Washington Restaurant Magazine August 2013

WA S H I N GTO N

MEGA

July 2013

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TRENDS Restaurant 2.0

REBOOTING YOUR OPERATION FOR THE FUTURE

Inside: Are you misclassifying independent contractors?

The most important sell: your staff Giving bullies the boot

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Sysco Portland, Inc. Sysco Portland, Inc. Dr. 26250 SW Parkway Center 26250 SW Parkway Center Dr. Wilsonville, OR 97070 Wilsonville, OR 97070 503.682.8700 • www.syscoportland.com 503.682.8700 • www.syscoportland.com

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Inside 10

www.warestaurant.org

Features 10

Rethinking turnover Does cycling employees in and out always have to be a negative turn of events? Here’s another way of thinking about turnover.

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Restaurant 2.0 is here Understanding the importance of new technologies in the restaurant industry

Other stories 16

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Lex on Tech

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News Briefs

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Knowledge is power. Information is liberating. Education is the premise of progress – Kofi Annan

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Building business in a challenging workplace

14

Watching slow-moving clouds: How to migrate (carefully) to Cloud POS

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Building Business in a Challenging Marketplace

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Confused about technology? Ask a millennial

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Calendar/New Members

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Marketplace

30

Choose the Right POS System for You

On the cover This month, we show you how to embrace the technologies of today, while looking forward to what lies ahead.

August 2013 | 5

EDITORIAL STAFF Anthony Anton, Publisher Lex Nepomuceno, Executive Editor Heather Donahoe, Managing Editor David Faro, Contributing Editor Sheryl Jackson, Research Editor Lisa Ellefson, Art Director WRA EXECUTIVE COMMITTEE Jim Rowe, Chair Consolidated Restaurants Phil Costello, Vice Chair Stop N Go Family Drive Inn Robert Bonina, Secretary/Treasurer Washington Athletic Club Bret Stewart, Immediate Past Chair Center Twist Nancy Swanger, WRAEF President WSU WRA EXECUTIVE TEAM Anthony Anton President and CEO Teran Petrina Vice President Bruce Beckett Director of Government Affairs Lex Nepomuceno Director of Communications & Technology Lyle Hildahl Director of Education Victoria Olson Director of Business Development Susan Howe Director of Internal Operations 510 Plum St. SE, Ste. 200 Olympia, WA 98501-1587 T 360.956.7279 | F 360.357.9232 www.warestaurant.org

Letters are welcomed, but must be signed to be considered for publication. Please include contact information for verification.

Reproduction of articles appearing in Washington Restaurant Magazine are authorized for personal use only, with credit given to Washington Restaurant Magazine and/or the Washington Restaurant Association.

Articles written by outside authors do not necessarily reflect the views or positions of the Washington Restaurant Association, its Board of Directors, staff or members.

Products and services advertised in Washington Restaurant Magazine are not necessarily endorsed by the WRA, and do not necessarily reflect the opinions of the WRA, its Board of Directors, staff or members.

ADVERTISING INQUIRIES MAY BE DIRECTED TO: Ken Wells Allied Relations Manager 425.457.1458 kenw@warestaurant.org Washington Restaurant Magazine is published monthly for Association members. We welcome your comments and suggestions. email: news@warestaurant.org, phone: 800.225.7166. Circulation: 6,310.

6 | |www.warestaurant.org warestaurant.org

Lex on Tech Top three technologies launching this summer

By Lex Nepomuceno, Executive Editor With summer comes more sun, but it also ushers in a wave of new technologies every year. Companies like Apple and Google typically launch new and updated devices prior to the beginning of the school year. Summer also serves as an opening salvo to holiday product launches and fall clearance sales. Thus, next generation devices or company entries into new product categories are at least announced during summer.

Fortunately, this summer is off to a really good start. The three main product categories that will be affected are 1) gesture control, 2) digital television and 3) tablet hybrids.

Remember the movie “Minority Report” with Tom Cruise and the way he manipulated computer screens with his hands in mid-air? Well, science fiction meets the real world through the launch of the Leap Motion 3D gesture controller (leapmotion. com). As a point of reference, Leap works like Microsoft Kinect, only it is 200 times more accurate, detects 3D motion that includes all ten fingers, and it is only $80 at launch. HP has already partnered with Leap to create next generation laptops that will eventually integrate the technology as an alternative input method. Leap Motion launched in July and is sold through their website, as well as Best Buy stores Courtesy of 20th Century Fox across the US. On the digital television front, Google made a game-changing announcement this summer with its Chromecast digital television adapter. Essentially, Chromecast does what the Roku and Apple TV do, but it is compatible with all major platforms and is only $35 (Compared to $99 for the latest Roku or Apple TV). The form factor of the device is also innovative in that it is about the size of a USB thumb drive and connects directly into any TV’s HDMI port. This allows the Chromecast to be the most portable, simple digital television device on the market. The device is currently available through Best Buy, Amazon.com and Google Play store.

