Drive-thru operations, and the solutions that shape them, evolve just as nature does – survival of the fittest.  Great ideas don’t necessarily translate to success; even those great ideas that are worth the cost.  Due to the fragmented nature of the buying community, the relatively short life cycle of technology, and the highly competitive nature of the business and corresponding need to closely watch spending, an innovation in the QSR industry typically will succeed only when it demonstrates an inarguable positive return on investment (ROI) in a relatively short period of time. 

The implication is that innovations in QSR, even those that can immediately reduce costs or increase sales, may not earn significant market penetration because buyers are reluctant to take risks with technology.  A good example of this can be found in speaker technology.  Despite the fact that full duplex systems (an open line, similar to a phone conversation) have been in the market for over ten years, a recent study showed that over 20% of the restaurants surveyed still use the old half duplex systems (where only one party can speak at a time).  When operational efficiency improvements are subtle, at times to the point that customers may not even immediately notice them, operators may be even more resistant to investing.  With a multitude of reasons why you should not buy into every new technology that comes along, it is critically important to keep in mind that sustained cost reductions are often about making good investments rather than simply not spending money.  For those operators and chains that embrace technology and make smart purchasing decisions, the cumulative effect is long-term health and improved profitability.

By adding proven technologies and integrating them into your business, subsequent opportunities will often allow you to build and enhance even further.  As computers have become more common in restaurants for reporting and management, a by-product has been the ability to use this power to enhance operations.  According to HM Electronics’ Director of Marketing, Daren Haas, “Technology has accelerated dramatically over the past several years in QSR, and computers are driving it all because they give restaurants the power to use the technology that’s available.”  Furthermore, the technology being utilized is often relatively inexpensive because the roots are developed in other industries.  The wireless communications systems for electronic payment authorizations and order processing, for example, were primarily developed by the cellular phone industry and adapted to QSR applications afterwards.  As such, a significant amount of the R&D costs were already accounted for before the technology even hit the QSR industry.  Ultimately, operators already invested in a technology, such as wireless, will be able to utilize the infrastructure for other purposes within the restaurant, such as improved internal communications to facilitate a better workflow.

Technological solutions designed to help operators market and/or improve efficiency can now be found at just about every stop in the drive-thru, and sometimes even before your customer gets in line.  One example of this is a demand-forecasting program developed by HyperActive Technologies, called HyperActive Bob.  Introduced to the market in 2005, HyperActive Bob counts vehicles as they come onto the lot.  Utilizing POS data, employee feedback, “robotic vision”, and algorithms that analyze data from day to day, week to week and second to second, the system produces a demand forecast used to guide employees in production so that they are actually starting the cooking process for orders that have not yet been placed.  According to Gregor Thonpson, HyperActive Technologies’ VP Sales & Marketing, payback on a system is often as short as six months, but almost always faster than a year.  Although Insula has not yet tested this system, theoretically, the payoff is the result of reduced waste, improved service times, and better overall quality.

Once your customer is in line, the pre-sell menu board is a great opportunity to take advantage of otherwise “wasted” time.  It not only provides him/her with the opportunity to make decisions before reaching the order point, but also provides a subtle opportunity to market, and can help fill otherwise void time while s/he gets through the line.  Based on a recent Insula study, however, just over half of quick serve restaurants utilize a pre-sell board in their drive-thru – despite the fact that restaurants with pre-sell boards consistently provide faster service times than those without.

The next generation of pre-sell boards is a digital display rather than the current, static boards.  Some manufacturers, such as Delphi Display Systems, are introducing digital LCD displays that allow the operator to change the content based upon time of day, day of week, or current promotions.  In some models, content is stored locally and can be scheduled by day-part.  Another model is equipped with a transmitter that converts a signal, allowing much greater distance between the in-store server and the display.  This model also allows an operator to run multiple displays off of one server – particularly useful for a co-branded food service/c-store operation where gas pump-topper displays mounted on each dispenser could run the same loop.  If the restaurant is also connected to the Internet, content can be delivered to the store from the home office or other outside source.

Upon reaching the order station, several different options for marketing and/or improved communications can be found.  The same digital screens as noted above can be incorporated into the menuboard or order confirmation board.  The caution here is that digital communications are not so entertaining as to actually slow the customers order while s/he is engaged with the messaging.   

The incidence of order confirmation boards (OCB’s) was about the same when comparing available 2005 data to the 2006 Insula drive-thru performance study.  Manufacturers, however, have cut production of LED confirmation boards to a minimum.  As a result, over the next several years LCD boards will be the norm simply through attrition.  New management tools that have recently been introduced for the OCB’ make it easier on operators to customize marketing to specific days and day-parts, as needed.  As with the menuboards, content can also be downloaded from an outside source, provided the restaurant has Internet capabilities.  As costs of digital equipment and technology fall, the ROI for many of these devices will become more and more attractive. 

