Table for two, with iPad?
How tablets and mobile apps are transforming the restaurant business
Astack of iPads greets hungry diners at the newest Test Kitchen in Burlington. Each customer is handed one to peruse a digital menu, just browse the web, maybe snap a photo of their dish once it arrives. Servers wait their tables on a tablet, too. Ninety iPads are kept handy here. At retail, that many devices costs close to $30,000.
And in tight corridors, that many devices can get crowded. During a bustling night at Test Kitchen’s other location in Burlington, electronic meal orders bound for the kitchen were often delayed as they jockeyed for position with other data sharing the same Wi-Fi network. A dreaded backlog would quickly form, like planes waiting on a crowded tarmac, and it was never clear whether Instagram posts or a big table’s dessert orders would be stuck at the bank of the line.
Co-owner Alex Mickalow, who has opened 17 restaurants in his day, 14 for Cara Operations Ltd., never expected a wiring issue to have such profound implications. When he purchased 60 iPads to open the other Test Kitchen, he was searching for a way for him and chef Steve Rydtschenko try new dishes without any commitment that a print menu brings. Plus, costs to print and bind paper menus are “killer,” he says.
He found his answer at Mapleview Centre — at the Apple Store.
More restaurant owners are starting to swap old, clunky and often costly IT systems — and the waiter’s pencil and notepad — for iPads and mobile apps to save money in the long run and differentiate themselves in the short. But, if these shiny gadgets don’t have a smooth runway to connect them all together, the pursuit of simplicity through digitization and automation can turn out to be rife with complexity.
Mickalow confesses he’s no tech whiz. So, for the second Test Kitchen, which opened in mid-August, he hired MacMedics, a Toronto consultancy, to steer data traffic on separate and predictable routes, reduce the frequency of congestion, and prioritize money-making meal orders on the network above all else. So far, it has worked.
“You might have good coverage to download a video, but if you can’t send an order to the kitchen, it’s all for nothing,” says MacMedics’ Jeffrey Barrett. “Granted, many restaurants fail and don’t want to spend money on something they can’t really sell. But if you don’t have a good network, it really goes to crap very quickly.”
Indeed, research shows one in four restaurants close or change ownership within the first year of business, a figure that grows to three in five after three years. Costs of appliances are hefty, sales trickle in and profit margins are razor thin. Some of these newer offerings structure pricing in monthly fees rather than hefty upfront costs, making it more affordable for cash-strapped small businesses.
“It comes down to using data to shave pennies from a task without affecting the guest experience,” says Jarrod Della-Chiesa, a technology advisor for Newport Beach, Calif.-based Synergy Restaurant Consultants. “When you put these really cool tools in place, sometimes the backbone infrastructure is kind of forgotten about. Your systems need to grow with you. You shouldn’t be outgrowing your systems.”
Mickalow installed Cisco Systems Inc. equipment to manage hardware, monitor usage and enforce policies.
It can detect people outside carrying smartphones, identify how frequently a device has been close by, how long it stays connected per visit. “It’s not creepy like we saw you walked by at 2 a.m.,” he says. “We haven’t done any analytics. I’m excited to use it at some point” for a loyalty program.
Whether he follows through and gathers meaningful insights is another story.
David Hopkins, president of Toronto hospitality consultancy The Fifteen Group Inc., estimates 90 per cent of his clients aren’t using the systems they have to their full potential. “There’s so many bells and whistles,” he says. “You have to spend time figuring out how they work” and many operators won’t learn new tricks.
In fact, at his last meeting with his Apple rep, Mickalow asked how he can optimize the iPad. He had already saved some time by automating the reservation process using the OpenTable Inc. online platform, which had seated more than 30 million diners in Canada as of last month. He was hesitant to give up control, but set up the software to stagger the spacing just how he likes it: every two hours, on the hour, for busy shifts.
“We don’t have to make sure we’re doing it right ’ cause the system is,” he says. Instead, managers can speak to guests or perform other crucial duties. “You’re always putting out fires,” explains DellaChiesa.
Bryan Huehn, who leads the OpenTable team in Canada, notes that 30 per cent of all bookings are made when a restaurant is closed and telephone lines aren’t staffed. During an interview, he illustrates how using OpenTable on an iPhone can be as easy as asking Siri to “book a reservation” to a nearby restaurant.