Finally, shrewd gadgeteers should never count out Microsoft. Even though adoption of Windows 8 has been significantly slower than expected, manufacturers continue to develop and launch better tablet/laptop hybrids. The two most promising products in this category are the Lenovo Twist and the HP Envy X2. Both products have been highly rated in the tech media and consumers alike. What detractors of Microsoft don’t understand is that Windows 8 is here and it is here to stay – until the next major version of Windows anyway. Where is a good place to browse and compare these and other Windows 8 tablet/laptop hybrids? Definitely start with Amazon.com and start comparing reviews and hardware specifications. It may also be worthwhile to explore a local Microsoft Store (http://www.microsoftstore.com/), so the ergonomics and portability of each device can be properly tested.

For comments, suggestions and ideas please email me at lexn@warestaurant.org. 

Primary Source of Information | News Briefs Employer penalties and reporting delayed under health care law Last month, a reprieve emerged for employers who have been struggling to understand out how to implement the 2010 health care law. The Treasury Department announced that it has delayed by a year the law’s mandate that requires “large employers” to report to the IRS whether they offered their fulltime employees and their dependents health care coverage in 2014.

The reporting requirement was originally due to take effect Jan. 31, 2015, and requires large employers — defined as those with 50 or more full-time-equivalent employees — to provide the IRS with details on whether they offered health care coverage to full-time employees and their dependents in 2014.

Instead, the IRS will use 2014 as a year of transition and voluntary reporting, and has pushed mandatory reporting for large employers and insurers to Jan. 31, 2016, to track data on health care coverage employers offered in 2015. For the full article, go to http://wra.cc/aug2013a.  IRS explains 2014 transition rules for employers under health care law The Internal Revenue Service has released additional guidance for employers on the Obama Administration’s July 2 decision to make 2014 a year of transition and voluntary compliance for businesses on the health care law’s employer mandate and reporting requirements.

The 2010 health care law requires “applicable large employers” — defined as those with 50 or more full-time-equivalent employees — to either offer coverage to full-time employees and their dependents or face penalties. The law requires employers to submit annual information returns to IRS each January based on coverage offered during the previous calendar year.

IRS Notice 2013-45, issued July 9, moves the deadline for the first annual information reports to Jan. 31, 2016, rather than Jan. 31, 2015. Applicable large employers will need to track information on each full-time employee and their dependents starting Jan. 1, 2015. For more information, go to http://wra.cc/ aug2013b.  Old scams make new appearance around Washington eateries Dry cleaning, cigarettes and a phone system for the hearing impaired. What do these three things have in common? They’re often used to trick busy restaurant operators out of significant money and labor. Over the past week, the WRA has received tips from several members, regarding two longstanding restaurant scams that appear to be making the rounds again in Washington state—the dry cleaning scam and the TTI operator scam. The WRA urges all members to read up on these ploys and be vigilant against similar requests. For the full article, go to http://wra.cc/aug2013c. 

WRA launches new membership video at national event The Council of State Restaurant Associations held its annual communications and membership summit in Seattle last month.

Industry leaders from all over the United States gathered to share ideas and best practices. During the communications and technology panel, WRA unveiled the first of its ongoing video series entitled “Why Join WRA?” It reminds new and existing members about the many exclusive benefits of being part of WRA; it also provides an entertaining overview for prospective members.

To check out this video, go to http:// warestaurant.org/membership/ restaurant/

Legislature budgets $1 million for state tourism One million dollars in short-term bridge funds will be allocated to the Washington Tourism Alliance (WTA) to continue its work to maintain and grow Washington State tourism.

The budget allocation underwrites the basics of a targeted marketing program in 2014 and 2015. Funds are specifically allocated for the state’s destination website for travelers; postage for mailing the Washington State Visitors’ Guide; operation of a tourism call center; tourism research; and international marketing. The Department of Commerce is directed to contract with WTA to provide these services to expand and promote the tourism industry for the state.

Terms of the contract will include a one-for-one matching requirement in either cash or in-kind services.

For more information, go to http:// watourismalliance.com/.  August 2013 | 7

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Industry Outlook | WRA President & CEO Knowledge is power. Information is liberating.

Education is the premise of progress – Kofi Annan Anthony Anton, president and CEO

At a recent conference, I heard Seth Priebatsch lay out a vision for a new world of tomorrow. He imagines a world with an interchange fee near zero, and where credit card companies and processors will make more money than they do today by selling you information about your business that could prove essential to your management, growth and success.

Never heard of Seth Priebatsch? Neither had I. He is a 24-yearold uber cyber-genius-Princeton -dropout CEO of LevelUp and Scvngr. He intends to combine the latest in high-tech, theories in gaming, the potential value of information and the glaring inefficiencies in the banking system to provide the world’s next tech revolution. Major investment firms such as Google Ventures, Balderton Capital, Continental Investors, Highland Capital, Transmedia Capital and T-Venture have thought enough of him and his concepts to stake him $100 million to get the ideas going.

