Using Wireless, Integrated Customer-Interfacing Technology to Boost Bottom Lines

iPhones and iPads. Tablets and tools. Digital technologies have gone well beyond the boundaries of kitchen or equipment operations — they're the basis for more convenient ordering, both online and in-store. Technology, when it comes to the field of customer-interfacing, has advanced. Let's face it: the touch screen is the new black.

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The same goes for every cash register or POS unit, according to Matt Mundok, principal of Innovative Hospitality Solutions, a foodservice business consulting and design firm based in Lewes, Del., specializing in the B&I, college/university and healthcare segments. Mundok also specializes in equipping his clients with PC-based POS systems that do much more than just ring up a customer. They also mine and analyze sales data to help operators make better menu, purchasing and pricing decisions, reduce waste, track specials and promotions, run tests and more, all through a wireless, satellite network.

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Just like banking online, PC-based POS systems have come a long way since the dinosaur days just five years ago when more traditional cash-register/POS units had to be hooked up and individually synced with a main computer in a back kitchen somewhere. Now, with PC-based systems, multiple units across multiple restaurants or operations can work together in tandem, wirelessly. Reports can also be generated using all system wide POS units at once, as opposed to only those within one restaurant or foodservice operation at a time.

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Newer, web-based systems cut out licensing fees, training, complex IT work and other hassles that come with something that should be as simple as ringing up a customer. The drawback? These systems are pricey upfront, some ranging in the tens of thousands of dollars. Still, while initial installment prices for these systems still run high, they've come as demand has increased over the last five years, says Mundok. And the return on investment makes them worth the initial cost, he says, as it doesn't take much to calculate those savings even after just a few months.

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Financial Analysis and Tracking

PC-based POS systems have what old-school POS systems don't – they can mine data from across multiple locations, a particularly useful tool for restaurant chains and non-commercial operations like hospitals and universities that have many different dining services, retail outlets and other points of sale across campuses.

"By having the availability of the data you can realize the returns on investment you make in the technology," Mundok says. "The key data from PC-based POS systems on the analytic side is product movement. In an enterprise system such as this, there is one PLU code for say, a bottle of Coca-Cola, throughout the whole network. That gets rung up the same way at a restaurant in Phoenix as it does at another location in Los Angeles. Now, when all that data gets transmitted, in real time, management is able to look at that information and consolidate it or break it down, to the regional level, store level, even terminal level. The power to have that information becomes critical in making business decisions for foodservice."

Wireless technology working in this way also cuts down on the amount of time needed to deploy new systems and train staff to use it. PC-based POS systems also don't require the massive hardware that the older systems did, again a money and time saver, according to Mundok.

Menu and Pricing

What are the most popular beverages? Which menu items sell the most? Not only do wireless customer-interfacing systems determine the most popular items, they can also analyze the amount of revenue generated from those items, Mundok says. Also, by interfacing with wholesale purchasing records, these systems can also analyze profits made by certain menu items.

"It's easy to see which items aren't selling, and where to pull the plug if something isn't working," he says. "Maybe you need to get rid of the bottom 20 sellers on the menu and introduce more profitable menu items."

It becomes easier to structure menu prices based on the differences between wholesale price and targeted profit goals. And, Mundok says, "From a customer feedback side, when a restaurateur or foodservice manager introduces a new menu item it's easy to see in a few weeks if that item is selling well or not. Basically, you can determine the success of a promotion or special."

Beyond that, the operator can determine the profits generated from such a promotion in order to decide whether or not to run it again, or make it a permanent part of the menu.

Inventory Control and Waste

Inventory tracking and waste control is another benefit of using PC-based systems, Mundok says. "What so many companies have done now is they're able to interface what is being sold to what is being purchased in inventory," he says. "When I interface those two systems, I can see from the integrated system and corresponding RFID tags or UPC codes that I purchased 10,000 bottles of Coca-Cola, for example, and my inventory says I have 2,000 bottles on the shelf, but the POS says I've sold 7,000 bottles of Coca-Cola. Where are the other 1,000? It evolved into a check and balance system that helps operators become much more aware of the flow of products from purchasing to receiving, to what's on shelf and what's been sold."

