Subway and Pizza Inn test AI solutions for phone orders, site selection
This installment of Tech Tracker looks at restaurant applications for AI technology as well as the latest moves from major third-party delivery companies.
DoorDash launches Postmates-style subscriber program: The third-party delivery wars are heating with the latest chess move announced this month by DoorDash. The company launched a monthly membership program called DashPass for $9.99, in line with membership fees at rival Postmates. DashPass subscribers are not charged a delivery fee on orders of $15 or more. DoorDash also launched Pickup, where customers can fetch their own orders made through the DoorDash app. There’s no fee for this service. National chains working with DoorDash to offer pickup service include Smashburger, BJ’s Restaurant & Brewhouse and Pokeworks. Regional chains using pickup include Chop’t Creative Salad Co. in New York, Jetties in Washington, D.C., and Big Star in Chicago.
AI-powered Location Hunter: Restaurant chains such as Subway are tapping AI-powered tech such as SiteZeus to help them optimize revenue at new or relocating restaurants. Using artificial intelligence, Tampa, Florida-based SiteZeus is providing multiunit restaurant operators predictive modeling that can be used to select optimal locations for earning revenue — even if the location doesn’t make sense on paper. In other words, even premium commercial sites, often dubbed “A” retail centers or malls, might not work for certain brands, marketing director Jorge Hermez said.
Acting like a machine version of a commercial broker, SiteZeus digests real-time data about a brand, and combines the information with outside variables such as local demographics, traffic and household income. For the best results, SiteZeus must look at quantifiable data from a chain, such as parking availability, visibility, signage, revenue, square footage, number of tables, if there is a drive-thru, and access points. Brands with multiple locations that collect this data typically see higher accuracy in their predictive models, the company said. Once they get a snapshot, restaurant clients like Subway can filter the variables to see how each one impacts revenue. For example, a limited-service restaurant considering a drive-thru could add that variable to see how much more money that would generate.
Hermez the company is not “selling a bullseye” location for brands, nor is SiteZeus trying to replace traditional commercial brokers. Instead, SiteZeus is providing brands “optimal locations” for generating AUVs that are consistent with a chain’s highest-performing units.
The company said the technology removes the risk of real estate guesswork.
“It’s really like a tool to check intuition,” Hermez said.
Besides Subway, SiteZeus works with Sonny's BBQ in the Southeast and the growing burger chain Burgerim.
SiteZeus was founded in 2015 by two Florida-based brothers and entrepreneurs, Keenan and Hannibal Baldwin. Both formed a venture capital fund to support emerging restaurant and retail concepts. The two opened a restaurant, in what they thought was a prime location, but quickly ran into foot traffic challenges. The founders pivoted to technology to solve location problems, and SiteZeus was born.
Handhelds heat up: Boston-based Toast recently received $115 million in Series D funding to support its growing platform of services for restaurants. The investment will specifically fund R&D of handheld payment technology called Toast Go. Odd Duck, a full-service restaurant in Austin, Texas, said it has seen revenue increase by more than $500,000 since adopting the handheld devices. The restaurant also links a decrease in server turnover rates to the devices because tips have grown by $7,000 per server, annually, with the handhelds, according to Toast.
Is phone ordering still a thing? With the everyone using mobile devices and laptops to order restaurant meals these days, have phone orders gone out of fashion? Not for Pizza Inn. The Colony, Texas-based pizza chain, owned by RAVE Restaurant Group, still fields a lot of phone orders. But, when it’s busy in the restaurant, “you can’t catch every order” on the phone, said David Roberts, vice president of information technology. Pizza Inn recently tested a conversational artificial intelligence system called Kea.
The automated line takes orders in a “Siri” like fashion. It is programmed to upsell and ask questions to ensure the order is accurate. For example, if someone forgets to say what kind of crust they want, Kea is programmed to ask before sending the order.
The system can field up to 20 orders at a time. Roberts said the test is a much more sustainable solution compared to using a call center, which is something the brand had tried in the past.
Clients using the phone service are experiencing, on average, an 8 percent increase in revenue. On the labor side, it saves most restaurants about four hours a day, according to RMS Omega Technologies, the Bluffton, S.C.-based company that offers the Kea system.
Roberts said RAVE’s fast casual brand Pie Five Pizza Co. is testing the AI system at a Kansas City, Mo. location to see how it impacts sales as the brand doesn’t take phone orders.
Pizza Studio, Denny’s, Mellow Mushroom and Round Table Pizza are also testing Kea at restaurants in California, Kentucky, and North Carolina.
Grubhub gobbles up another tech company: The growing third-party delivery company recently entered into an agreement to acquire LevelUp for $390 million in cash. Boston-based LevelUp designs mobile platforms for national and regional restaurant brands. Having LevelUp’s “restaurant-facing technology” is expected to give Chicago-based Grubhub an advantage as it continues to strike partnerships with national and regional fast-food chains including KFC, Taco Bell and Del Taco. LevelUp processes about 100,000 orders a day, representing about $400 million in restaurant sales. That pairs with Grubhub’s massive user base of 15.6 million active users, a 70 percent increase from last year.
Contact Nancy Luna at [email protected]
Follow her on Twitter @FastFoodMaven
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