I’m a restaurant guy, and I’m not a tech genius; but do I love the idea of a nearly zero interchange world in exchange for credit card companies giving us access to our own information to eliminate the wasteful inefficiencies in our small margin world?

HELL, YES. But is Seth’s vision, ability and skill the one that gets us there? I have no idea.

I think the bigger takeaway from Seth’s presentation is the globally expanding trend of available data that is being unlocked every day—how incredibly valuable that information could be to small operators to make the right decision. This information is so valuable that Seth estimates it has the potential to exceed all current banking value, and on that, I do agree.

Just this month, I discouraged a small suburban restaurant operator from placing a several thousand-dollar advertisement in one of the large urban newspapers. This restaurant isn’t on a beaten path and is probably, at best, a 50-minute drive from more than 80 percent of the paper’s readership. Plus, the business’ brand was not a destination, nor was it celebrity restaurant. To get an ROI on that ad, this operator would have needed to double the following month’s sales.

Desperate, the operator asked, “Well, what am I supposed to do? I need more customers to survive.” We engaged in a series of questions: What is her customer radius? (no idea) What is her customer demographic, aka target audience? (no idea) What is her competition radius? (no idea)… and on and on.

While industry and marketing veterans know there are paths to this data, the path is often laborious and difficult for small

business people who are also the cooks, janitors, accountants, HR directors and marketing managers for their business.

And yet, that information is easily available just on the other side of the credit card data line, waiting to be unlocked and literally save hundreds of operators each year. Before the end of the decade, much of it will be.

Are you prepared to add the new hat of data manager to your current repertoire of head gear? And if not, how will your business manage the white noise of information that is currently coming in at the pace of a faucet and is about to rush in like Niagara?

Now is a good time to practice and begin to test approaches about how your business can collect, analyze and effectively use data to make great decisions. Set aside 30 minutes a month to review your data. Lock your door and put on headphones, so the data gets your full attention.

First, choose a set of metrics you want to review each month, if not more often. The basics are a great place to start. Sales, customer counts (there is a difference), food cost, labor cost and all other costs. If you don’t know how to calculate these, you can get a free restaurant accounting guide by contacting your WRA-area coordinator, or you can contact our Consulting Network. Also working with your POS rep is a great place to start.

Identify your targets and then make a commitment to improve at least one of the metrics for three months.

It almost seems too obvious to quote Bill Gates here, but he offers some great perspective in the context of emerging technologies and how they help us run more efficient operations.

“Information technology and business are becoming inextricably interwoven,” he has said. “I don’t think anybody can talk meaningfully about one without the talking about the other.”

And in order to help you make the most of available technologies, the WRA also has tons of information available at your request: quarterly industry sales by city and county, industry profiles by county, city or ZIP, as well as the latest trends.

The next phase of the information revolution is starting. This one will likely be more impactful to you than the internet or social media. Will you be ready?  August 2013 | 9

Is employee turnover always such a bad thing?

By Jack Goldberg

Perhaps employee turnover is not as bad as we think.

Maybe, just maybe, some turnover is good.

I recently attended a seminar on employee morale. The basic premise was that employees who are “happy” are better workers; they are typically more productive and stay in their jobs for a longer period of time. It seems that the basic measure of success or failure had to do with employee turnover. The implication being that if employees are unhappy, they leave. If they are happy, they stay. As business leaders we are told that turnover is a measurement of failure and an indication that something needs to be fixed. But we know that many times this premise doesn’t hold up. Employees leave for a whole host of reasons – sometimes for reasons that have nothing to do with the employer and/or the employees’ “happiness”.

Truth be told - turnover can be an indication that something is wrong, and of course, it is expensive. Some say turnover costs between 10 and 20 times the employee’s weekly wage.

However let’s balance out the negatives with the potential benefits. It can be difficult losing people, particularly people in key positions. There are though, some good things that can happen when you bring in a new employee.

For example:

New ideas. The new person may be able to bring new

ideas, fresh thoughts, and a different way of looking at things.

Diverse viewpoints. Sometimes, over time, companies can become homogenous - same age groups, same interests, same habits, etc. A new person can “mix it up” a bit, even unintentionally bringing a new perspective to the group.

Increased productivity. This seems counterintuitive, but oftentimes once the new employee learns the job, he or she actually performs better than the employee who left. The prior employee may have become complacent or just continued to repeat poor work habits.

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Industry knowledge.

Turnover sometimes allows us to hire people from our competitors or related industries.

Oftentimes these new employees can be a great resource for industry knowledge and trends.

New customers.

Depending on the type of position, sometimes customers want to “follow” the employee to his or her new company.

New skills. A very common phrase from a new employee is “why do you do it this way?” Oftentimes the new employee brings new skills and experiences that help us do it better.

Competitive salary. Usually when we hire new people we have to re-examine and assess the salary level.

Sometimes (not always) we find that we can get the job done for less. Over time, salaries can creep up beyond the “market rate”.

Upgrades. Most businesses have “A” players and “B” players. Turnover gives us the opportunity to try and hire “A” players.