Verbal communications have seen similar advancements.  Although many innovations may be too subtle for customers to notice on any given visit, the overall sense that there is now more clarity than ever in the speaker interactions is a common perception.  Included in the last 3 years of advancements are more noise cancellation technology and digital wireless systems.  HM Electronics has recently introduced an all-in-one headset that allows the operator to function without being wired to a belt pack. 

The ordering process is generally regarded as the single most time-consuming element of processing a drive-thru order.  As a result, several chains are experimenting with different configurations in an attempt to get orders into production as early as possible.  These experiments include a phone center to take orders rather than an employee at the restaurant.  In this instance, your order is actually communicated to a centralized location and then sent back to the restaurant electronically.  Although proponents claim significant time savings, the future of call center order processing seems limited with the emergence of wireless headsets, which free on-site employees from the register.

Another innovation in the order process is the use of a remote order taker.  A remote order taker is an employee who is equipped with a wireless communications device and stationed in the drive-thru line.  His/her job is to take orders before the customer actually reaches the primary menuboard, where the speaker is traditionally positioned.  This gets orders into the kitchen for production during peak periods much earlier in the process than otherwise possible.  One obvious challenge to this system is making sure customers know what they want to order before being approached by the remote order taker.  Clearly a pre-sell menuboard greatly improves the odds that your customer will be ready, and the system will inherently be more effective for chains that have a larger percentage of repeat or frequent customers (who already know what they want upon arrival).  There are also obvious limitations to this system during inclement weather.

Perhaps the most intriguing innovation on the horizon is the use of cellular phones for both ordering and paying for your order.  From an ordering perspective the challenge for operators is the delivery mechanism – how do we organize and queue orders that come in over the phone?  Where and how do we deliver the phone orders as the customers arrive to pick them up?  Moreover, if we prepare the orders in advance to save on service time, how do we maintain quality, particularly on items that are extremely time sensitive such as fries?  There is certainly enough appeal to the idea of call ahead ordering, provided the unique challenges a QSR faces can be overcome.

As you proceed to the pay station, several recent trends and innovations regarding electronic payment options have been introduced within the past few years.  The acceptance of payment cards (i.e. major credit cards/debit cards) has dramatically increased from less than 8% of restaurants accepting in 2000 to approximately 75% today.  Des Docherty, VP of Acceptance Solutions at Visa USA, indicates that this trend has been facilitated by some fundamental changes in the way Visa and the other card companies do business.  Specifically, merchants in 17 different industries (including QSR) are protected from charge backs on Visa purchases under $25, even without a signature, provided that they authorize the purchase at the time of sale.  According to Gavin Waugh, Sr. Director of Treasury at Arby’s, the other major card companies are doing the same within QSR.  Wireless authorization only takes a few seconds in most cases, so QSR operators can accept card payments, with no risk, in less time than it takes to process a cash transaction.  The domino effect with technology then allows accepting chains the ability to develop pre-paid gift card and loyalty card programs, where tremendous potential for increased sales exists.

As if this technology has not spread fast enough, the next generation of card acceptance is already being unveiled.  Payment cards equipped with an antenna and computer chip are now in select markets around the nation.  The technology is typically referred to as RFID (Radio Frequency Identification.)  These “blink”, or contactless cards allow a user to simply wave the card in front of a reader and the reader will pick up the pertinent information to process the transaction.  The readers are designed to read cards within one second when presented within one inch of the reader.  Functionally, this is similar to Mobil Speedpass, and it allows customers to use a card without the need to hand it to a cashier to process the transaction, and without the need to ‘swipe’ it through the reader.  KFC is currently testing this solution in the Atlanta market, while nationally both McDonald’s and Arby’s have already installed a significant number of RFID readers in their restaurants, including readers at the drive-thru.  Waugh summed up Arby’s effort by saying “You sometimes just have to take the leap of faith on these things, and we believe this is the future of payment in our industry.” 

Visa, MasterCard, and American Express are all participating brands in contactless acceptance.  According to Lee Knackstedt, VP of Payment Products at JPMorgan Chase, “To date we have issued over 7 million blink enabled cards and continue to investigate other technologies for new, innovative ways to pay.”  So what could be next?  Paying for your order through your cellular phone is a natural extension of the work already in progress.  Many knowledgeable sources believe that within ten years your cell phone will store all of your payment and loyalty card information, which will be communicated via RFID to a reader upon your command.

Time will tell which innovations ultimately provide the competitive advantage that operators are looking for.  As is often the case, innovations can also bring additional challenges.  Integration is currently a hurdle that many users of these technologies are trying to overcome.  Research and development is in progress to allow internal speed of service timers to be integrated with the restaurant’s existing POS system, which would provide operators significant insights into service speed issues.  Similarly, work to allow integration of electronic payment processing to the current POS system is also a priority.  It is clear, however, that those who make good investments in the multitude of available solutions will ultimately be the survivors, while those that do not will fall further and further behind as technologies build on each other.