurant and the wait staff. The company is also more likely to get guests to fill out surveys and thus sign up for future email marketing from Brinker.
What’s to keep people from breaking the tablets, or simply walking off with them? As you can see in the image above, Ziosk designed its tablets to only work within a restaurant’s walls and without utility for thieves who wiped the device clean. The five-year-old company’s only lost two devices across over 100 million transactions to date. Mulinder says the device is also designed to be spill proof and safe to accidentally knock onto the ground should things get rowdy at happy hour.
As for the potential moneymakers, the games, Ziosk connected to Android’s app stores and then curates game selections to have kid-friendly and group options, with nothing rated above an “E for everyone” rating.

The systems are only being installed in Brinker-operated Chili’s locations. Brinker approves technologies like Ziosk that can then be offered in separate deals to franchisees.
There are other payment systems out there like EMN8 , which works with fast-serve restaurants like Burger King, Carls Jr. and Taco Bell to enable mobile and kiosk-based systems. Ziosk bills itself as different because of its focus on engagement and revenue sharing model for its premium content.
The elephant in the room remains labor costs. Like many restaurant operators, labor accounts for the single biggest bump in corporate expenses, $890 million off fiscal 2013 revenues of about $2.8 billion, the bulk of that from Chili’s.

Even if Ziosk won’t admit it, the company’s system would work for all courses, not just desserts. Other Ziosk partners already use it for appetizer and drink ordering. Should a major partner demand to use it for main courses as well, allowing it to trim wait staff on the floor, it might not make sense for Ziosk to say no. And a system that allows servers to simply look for payment and bring orders as they flow into the main point-of-sale system, if run well, means that companies like Brinker would be deliberating increasing their cost to maintain a close server relationship with clientele (something Gibson says is a priority for Chili’s).

Ziosk and Brinker wouldn’t disclose details of the deal beyond the revenue sharing model, but Gibson calls the installation “a huge initiative for us in this fiscal year.” Mulinder says this is by far Ziosk’s biggest partnership to date but that the system works for small chains as well. Bars would be a natural extension for the system, if a bit messier.