So, yes employee turnover can be disruptive and suggestive of problems. But, it can also create opportunities opportunities that can create real value for a company.

At PMSI, we have only “A” players and very little turnover.

But, it does happen; employees sometimes leave. We always wish them the best and then always strive to make the best out of a difficult situation.

Hiring the right person for the job can be difficult. If you need help, call us.  Personnel(ly) Speaking is a monthly comment on HR issues of importance. It is intended to provide general information and must not be construed as legal advice. Reproductions are allowed as long as credit for this information is given to PMSI. We welcome your comments, questions, and concerns. © PERSONNEL MANAGEMENT SYSTEMS, INC.

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Building business in a challenging workplace CONSUMERS CRAVE INFORMATION

Proportion of adults who have used the Internet for the following restaurant-related activities

60%

34%

Search for nutritional information about restaurant food

34%

Use a smartphone app to find a restaurant, place an order or make a reservation

33%

Make reservations

59%

Visit a restaurant’s website

View a restaurant’s menu

42%

57%

Place an order for carry-out or delivery

Find out information about a restaurant they haven’t been to before

RES

ERV

27% Post or read reviews about restaurants on a consumer-driven website such as Yelp

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23% View restaurant fan sites and pages on Facebook, Pinterest or YouTube

14% Purchase merchandise from a restaurant’s website

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5% Follow restaurants on Twitter

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The Washington Restaurant Association has launched a new, exciting way for members to reach potential customers! Join us on our radio show, DineNW, where we talk about Washington’s restaurant industry, and give listeners a taste of Northwest cuisine.

Listen from noon until 1:00 p.m. every Wednesday on KLAY Radio, 1180 A.M. www.klay1180.com www.facebook.com/dinenorthwest

August 2013 | 13

Watching slow-moving clouds: How to migrate (carefully) to Cloud POS

By Shannon Arnold

For a couple of weeks now, I’ve been following a LinkedIn thread titled “What is the most common mistake that you see being made by small to medium businesses as they migrate to the cloud?” in the Cloud Computing group. The participants are, in many cases, senior technologists at major companies.

To be clear, “the Cloud” computing is a synonym for computing over a network. This means that a central computer (server) has the ability to run a program on many connected computers at the same time. The popularity of the term can be attributed to its use in marketing to sell hosted services (like POS systems, data storage, and office suites) that run software at multiple remote locations on multiple computers, from a single virtual space (server) which is commonly called “the Cloud.”

Everyone in the discussion agrees that, fundamentally, moving to the Cloud is not a simple thing. In fact, it’s a big deal. It involves readjusting and transforming the way a company thinks about and implements its information technology (IT). It involves shifts in integration, in security and identity management, in process and procedures, in reporting and analysis. It’s all about “transformation” and “migration.” It’s pretty “in the weeds.” The more you dig into it, the more technical the discussion gets.

I agree. When it forms a fundamental part of IT and business operations (like Infrastructure as a Service—IaaS), the Cloud makes sense. But there’s a certain all-or-nothing flavor to it that doesn’t always completely work when it comes to restaurants. It’s not so cut-and-dry: to Cloud or not to Cloud.

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Which is a good thing, since when restaurant owners think “Cloud,” they’re not thinking about creating holistic programs, or forcing fundamental shifts, or adopting IaaS across the enterprise-wide computing paradigm . . . or anything like that at all. They’re thinking about revenue and bottom lines. They just want the best price/ performance tradeoff from their POS. A true Cloud POS—where there is no software installed on your computer or device—is fundamentally another Internet application, like the ones you use to order products, or register a car or any of the many things people do online. They’re great, but you know you have to tolerate performance issues. Sometimes they’re fast and sometimes they’re slow. Sometimes a page crashes (for one of a dozen reasons), and you have to reenter data. It just goes with the territory of an online application.

The question remains price/performance: can I tolerate that kind of experience in my business? Or better yet: where can I tolerate that in my business? The Cloud delivers value in some areas of restaurant operations, and not in others. Can I tolerate it at the bar? In the backoffice? At the drive thru window? On the floor?

It could be that those delays don’t impact your backoffice operations enough to be an issue—here price/ performance might point to the Cloud. But when customer service is in play, I think those kinds of unpredictable delays frustrate staff, slow down service and make customers unhappy.

Yes, good Cloud POS solutions today are addressing all the problems that can be addressed. Good data security, effective backup for your data and their servers, PCI compliance, and more. But the simple physics of online applications makes it so that the Cloud may not be the perfect solution for every type of business. There are pros and cons to both cloud POS applications and on-premise POS applications.  Shannon Arnold is the Director of Marketing at Maitre’D POS. If you need help weighing your options and outlining your business requirements, contact the WRA, and we will connect you with the expertise you need to make wise choices regarding Cloud POS systems.

