Hot Diggity! NEXTEP Kiosks Offer Alternatives to Rising Minimum Wage

TROY, Mich., Aug. 7, 2014 /PRNewswire/ -- Diggity Drive Up, a new restaurant featuring gourmet hot dogs and sandwiches coupled with a craft beer bar, recently opened their doors in Coon Rapids, Minnesota, on July 17 amidst a touch of controversy. Some local residents and journalists have voiced criticism over the apparent replacement of traditional restaurants servers with kiosks. Local news even reported that Diggity had come up with a brand new concept, a "server-free restaurant," sparking heated debate about jobs in the local economy.

Photo - http://photos.prnewswire.com/prnh/20140806/134172
Photo - http://photos.prnewswire.com/prnh/20140806/134171

Reports are missing one key concept, however. Instead of utilizing traditional full service, Diggity has adopted the Fast Casual model similar to other industry giants – Qdoba, Panera and Five Guys, to name a few – where servers are not needed in the cafeteria-style atmosphere. Fast Casual diners are looking for a higher quality of food not offered by QSRs (fast food) without the time commitment found in traditional, full service restaurants.

Critics are right about one fact: Diggity has opted to eliminate cashiers in favor of self-order kiosks coupled with remote ordering. Customers perform the data-entry for orders themselves, formerly the role of the counter workers at most fast food establishments. Self-order options promise to be faster and more accurate for guests as they eliminate miscommunication between the customer and the employees, and restaurants see benefits from increased customer flow and less food waste due to incorrect orders.

Minimum wage has recently become a controversial topic, with fast food workers nationwide striking to bring attention to the question of what constitutes fair compensation in the industry. Demanding a $15 per hour "liveable" wage – more than double current federal minimum wage – poses problems for restaurant owners who operate in what is widely considered a narrow profit margin industry.

For Fast Casual and Quick Service Restaurant business owners in a competitive niche, rising food costs coupled with other factors in a still-struggling (and still-inflationary) economy force them to consider alternative means to keep operational costs down while delivering an affordable meal featuring quality food paired with a great experience for guests.

Anoush Ansari, managing partner for Hemisphere Restaurant Group and Diggity, simply wanted to deliver great American food with a technology-driven experience. Hemisphere wasn't seeking to operate a full service restaurant with this particular concept as Ansari understands the costs associated with operating one. The main goal, Ansari explained, was to deliver great food in a Fast Casual atmosphere to keep costs low and deliver competitive prices for their guests.

"This is one way we can keep margins where we want them to be, with the use of technology," said Ansari. He continues to acknowledge that the rising cost of minimum wage affects the costs of dining, often passed on to the guest. In response to an online article criticizing the use of technology in place of servers, a representative of Hemisphere rebutted:

"Classics like dogs and beef sandwiches aren't usually served up table side by legions of the much appreciated, skilled service professionals working in full service establishments. The important questions are: how do customers benefit from the integration of affordable, scratch made food, service and technology? And how many new jobs exist as a result of this new restaurant?"

Customers interviewed by local news stations seemed to prefer the kiosks and didn't miss having a server, comparing it much to a typical experience using self-checkout at the local grocery store, or to experiences at similar Fast Casual concepts. Another leading concept, Panera, recently spent $43 million to develop a new system with self-order and mobile ordering playing central roles, similar to the system provided by NEXTEP SYSTEMS (http://nextepsystems.com) for Diggity.

Tommy Woycik, President of NEXTEP SYSTEMS based in Troy, Michigan, says that self-order options aren't replacing people, and are going to become more prevalent at the behest of guests, not just owners who want to lower operational costs.

"Self-order kiosks allow business owners to repurpose their labor to food production and customer service," said Woycik. "When you streamline the order process, you increase throughout, resulting in more orders and improved speed of service. The staff that were formerly standing at the counter just to enter orders are now free to help on the line, maintain appearances in the restaurant or give guests with questions their undivided attention."

But what about the guests? "From what we've experienced, once they try it, most guests prefer ordering online or from a kiosk, especially when we have features that remember their favorite orders," Woycik continues. "Self-order kiosks paired with mobile ordering eliminate two of the things people dislike the most about fast food – long lines and inaccurate orders. With our solution, guests get the personalized experience they want in less time, and the kiosk gets the order right every time."

"It's a win-win for guests and owners alike."

Media Contact:
Brett Duncan
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SOURCE NEXTEP SYSTEMS