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The rise of the machine: Stores and restaurants turn to self-service kiosks

By the end of next year, every McDonald's restaurant in Western New York will have self-service kiosks in its dining room.

The kiosks allow customers to place their own orders via touch screens stationed at the front of each store, then seat themselves and have their order brought to their table by a restaurant employee. The kiosks have already been installed in some locations, and all McDonald's restaurants in the country will eventually make the switch.

It's part of a national trend toward automation at stores and restaurants, driven by more tech-savvy consumers, less expensive and easier-to-implement technology and the rising costs of unskilled human labor.

Researchers say increased automation could put workers out of jobs, especially as they advocate for higher wages.

A study by economists Grace Lordan and David Neumark found that minimum wage hikes can put workers in jeopardy if their jobs are easy to automate.

"Increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers and increases the likelihood that low-skilled workers in automatable jobs become unemployed," the study found.

But McDonalds said the move has nothing to do with cutting labor costs. In fact, the company expects to add employees, banking on a sales boost from the added efficiency and diverting front-end cashier work to other customer-facing positions in the dining room such as assisting with kiosk orders and bringing food to tables.

"It's all about taking care of the customer and creating a better customer-service experience," said Sandy Haefner, who started as a McDonald's employee in 1974, became a franchisee in 1989 and now owns five McDonald's locations in West Seneca, Lackawanna, Depew, Cheektowaga and Lancaster. "We're adding that human touch."

Adding self-service kiosks is "all about taking care of the customer and creating a better customer-service experience," said Sandy Haefner, owner of five McDonald's locations, in West Seneca, Lackawanna, Depew, Cheektowaga and Lancaster. (John Hickey/Buffalo News)

Either way, it's clear that automation is increasing in the fast-casual food service industry and retail. It started decades ago with self-service checkout at the grocery store and it has grown as technology costs have dropped and automated kiosks have gotten better and easier to use.

And it's not just McDonald's that's embracing the new technology. Olive Garden, Panera Bread, Applebee's and Chili's started rolling out tabletop kiosks as early as 2013. Others have followed suit:

  • Wendy's will add automated kiosks at 1,000 of its stores by the end of the year
  • The latest store redesign at Subway will bring kiosks to more than 3,000 locations over the next couple of years, and eventually to all 44,000 of them
  • Walmart is testing Scan & Go, which allows customers to use a smartphone app to scan and bag orders as they shop, and leave without stopping at a checkout line
  • Amazon Go is testing a store in Seattle that lets customers grab items and walk out without paying. It uses computer vision, sensors and other technology to detect when products are taken or returned from shelves, then charges them to the shopper's Amazon account

Shoppers enter and check out with purchases at the cashier-less Amazon Go store in Seattle. The store uses computer vision, sensors and other technology to detect when products are taken or returned from shelves, then charges them to the shopper's Amazon account. (Getty Images)

Part of the reason for the push toward automation is rising labor costs. The minimum wage across upstate New York is on a path to reach $12.50 an hour. A tight labor market also is pushing up wages for part-time and entry-level work, even beyond the minimum wage.

Labor costs rose 5 percent for Wendy's in 2016, and they're expected to keep rising.

“We think we’ve hit the point where labor-wage rates are now making automation of those tasks make a lot more sense,” Bob Wright, Wendy's chief operations officer, referring to "repetitive production tasks" in a conference call with investors last year.

Automation could put as many as half of the nation's 16 million retail jobs at risk over the next decade, with cashier and clerk positions under the greatest threat, according to a study by Cornerstone Capital Group.

Inez Coleman, guest experience leader at the McDonald's at 1154 Union Road, West Seneca, delivers an order to Bob Kazmierczak of Buffalo. He placed his order using the new self-service kiosk, eventually to be found at all McDonald's across the United States. (John Hickey/Buffalo News)

McDonald's has been adamant that the kiosks are a way to serve customers better, not eliminate jobs or reduce labor costs. McDonald's argues that the kiosks and table service help differentiate it from the thousands of other quick-service restaurants, and help it withstand pressure from grocery stores' prepared foods sections and meal kit delivery services such as Hello Fresh and Blue Apron.

The kiosks improve customer satisfaction and free up staff to do more important work, like interacting with customers in the dining room, company officials said. And it's just one more way the company is evolving in response to customer tastes. It already offers mobile ordering, where customers place an order by phone via an app and pick it up at the store or drive-thru, and offers delivery via Uber Eats.

"The world we live in today is different than it was five years ago," Haefner, the McDonald's franchisee said. "Customer expectations are always evolving."

Employees at the renovated McDonald's on Union Road in West Seneca, which includes new decor and self-service kiosks with table service. A study has found that consumers order more food and spend more money when placing their own orders. (John Hickey/Buffalo News)

Research shows McDonald's may benefit from the kiosks in other ways, whether they reduce labor costs or not. Where kiosks have already been installed, customers ordered more food, spent more money and were more likely to super-size their meals than they were with human order-takers.

Such a sweeping implementation of kiosks might not have been possible just 10 years ago. But millennial consumers, with their affinity for technology and their preference for convenience, have hastened the shift.

Indeed, the kiosks touch on every prominent preference of the millennial shopper. They prefer the sense of control technology gives them, allowing them to customize and place their own orders at their own pace without the risk of outside human error. They want a simplified payment process. And they want more personalized customer experience, which they'll get with McDonald's table service.

And if you don't like the kiosks popping up at quick-serve restaurants across Western New York, there are still human employees waiting at the counter to help you.

For now.

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