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Restaurant 2.0 is here Understanding the importance of new technologies in the restaurant industry

By Heather Donahoe, managing editor

Over the years, we’ve been conditioned to glamourize the “The Future.” For those of us who are already technologically inclined, that future stretches into a vast landscape where anything seems possible. For others of us who may be a little less comfortable with the tech sector’s latest offerings, it may seem hard to imagine how we could become an even more automated culture.

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And while we’re all wired a little differently, thus adopting technology at varying levels, restaurant industry professionals can benefit significantly by pushing themselves into that wide-open landscape of possibility.

Perhaps it won’t be practical to integrate every single “greatest new advancement” into an operation as soon as it emerges from development; but what will be practical is a perpetual curiosity around technological advancements and their ability to enhance the restaurant industry.

Researchers at Wageningen University in Holland operate a camera-rigged, high-tech cafeteria, dubbed “The Restaurant of the Future.” It is perhaps the most extreme example of how far science has gone to understand consumer dining patterns, food choice, effective design and layout, the influence of lighting on buying and eating behavior, presentation, traffic flow, taste, packaging, preparation and dozens of other components within the dining experience.

This future-thinking eatery is open to the general public, provided all visitors register before eating. By doing so, the visitor consents to video observation, which is engineered to satisfy essentially any research requirement. On the backend of this experiment is the sensory consumer research lab, which businesses can use to assess their products. The innovation lab allows companies to test food innovations, while the sensory lab and mood rooms give scientists the opportunity to take a closer look at how environmental factors affect the way consumers dine.

Over time, the findings of this ongoing experiment are analyzed and distilled into the type of information that ultimately is funneled into food, equipment and technology development throughout the foodservice industry. Businesses can contract with the Restaurant of the Future for prototype testing and assistance with the implementation of new techniques of food preparation, presentation and meal serving systems.

While Wageningen University has certainly deployed a means of extracting practical data for foodservice industry use, some restaurant operators may be a little more interested in better understanding how they can fully embrace the existing technologies of today—those innovations that were once heralded as “the future of the restaurant industry.” It may sound trite, but the future actually is today. So, while it may be fun to eagerly anticipate the next big advancement, restaurant operators should be careful not to miss out on what has already emerged from the research labs, software studios and product innovators.

According to the 2020 Study from The National Restaurant Association, 25 “likely developments” are projected to materialize by the year 2020. Building on the momentum of the past five years, technology will become more integrated into restaurant operations, including systems that improve efficiency, online and mobile training options and customer-facing innovations that enhance the restaurant experience.

Here are a few from the 2020 list that pertain to technology: Restaurant operators will make better use of mobile technology Turning POS date into actionable knowledge for operators will become easier Online training programs will replace training manuals Electronic pay-at-table and mobile payments will be commonplace More training will be provided online and on smartphones Technology will be more effectively used to control costs and enhance management efficiency To-go containers will become more sophisticated Product traceability will improve Equipment used in restaurants will continue to become more energy efficient Customers in the driver’s seat Slowly but surely, American restaurants are adopting tablet-based POS systems—particularly in large cities such as Seattle. While roughly 50 percent of restaurant POS systems in Europe have made the switch, U.S. eateries have been a little slower to adopt this technology.

Shannon Arnold, director of marketing at Maitre’D by Posera, said that restaurant who have embraced tabletbased systems are able to establish more meaningful interactions with customers. By and large, full service restaurants—especially those with large floor plans or multi-level locations—are better suited to tablet POS systems than are quick service establishments.

“The value here is crystal clear,” Arnold said. “It frees up time, and it allows servers to focus more on establishing a connection with each customer.”

In a case study conducted by Posera, one restaurant was able to devote devoting at least 15% more staff time on the floor. Ultimately, servers delivered quality service to more tables—two more tables per hour—sometimes more.

August 2013 | 17

With each server able to handle more tables, payroll went down almost immediately. And it did not affect anyone’s income: in fact, servers achieved their weekly income goals earlier, so they needed fewer hours, according to the study.

Even better? The average customer order increased by $2.

For restaurant operators interested in venturing into the world of tablet-based POS systems, Arnold urges them to thoroughly explore the market. While it may be tempting to just buy up a bunch of the one tablet everybody is talking about (you know the one), Arnold suggests selecting a tablet that is a little more rugged and better equipped to stand up to the constant wear-and-tear that comes with the restaurant environment.

A good resource for restaurants looking to upgrade their customer-facing technologies is the National Restaurant Association’s upcoming Restaurant Innovation Summit, coming up October 23-24 in Denver. This event will give operators the chance to explore new tech options and determine which ones can best accommodate their needs.

Be sure to visit the NRA’s website for more information and to get registered.

Reassessing the restaurant website OK, OK. Mentioning websites in an article about the future of restaurants may seem horribly out of touch. After all, hasn’t the Internet been around for, oh, more than three decades? Nevertheless, plenty of businesses still haven’t managed to figure out how to secrets to a decent website.

While many restaurants have established a customercentered social media strategy, individual restaurant websites can still serve as a portal to the operation’s brand.

