According to new research conducted by Tom Fangyun Tan of the Cox Business School at Southern Methodist University and Serguei Netessine of the Wharton School at the University of Pennsylvania, tabletop technology is likely to improve sales by 1% per check and reduce meal duration by 10%. The combination of these two effects increase the sales per minute or sales productivity by 11%.
Data was collected from a U.S. restaurant chain with 66 locations. The research looked at transaction data from 2012 to 2014, or 2.6 million transactions.
“We estimate the 1% sales lift per check translates into $2 million in extra sales or $1 million in profit per month in the short-run,” said Tan, an associate professor of information technology and operations management, referring to the restaurant chain that was the subject of the research. “And that’s a conservative estimate.”
“A good, attentive waiter already does what the tabletop device does… a less attentive or forgetful waiter does not, but relies more on the device, which makes up for the lacking ability resulting in faster service,” said Tan.
The data suggest that restaurants reevaluate their operations to fully reap the benefits of tabletop technology. They can gain new competitive and financial advantages in an industry that faces hyper-competition and high levels of closures in their first year of business.
The new research is scheduled to be published next month in Management Science, a premier peer-reviewed scholarly journal focused on research using quantitative approaches to study all aspects of management in companies and organizations. It is published by INFORMS, the leading international association for operations research and analytics professionals.
More information is available at www.informs.org or @informs.