Retail has worked on a similar system for years, and only recently has the foodservice world jumped on board. Perhaps that's because many foodservice products aren't packaged, UPC-coded products but sandwiches or salads, something freshly made.

Labor and Equipment Planning

PC-based POS systems also allow for the tracking of freshly prepared menu items. "In the old days let's say you have a deli that offers a $5.95 sandwich, a $3.25 sandwich and a $4.50 sandwich," Mundok says. "An operator used to have to rely on manual food production records for tracking of individual menu items. Now, you can track the sale of products individually, even if it's a freshly built sandwich. You may not have an inventory interface down to the ingredient level, but you know what's selling and what ingredients are used for each menu item. The result is knowing how much inventory you need to match that production amount. If I know I sell about 414 sandwiches a day that use ciabatta rolls, I know I need at least 414 ciabatta rolls every day."

By analyzing menu items at this level, operators can prevent over purchasing and food waste in addition to feeling more confident that they have the right amount of ingredients to match production targets, according to Mundok. At the same time, these POS systems can track not just how many sandwiches were sold, but when they were sold. This information can be mined to help operators plan out when they sell their most sandwiches, indicating peak customer traffic periods.

Better knowing peak traffic periods allows operators to better staff their operations, says Mundok. With this information, an operator may choose to switch to a staggered system, adding one or two staff members each hour after opening time to stock up for the peak lunch rush.

In addition, these integrated POS systems can help operators make better equipment purchasing and planning decisions, Mundok says. For example, let's say an operator notices many of the fried items on the menu are not selling. That's the time to ask if you really need all three fryers. Maybe the operation sells a high number of salads. That's the time to ask if there is enough prep space and refrigeration. For a high rate of sandwich sales, that could mean having enough refrigerated prep tables and better organizing those work stations to meet product flow demands and prevent labor bottlenecks in the kitchen.

Purchasing and Buying Power

Understanding how much an operator is purchasing in bulk compared to how much it sells is an important way to leverage buying power with suppliers and vendors, Mundok says.

"An operator can go back to the company like Coca-Cola to use the same example and say, 'Guess what, we are selling 10,000 bottles per day in our restaurants. We need to get better pricing or rebates or more support, whatever the case may be," Mundok says.

Better yet, with official, detailed reports that operator has the numbers on paper to prove it. When it comes to equipment purchasing and consulting services, using such systems can also make things easier on dealers and business management consultants because they don't have to guess, they can clearly pinpoint daily, weekly or monthly product and menu item sales, average transactions, purchasing trends and other important information to help streamline operations even further.

Increased Overall Sales

Many operators who have deployed a PC-based POS system have also linked that system with credit-processing. "You'd be surprised how many customers still pay with cash, even though they have the option of paying with a credit or debit card," Mundok says. In fact, some of his reports have showed up to 50 percent of people in a cafeteria-style line use cash to pay for their meals in many non-commercial operations, and particularly in the B&I segment.

"By at least offering a credit payment system, we've seen the average check for those transactions rise between 15 percent and 25 percent in comparison studies," Mundok says. At the same time, credit card processing fees have skyrocketed in some cases, so much so that the National Restaurant Association has lobbied Congress to introduce legislation that would put a cap on such fees.

"If you have upward of 3 percent to 5 percent credit card processing fees, and you have consumers using cashless payment that are spending 15 percent to 20 percent more, you're still ending up at an advantage," says Mundok.

Just like the smart kitchens of today that can monitor equipment functioning and maintenance needs, integrated, wireless POS systems can help monitor purchasing, sales, and profit margins at both the front and back of the house. Stand-alone units with no data support? A thing of the past. Integrated, wireless systems that can provide detailed reports and improve operations in the kitchen and purchasing outside the kitchen? A thing of today.
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