And it’s important to remember that these sites are still a restaurant’s entry point for a certain demographic of 18 | warestaurant.org

customers who may not necessarily check first on Facebook or Twitter.

Rory Martin, a Seattle-based web designer, emphasizes the importance of ease, interactivity and personality. First and foremost, Martin is very clear about the core purpose of a restaurant’s website. It is, he says, “to showcase your food and tell people how to get there.” The real key to showcasing a restaurant’s food? Enticing photography, of course! Don’t skimp on this one, Martin urges. Unless a restaurant operator has pro photo skills, hiring someone to capture images of menu items is a worthy investment.

At the end of the day, a restaurant’s website can be the beginning of a great customer relationship, or a lost opportunity. Don’t overlook its importance.

Looking forward to… the future, of course In the coming years, technologists and researchers will seek to improve every facet of restaurant operation, and in many areas, they will succeed brilliantly. In embracing these advancements, it will be critical that restaurants learn to strike the balance of being technologically aware while remaining sensitive to the needs of customers.

A word of caution in the NRA’s 2020 Study makes this assessment: “Although technologies will offer great benefits, successful operators will retain a personal touch element.”

The restaurant of the future has a lot to look forward to—improved efficiencies through automation, bolstered profits, a more exciting customer experience. The key to successful implementation will lie somewhere in knowing when to embrace a new idea and when to maintain the time-tested fundamentals of good restaurant operation. 

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August 2013 | 19

Building Business in a Challenging Marketplace National Restaurant Association Consumer Research

Repeat customers have always been important to the long-term success of restaurants. But in today’s competitive marketplace, it becomes even more important for restaurant operators to give every customer the complete experience that convinces him or her to return.

success — a solid proportion of operators reported gains in repeat business.

Although the job market began recovering in March 2010, cultivating customer loyalty remains a challenge.

In fact, in the Association’s Restaurant Trends Survey fielded in October 2012, a majority of restaurant operators across all segments said their customers’ loyalty is actually more difficult to maintain than it was two years ago.

Each of these groups relies heavily on the restaurant industry in their daily lives. As such, it is important for restaurant operators to know how to reach these customers, what their tastes and preferences are, and what motivates their restaurant decisions.

Repeat customers currently represent an average of 71 percent of sales at quickservice restaurants, 68 percent of sales at fast-casual restaurants, 64 percent of sales at casual-dining restaurants, 63 percent of sales at family-dining restaurants and 51 percent of sales for the finedining segment, according to the Association’s Restaurant Trends Survey.

60

The trend is certainly moving in the right direction, with operators across several segments reporting that repeat customers made up larger amount of their total sales in 2012 than they did in 2011. In the quickservice and fast-casual segment — where repeat customers are the most critical for 20 | warestaurant.org

The Association’s 2013 Forecast takes a detailed look at the attitudes, preferences and motivations of frequent restaurant customers to help restaurant operators attract this important demographic. Based on the Association’s 2012 National Household Survey, three categories of frequent restaurant customers were analyzed: Frequent fullservice customers. On average, these customers eat a meal at a sit-down restaurant with waiter or waitress service more than once a week.

Frequent quickservice customers. On average, these customers purchase a meal or snack from a quickservice restaurant or carry-out place more than once a week.

Frequent off-premises dinner customers. On average, these customers purchase their dinner meal from a restaurant, carry-out or delivery place and eat it at home more than once a week.

Restaurant Operators Report Boost in Repeat Business in 2012

Percent of operators reporting that repeat customers accounted for a larger/ smaller amount of sales in 2012 compared with 2011 57% 50%

50 40

42%

41%

37%

30 20 10 0

7%

Family Dining

8%

Casual Dining

10%

7%

5% Fine Dining

Quickservice

Fast Casual

 Larger Amount of Sales in 2012  Smaller Amount of Sales in 2012 Source: National Restaurant Association, Restaurant Trends Survey, 2012

Assessing Attitudes of Frequent Customers Frequent customers patronize restaurants primarily for sheer enjoyment. Ninety-nine percent of frequent fullservice customers said they enjoy going to restaurants, compared with 93 percent of the general public. Frequent quickservice customers (95 percent) and frequent off-premises dinner customers (96 percent) also are more likely than the general public to say they enjoy going to restaurants.

Painting a Picture of Frequent Restaurant Customers

Overall, frequent customers consider restaurants essential to their daily lives. In fact, 71 percent of frequent fullservice customers said restaurants are an essential part of their lifestyle; only 45 percent of the general public

Frequent Quickservice Customer

Frequent Off-Premises Dinner Customer

Gender

Male.................59% Female.............41%

Male.................54% Female..............46%

Male...................49% Female................51%

Age

18 to 34...........41% 35 to 54...........30% 55 and Older.....29%

18 to 34............43% 35 to 54............36% 55 and Older......21%

18 to 34..............50% 35 to 54..............31% 55 and Older........19%

Employment Status

Employed..........61% Not Employed......9% Retired..............18%

Employed..........63% Not Employed....12% Retired...............12%

Employed............62% Not Employed......13% Retired.................11%

25%

40%

38%

< $50k..............37% $50k to $99k....27% $100k or >........26% Average Income: $68,800

< $50k.............43% $50k to $99k...25% $100k or >.......16% Average Income: $58,800

< $50k...............44% $50k to $99k.....21% $100k or >.........16% Average Income: $58,000

Have Children Younger Than Age 18 Living in Household

Frequent restaurant customers also are more likely than the general public to say that going out to restaurants with family and friends gives them an opportunity to socialize and is a better use of their leisure time than doing the cooking and cleaning up themselves.

