McDonald's best-kept secret may be that it offers free Wi-Fi with every meal. More than 8,000 of its restaurants provide high-speed wireless service to customers. The fast food giant has yet to fully promote the perk, but it has already attracted one group: Gamers using Nintendo DS systems currently account for 25 percent of the Wi-Fi traffic in its restaurants.
Although Wi-Fi attracts customers, that's not why McDonald's put it in. "It gives us a platform to use wireless applications within the restaurant," says David Grooms, vice president of IT at McDonald's USA.
For example, handheld devices are used for order-taking and inventory management. But since McDonald's has opened up access to draw in more customers, "getting the word out that we are a secured wireless haven is really big for us this year," Grooms says.
Wi-Fi is just one of several technologies that are beginning to transform the restaurant business. Others include tools for automating operations, contactless payment systems, kiosks, digital menu boards, and Web and mobile ordering and payment technologies. Such innovations are a big leap for an industry that only recently began accepting debit and credit cards, and change is still coming slowly.
"Most operators don't even know what's out there," says Aaron Allen, founder and CEO of Quantified Marketing Group in Orlando.
"Restaurants are the industry that technology forgot," says Steve Bigari, CEO of I3 Consulting and Management Service in Colorado Springs and a former McDonald's franchise operator. But he sees disruptive technologies shaking up the business in the next five years. "Restaurants that lead are going to put a lot of people out of business," he predicts.
Arm's length IT
Of the one in three restaurant operators using more technology than they were three years ago, half say that they've increased productivity, according to a survey conducted by the National Restaurant Association. As for the other two-thirds, tight margins and fear of alienating customers have been factors in their reluctance.
"The industry has kept a lot of technologies at arm's length because of the feeling that it takes away part of the romance" of dining out, Allen says. Even so, 50 percent of fast food operators polled plan to allocate a larger proportion of their budgets to technology this year.
Strong growth is fueling the move toward automation. The restaurant industry will hit $537 billion in sales this year, according to the National Restaurant Association. Much of that growth comes from changing consumer habits. In 1995, 25 percent of all food dollars was spent in restaurants. Today, it's 48 percent. Technology is also appealing because food service is notoriously labor-intensive, employing 12.8 million people. "When you apply any technology, the gains can be quite substantial," says Hudson Riehl, senior vice president of research at the association.
"For any of our clients that don't have these systems, the competitive disadvantage is scary," says Allen.