Mickalow was sent down this rabbit hole of access points, routers and networks in early 2013 after hearing about a point-of-sale system for iPads created by Toronto startup TouchBistro Inc. It can process orders at the table, generate reports for a variety of key metrics and update a menu instantly. The software, which is used by 3,500 venues around the world, promises to boost efficiency at both the front and back of a restaurant’s house.
A waiter at Test Kitchen said bringing an iPad equipped with the TouchB istro app to tables makes his job 30 per cent easier because he spends less time waiting for colleagues at a communal station and it’s easy to use. “Whenever I need information, I can find it,” he adds. “I can always know where I am.”
With a total of 170 iPads in its arsenal, Test Kitchen is the largest customer of TouchBistro, which charges $399 per month for an unlimited amount of licences, $249 for up to five, $129 for two and $69 for one. It gains 200 clients on average a month, from just 11 during slow periods a few years ago.
A P.E.I. takeout spot was shocked to find a fifth of its sales mix was a meal dubbed ‘the local.’ That told it how much to order from local farmers
“The customers we sign up quickly are always the independents because they can make a decision in three days,” Alex Barrotti, founder and chief executive of TouchBistro, says in an interview. “We’ve been courting some of the national chains and three years later, they still haven’t made a decision.”
During the past three years, TouchBistro has been ranked the highest grossing food and beverage app in 34 countries including Colombia, Latvia, Saudi Arabia, New Zealand and Taiwan, according to data compiled by App Store analytics firm App Annie. “A lot of these places, we’ve never even spoken to those countries,” says Barrotti. Since there’s no bulky hardware component, “they just downloaded it, tried it and bought it.”
While the pool of perspective clients for TouchBistro is deep, competition is fierce. Similar apps for tablets are aplenty. There’s Silverware, Revel Systems, Breadcrumb, Ambur, Lavu, Toast. Scapes, a takeout spot in Borden-Carleton, P.E.I., started with a generic system called ShopKeep before it switched to TouchBistro.
“I started off doing all my own bookkeeping, and (TouchBistro) really, really saved my life,” says Scapes owner and chef Sarah Bennetto O’Brien, who has one iPad at a register. “Any tech that can help me handle the front of the house better, I’m going to adopt it rather than finding another person to help me.”
Anthony Lacavera, who heads Globalive Capital and is an early investor in TouchBistro, calls the flurry of activity in the space, which blossomed after the advent of the iPad in 2010, as a double-edged sword. “The fact that there’s a lot of competitors suggests that there’s a great opportunity,” he says. “On the other hand (that) creates pressure on the product and on pricing, but Alex has a good team to really scale this business.”
TouchBistro has raised roughly $15 million to date from investors including Kensington Capital Partners, Relay Ventures, Difference Capital and U.K.-based online marketplace Just Eat PLC. Its flagship client is Michael Jordan’s Steakhouse at Grand Central Station in New York City. Each venue averages three iPads.
That’s how many iPads Sam Genkov, a 25-year industry veteran, has at Modus Ristorante, an upscale Italian restaurant in Toronto’s busy financial district. (He also uses OpenTable for online reservations.)
Genkov had been using a system made by Oracle’s Micros Systems Inc. He said the version he had was hard to program and tended to crash. He’d spend hours trying to add an item to his menu. He would have to call a help desk. “It was a mess,” he says. “(TouchBistro) is so easy. It gives you so much extra time and you have a great view of the business. As an owner, you want to know what’s going on all the time.”
With reliable inputs, these new systems can offer insights about any restaurant that were either not known or too difficult to compute before. O’Brien was shocked to find out a fifth of Scapes’ sales mix, for example, is potato fish cakes, maple-baked beans and mustard pickle, a meal dubbed “the local.” She took this vital information back to local farmers and was able to better predict how much she should order from them.
Consultants Hopkins and DellaChiesa say, in many cases, the way to lowering high labour or food costs for a client that wants to bolster its bottom line involves the installation of software and processes to bridge a widening information gap that’s seemingly inherent in the restaurant business.
“Restaurants that call us up and want us to help improve their profits, probably 95 per cent of them aren’t using scheduling technology that’s available,” says Hopkins. “There are a lot of readily available forms of technology that can be easily implemented and will make a difference.”