In addition to the social and convenience factors, frequent customers choose restaurants for the opportunity to eat food they donâ&#x20AC;&#x2122;t make at home. Roughly three out of four frequent restaurant customers said their favorite restaurant foods provide flavor and taste sensations that cannot easily be duplicated in their home kitchen.

Frequent Fullservice Customer

Household Income

Source: National Restaurant Association, National Household Survey, 2012

responded similarly. Both frequent off-premises dinner customers (64 percent) and frequent quickservice customers (60 percent) also were much more likely than the general public to say that restaurants are an essential part of their lifestyle.

In addition, 53 percent of frequent offpremises dinner customers said purchasing takeout food is essential to the way they live, while only 33 percent of the general public said the same.

Takeout Takes Off

Getting to Know Frequent Restaurant Customers Demographic profiles reveal that frequent restaurant customers are quite diverse. Frequent fullservice customers (59 percent) and frequent quickservice customers (54 percent) are more likely to be men, while frequent off-premises dinner customers are almost evenly split between women and men.

Frequent off-premises dinner customers have the highest

All Adults

Frequent Fullservice Customers

Frequent Quickservice Customers

Frequent Off-Premises Dinner Customers

You enjoy going to restaurants

93%

99%

95%

96%

Going out to a restaurant gives you an opportunity to socialize and is a better use of leisure time than cooking and cleaning up

79%

89%

80%

84%

Your favorite restaurant foods provide flavor and taste sensations that cannot easily be duplicated at home

68%

76%

74%

77%

Restaurants are an essential part of your lifestyle

45%

71%

60%

64%

Purchasing takeout food is essential to the way you live

33%

44%

48%

53%

Proportion of adults who agree with the following statements:

Source: National Restaurant Association, National Household Survey, 2012

August 2013 | 21

Deciphering Dining Decisions All Adults

Frequent Fullservice Customers

Frequent Quickservice Customers

Frequent Off-Premises Dinner Customers

Recommendation from family member or friend

94%

97%

97%

95%

Ease of parking at the restaurant

82%

84%

84%

80%

Restaurant review in a newspaper, magazine or online dining guide

64%

71%

64%

70%

An opportunity to go to a trendy or exclusive restaurant

49%

62%

57%

66%

Advertisement or promotion received via email

45%

54%

51%

55%

A special offer through programs like Groupon or LivingSocial

43%

51%

50%

54%

Information on social media sites such as Facebook or Twitter

35%

40%

44%

41%

Information on a peer-review website such as Yelp

34%

47%

40%

42%

Percent of consumers who said the following items are likely to factor into their decision when choosing a restaurant:

Source: National Restaurant Association, National Household Survey, 2012 concentration of younger adults, with 50 percent of individuals in this group between the ages of 18 and 34. In comparison, 43 percent of frequent quickservice customers and 41 percent of frequent fullservice customers are between the ages of 18 and 34. Conversely, frequent fullservice customers have the highest representation of older adults. Twenty-nine percent of frequent fullservice customers are age 55 and older, compared with 21 percent of frequent

quickservice customers and 19 percent of frequent offpremises dinner customers.

More than six out of 10 individuals in each of the three frequent customer groups are employed. Eighteen percent of frequent fullservice customers are retired, compared with 12 percent of frequent quickservice customers and 11 percent of frequent off-premises dinner customers. 

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22 | warestaurant.org

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Confused about technology?

Ask a millennial

By Lyle Hildahl, director of the WRA Education Foundation

I remember the first text message I received.

It was three years ago at a restaurant networking event. I had no idea what it was, and when I asked what to do, my colleague said click on it. So I did and there was the message.

Now what do I do. How do I reply? It was a very awkward moment.

I am not one to embrace technology. All the new innovations scare me. What I do know, however, is if I don’t choose to understand it and embrace the change that has resulted from new technology, I will have to drop out of society, period.

So, what do those of us like me do? We embrace it, understand it and delegate to the millennials the details. What’s a millennial? They’re those tech-savvy twentysomethings who are always swiping their index finger across a tablet or smartphone screen. You probably have a few of them in your business.

Thankfully, I have two millennials who work with me at the office—Jennifer Dixon and Kristina McLeod. They are my technology experts and communicate the Education Foundation’s work through social medial and all that online stuff. My son and daughter, who are also millennials, have consistently helped me with smartphones, computers, social media and on and on.

