McMobile
By David Cotriss, Wed Aug 29 00:00:00 GMT 2001

US fast food is about to get faster. Or is it?


How often does this happen to you: you're driving along, on your way to an important meeting or maybe a friend's house, when you decide you want a bite to eat? So you decide to stop at the nearest McDonald's for some of those great fries and a small burger, only to find 10 other people had the same idea, making you late for your meeting. What if you could place your order on your phone and have it waiting for you when you arrive?

I must say that the restaurant industry isn't the quickest to adopt new technologies. However, a study by Hospitality Technology magazine on 200 restaurant owners and operators found that 98 are planning to conduct pilot tests for wireless ordering within the next year. Luckily, some progress is also being made today in this and related areas.

Finding the nearest restaurant - and placing the order


AvantGo and Vindigo immediately come to mind when I think of location finders, since they allow you to find the closest store worldwide via your wireless device. I spoke to Jim Gurfein, president and CEO of Restaurant Row, a dining resource on AvantGo containing information on 175,000 restaurants worldwide including menus and pictures, of which 35,000 accept reservations for a nominal fee. Gurfein says over 13,000 seats are booked through the service every month, mostly in the United States. Order placement and payment capabilities may come later when wireless applications become easier to use and greater security measures are in place.

I also found that TGI Friday's, a global restaurant chain, was the first such establishment to launch a wireless site. The service is free and uses cell towers to auto-locate the nearest restaurant. Over 700 locations in 52 countries are on the service, which also offers the menu and latest promotions. Stacy Baw, the chain's Internet marketing manager, says the response has been good, although she could not provide specific numbers. She says ordering and payment services may be offered soon.

Perhaps the reason wireless ordering hasn't taken off is similar to that of food.com and other Internet ordering services - it's too much hassle and difficult to specify exactly what you want. According to Cahners wireless analyst Dom Longueuil, "The user interface is poor, and people would rather call and be able to negotiate." "Cost is also an issue - people may not want to pay extra fees," notes Forrester analyst Carsten Schmidt.

The fast way to pay


So if I can't place my order, maybe I could at least use a faster (wireless) payment method, especially for fast food. Progress is being made in this area, but only in specific locations. Whereas smart cards evolved in Europe, the United States is largely using RFID (radio frequency identification) systems for wireless cash transactions.

The technology is being used in several Chicago and Orange County-area McDonald?s restaurants. The system generally bills credit cards and automatically upsells Cokes and the like. Schmidt says it has been a success, with more than 90 percent of customers taking the upsell. Global restaurant chain Johnny Rockets has also successfully tested a similar payment system with Go2 for wireless credit card payment.

Another startup that is allowing the fast food industry to tap the credit card market is New York-based 2Scoot, currently deployed in Kentucky Fried Chicken and Taco Bell locations in Texas and North Carolina. If I lived in one of those places, I could use a small tag on my key ring, for example, to automatically provide my credit card and other data at the point of sale.

Taylor Thompson, 2Scoot's vice president of business development, says the system speeds the line 20 to 25 percent over cash, and generates an average order size 30 to 50 percent larger since people aren't limited to the cash they have on hand and can order for other people. He says expansion to Europe will occur sometime in 2002.

While Europe has already adopted POS systems extensively, Schmidt says more restaurants in Europe and Asia will adopt new payment methods after being proven in the United States. "Industries where you need coins, such as public transportation and parking, will lead in this area," explains Schmidt.

He also notes the high cost to outfit restaurants with special readers, will take time. "You could have a bar code on your phone screen and send the charges to your phone bill," says Iain Gillott, principle of wireless consultancy iGillottResearch, adding that such a scenario is realistic in 12 to 18 months. He agrees that small payments make sense, since larger tabs on phone bills pose a higher risk to carriers. Of course, privacy issues would also need to be considered.

And a discount too?


Spam is the first word that comes to mind when I think of wireless coupons. But if I had requested them ahead of time or they were tied to a location directory like AvantGo, I probably wouldn't mind getting a free drink with a burger and fries.

Schmidt says the United States leads in restaurant coupon trials, although McDonald's has conducted successful SMS promotions in Germany, for example. He doesn't think SMS (including location-based) couponing will take off due to annoyance and the novelty factor wearing off.

Nevertheless, several United States trials show positive results. Mobile ad network SkyGo recently sent coupons for Subway, Kentucky Fried Chicken, and Turley's to opt-in participants in Boulder, Colorado. SkyGo president and co-founder Daren Tsui says the click-thru and redemption rates were positive, particularly for ads including the words "FREE" or "% Discount" and tied to trivia and polls. The results did decrease during the four-month run, however.

Another wireless coupon company, PlanetHopper, sent time-sensitive 2 for 1 drink and 10 percent off coupons for local bars and restaurants to New York residents with positive results - though it was admittedly difficult to track the SMS results and gauge which types of offers worked best.

The company sees more value for larger chains and large potential overseas. Notably, the company didn't charge for the ads, but expects little resistance to doing so in the future.

Aside from some help finding the closest restaurant when I'm on the road, it'll probably be a little while before I can truly call fast food fast. Fortunately, companies like 2Scoot are tackling the payment issue, speeding the process for the consumer and providing positive ROI for restaurants. As smart cards start to infiltrate America, even more help is likely to follow. And if I can save a few cents in the process, all the better.

David Cotriss has published over 100 articles, mostly on wireless and new media topics. He has an advertising background and is originally from San Jose, CA. He now resides in sunny Los Angeles, CA.