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POS is Dead, but Don’t Mourn its Passing

Jun 30, 2022

By Christopher Sebes

POS as we know it is dead! That seems like a ludicrous statement coming from a guy who’s been moderately successful in creating, growing, and selling several POS companies. But stay with me . . .  I’ll explain.

I first made this statement when I delivered a presentation at a conference in 2017. In hindsight, I may have been a bit too presumptuous back then. I was a restaurant operator for a couple of decades before trying my hand at technology. So I feel I have earned the right to say this – restaurateurs are luddites.

COVID changed that, and did so quickly. Dining rooms closed, and customers began looking for ways to continue to enjoy the food they love, yet doing so in ways that didn’t require them to eat inside the restaurant.

Almost overnight operators adopted technology to facilitate this. To wit:

  • Curbside ordering and pick up using QR codes
  • Online and mobile ordering
  • Integration with delivery marketplaces like DoorDash, UberEATS, Grubhub and others.

As restaurants slowly began reopening, it was clear that customers expected a contactless experience. Some restaurants merely used a QR code to allow customers to view a pdf of their menus; others more fully embraced the technology, allowing the QR code to launch an ordering and payment experience.  Tech companies like GoTab, OneDine and BBot that leveraged this technology saw significant adoption — and in the case of GoTab released in-store ordering and KDS to complement their offering.

It is clear to me that the experience has changed permanently, and despite many of my friends and colleagues wishing for the status quo ante, it’s never coming back. The days of the POS occupying the gatekeeper role at the hub of the restaurant — allowing spoke applications to connect only when they are pushed to do so  or when those third parties pay a toll — are in the past.

What does the future look like?

It’s all about creating a seamless, connected commerce experience. In 2021 digital sales accounted for 48.5% of Chipotle’s total sales, up from 19.6% in 2019. While others, especially those in full-service, may not yet have seen as big a change in the way their customers want to interact, in my opinion, it is just a matter of time.

Ultimately, the majority of orders — whether placed within the restaurant’s four walls or outside of them — will use a device other than a traditional POS terminal on the counter or in the drive-thru.

Taco Bell, Chipotle and others have recognized this and begun building and retrofitting restaurants to accommodate customers who have ordered ahead. Forward-looking operators without the space to do that, or those without any drive-thru continue to adopt technology to facilitate curbside delivery. Customers at full-service restaurants are embracing and even demanding the ability to have some control over their in-restaurant experience.

Those interactions mat be as simple as paying and/or splitting their check using a mobile device, but are likely to include the ability to order as well. Perhaps they may order their own appetizers while waiting for that first round or add a second round to their order. A well-designed user experience will certainly help grow check averages.

Does such technology mean the end of the server? Absolutely not. Have you ever stood at a crowded bar trying to get the bartender’s attention to pay your tab? If so, I suspect you’d embrace the ability to start, add to, and pay for your check on your device.

We may have fewer wait staff in our restaurants, but our servers and bartenders will have more time to talk about the great dishes on the menu, guide beverage choices, and so on.

Most Points of Sale systems either offer or integrate with a mobile ordering solution and third-party marketplace orders — and consume those orders and also send them to the kitchen system. Restaurants will continue to need POS stations, albeit fewer in number. After all, there are customers of my advanced years and even younger who still want to interact with people rather than devices. Or the restaurant may use scales that need to connect to a terminal

Perhaps employees whether in QSR, fast casual, or full-service will also predominantly use mobile devices, too. Just look at Dutch Bros, In-N-Out and Chick-fil-A — all which have been embracing mobile device technology in their drive thru lines for years.

What does the seamless commerce experience look like?

In short, seamless:
  • Puts the customer, not the POS at the center of the transaction, by making  a frictionless experience to order and pay from an in-store employee, kiosk, mobile device, the restaurant’s own app or mobile web channel, third-party marketplace, voice-assistant, et cetera
  • Allows for management of menu items, prices, taxes, discounts, routing, and user experiences across all channels from a single place
  • Connects as seamlessly with its own solutions as it does with other systems you use without charging an egregious amount to do so.
  • Elevates the Kitchen Display System so it can manage orders from every channel, adding intelligence to throttle orders when in-store demand will negatively impact customers’ experience.
  • Embraces customer engagement. Not just loyalty, but also Customer Data Platforms that can enrich information about all customers.
  • Offers a transparent pricing model for all services, including acceptance and processing electronic payments.

Of course, these are just my opinions. But my vision is informed by my 50-year journey operating restaurants that used paper checks, early systems like Remanco and the NCR 2160 — after which I created three successful ResTech companies.

RTS Partner Christopher Sebes is a former restaurant operator and technology entrepreneur with 30-plus years of experience in hotel management, restaurant technology, restaurant operations, and mergers-and-acquisitions. This article appeared recently on his website (christophersebes.com).
Reach him at christopher@christophersebes.com

 

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