24 | warestaurant.org

As a Foundation, we have a resource that is untapped when it comes to reaching out to the experts. Approximately 2,000 kids—ProStart students—are at our beck and call to guide us through the technology we may not understand, but is vital to our success.

Tap into these experts in your own operations, and it can save you abundance of time, energy and resources. I don’t fear technology anymore. I embrace it—even when I don’t entirely understand it. Then I let my millennials execute the details around it.

Howard Shultz Starbucks CEO shared some similar insights with us at the National Restaurant Association food show in Chicago earlier this year. This is what he recommended:

Get involved in your communities Build on the “experience” in your business Embrace social media and mobile platforms Business today has evolved. It’s different. From my perspective, because of technological improvements, it’s much different. So, get to know your ProStart millennials.

Let them help you grow your business.

For more information about the Education Foundation or how to get in touch with a ProStart student, visit us at warestaurant.org/training-education.

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MSC Meeting via webinar

Sept. 3

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Sept. 24

Board Development Conference Call

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26 | warestaurant.org

NEW ALLIED MEMBERS GoCode Mobile Greg Gillard 36116 SE Turnberry Str Snoqualmie, WA 98065-8718 4252467893 gregg@gocodemobile.com www.gocodemobile.com Custom mobile optimized websites: it’s time to go mobile. With the ever growing number of people with smartphones, tablets and iPads, get your business up to speed with a mobile website. Our sites allow you to share information quickly and easily.

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Ask the Expert | Restaurant Profit Coach

Choose the Right POS System for You

By Rick Braa, CHAE

Q: My POS system needs to be replaced so I’m evaluating the different options. Things have changed since I first bought my POS, what do you think of the iPad-based systems?

A:

The newer versions of iPad or tablet POS are widely considered ‘Cash Register Version 3.0.’ First was the clunky cash register, providing a cash drawer but little data; then came the bulky and expensive POS systems producing great tracking and plenty of paper reports to go along with them; and now the new tablet POS. The emergence of cloud computing spurred the possibility of these POS systems to be deployed as software as a service, which can be accessed directly from the Internet. Cloud-based tablet POS systems give companies instant centralization of data, 24/7 access to data from anywhere with Internet access, ease of deployment and training, and lower costs.

A full-blown POS system will average $10,000-$20,000 depending on the provider and the number of terminals.

A good chunk of that money goes to wiring, hardware and professional services. A new tablet-based POS system will cost around $1,000-$5,000, while professional services have been lower due to the ease of installation and training. You will pay a monthly fee on top of this, ranging from $49 to $275.

The question is not whether these tablets are the new POS, but rather, when to purchase one. The technology is evolving and is in the early adopter stage.

100

50 25

Innovators

Early adopters Early majority

2.5%

13.5%

34%

Late majority

Laggards

34%

16%

Market share %

75

This graph illustrates how consumer behavior evolves, according to Rogers, E. (1962) Diffusion of Innovations.

Eventually, market share in a technology will reach 100 percent, but currently fewer than 15 percent of retailers use these new gadgets. Tablet technology should mature within the next 10 years, with the majority of companies using the technology. This is a decision point as the technology is newer, and the newer the technology, the riskier it can be. Those who purchase now are early adopters and have challenges to overcome.

30 | warestaurant.org

Most of the new systems are wireless and offer cloud-based storage. There are some things to keep in mind when purchasing one of these new wireless solutions: Make sure to have strong and reliable wireless service.

If the Internet runs into interference or goes down, performance can suffer. If there is heavy interference in your space, you’ll need extra wireless access points to deliver a good strong signal between work areas. This is one area to overbuild since POS has an impact on service to the guest and employee. Wireless channels are shared, and you’ll want to make sure you get more than your fair share with a robust wireless connection. Find the fastest, most stable connection available to minimize downtime.

Understand processing charges. Although processing charges may be very transparent in tablet-based POS systems (generally a flat percentage of the transaction), you may offset some of the reduced system costs with higher processing fees. Your ability to negotiate these fees or find a better deal on processing may be limited.

Ensure sure your network is secure. If you offer Wi-Fi to your guests, ensure it’s on a network that is separated from the network where the POS is located. Limit guest access to reasonable speeds to prevent one user from using a disproportionate amount of bandwidth and limiting the rest of the guests in your location. Also, emphasize security with employees so they do not use other publicly available networks to process sales transactions.

The most important factor in making a decision to use a tablet-based POS system is choosing the right company and support behind the software. There has been an influx of new companies in this space pushing to acquire market share, many of which have little-to-no previous experience supporting a POS. Some systems are being pulled out as fast as they went in—wasting time and money. Choose a provider with an established POS solution and a proven track record of deploying, supporting and upgrading POS systems. There’s no substitute for established providers, as they have a migration path that has been thought out and tested for years, and in some cases, decades.

For more information on improving profitability and driving sales, contact AMP Services at rbraa@ampservices.com. Rick Braa is the founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability.

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