New Technology Puts Financial Improvements on the Menu for Restaurants

Even as Main Street businesses outperform the rest of the economy, there’s a whole different set of rules for restaurants.

For example, PYMNTS Intelligence found that over the last 12 months, Main Street businesses have operated with the lowest risk of closing since early 2020. A report from Fiserv went into more detail. The Fiserv Small Business Index showed that small business sales for April grew 5.6% year over year and 2.2% month over month.

But restaurants were an exception. The Fiserv report found that small businesses that capture discretionary spending, including restaurants, did not perform as well in April as in recent months. The sector saw sales growth slow as consumer demand for lower-priced food options increased. Restaurant spending shrank 3.1% compared to March and was off 0.2% from April 2023. The reduction in restaurant foot traffic was much less significant, indicating that consumers are still visiting restaurants but ordering less expensive items or choosing lower-cost establishments.

The situation is top of mind at Fiserv, which counts the Clover restaurant point-of-sale, data and financing suite of products among its brands. Mark Hennin, head of Clover Growth at Fiserv, told PYMNTS in an interview that pressures are especially acute for restaurants these days. The margins are slim, and most operators only earn about a nickel to 10 cents on every dollar’s worth of food and drink they sell.

According to Hennin, those margins — and indeed, the survival rates of the restaurants themselves — can get a boost if technology is deployed in the service of reducing food waste and improving the efficiency of the order-to-table-to-payment flow itself.

There’s a significant pain point tied to getting orders wrong in the first place, Hennin said. The “old days” of taking orders manually at the table and giving them to the back-of-the-house kitchen workers are fraught with opportunities for missed communications and mistakes. Get the order wrong and it’s time for a do-over, which increases the customer’s wait time (and frustration), holds up the table turnover and has the staff preoccupied with redressing mistakes instead of moving swiftly through other diners’ meals.

Digital channels can help reduce those inefficiencies, bringing the online experience into the in-store eatery itself, Hennin said.

Addressing Pain Points

The conversation came in the wake of Fiserv’s debut last month of Clover Kiosk and its enhanced 24-inch Clover Kitchen Display System.

In terms of functionality, the two offerings, which can be integrated, allow kiosk users to browse menus, customize items, order and pay without having to wait in line. The Kitchen Display System sends both online and in-house orders to one screen, and connects with Clover POS, Clover Online Ordering, BentoBox and other online aggregators, for what the company said is streamlined communication between the front and back operations within the restaurant.

“Restaurants are looking for these all-in-one holistic solutions,” said Hennin, tied as they are to other Fiserv operating systems and software designed to bring restaurants fully into the modern age.

“On average, what we see is that a customer, through a self-service device, will spend between 10% to 30% more because of cross-sell and up-sell opportunities,” Hennin said. “Plus, think about the staff. It frees them up to provide more personalization to customers, and they can attend to all the transactions at a much faster rate. So, it really helps the restaurant really grow profitability and revenue.”

The demand for self-service kiosks has been strong in the wake of the pandemic, about four times the rate Fiserv originally expected. There’s comfort in seeing a digital display of the order once it has been selected, even customized, before the food is actually in the process of being prepared.

“Not only is the customer experience improved, there’s increased revenues, too,” especially for high-traffic restaurants, Hennin said. The kiosk also enables cross-selling opportunities — where a coffee shop might conceivably offer a Danish with the morning joe or entice consumers to consider joining a rewards program or use the points already on hand.

“These are one-to-one marketing offers,” Hennin said.

Loyalty programs, as offered by Fiserv, can be used to bring customers into the store, where they redeem the offer on a kiosk, the order is filled through the kiosk, and the payment is made with a Clover gift card or by tapping a phone on a Clover system at the table.

The data that flows across the Fiserv systems also can be used to power restaurant results even by helping the company provide capital to the restaurants themselves, as Hennin noted that “we have a lot of data that the banks don’t — just based on the cash flow of those merchants. So, we’re able to provide cash advances to merchants that may not be as well-served by their banks.”

As Hennin told PYMNTS, with emphasis on the two new products aimed at serving the self-service opportunity: “It’s all about efficiency, the customer experience and reducing costs.”