Blog Assignment # 5

Dynamic Digital Signage - Influencing POS Behavior

Hospitality Upgrade Magazine

By: Michael Kasavana, Ph.D
10/1/2007
http://www.hospitalityupgrade.com/_magazine/magazine_Detail.asp?ID=244

Summary:

Dynamic Digital Signage (DDS) which surfaced a couple of years ago focuses on advances in “video processing and display technology." This technology is particularly good for QSR properties because it allows a restaurant to promote certain products and increase interaction with their customers – without being pushy or overwhelming to the guest. Because customers in a restaurant already made the decision to be there, DDS simply focuses influencing what that customer buys. Up-selling, branding and product bundling are the main efforts of DDS. Customers know when they are being marketed to, thus QSRs want to entertain them while informing them of menu items, preparation methods, new item introduction, modifiers, and discounts/promotions. While menu boards are non-engaging and usually are part of the background, DDS is active using audio, video, music, animations, graphics, stylized fonts and creative presentations. DDS technology compiles media files into playlists which can run until they are interrupted, change depending on the time of the day, or play randomly based on the stores demographics.

The most efficient way to implement DDS broadcasting is to by using brief broadcasts that deliver information efficiently and influence the buying decision. DDS broadcasting is designed to grab the customer’s attention and keep it implemented in their mind. Today’s customer, especially young adults, have grown up with ipods, cell phones and HDTV and subsequently, appreciate good audio/video quality outside the home. However, to effectively use DDS in a QSR, the content should be up-to-date and engaging while making sure the message delivered is in line with the audience, the companies marketing objectives and the brand.

To see how DDS affects purchasing behaviors, QSRs can use three techniques. One being POS correlation, which is displaying different messages in separate parts of the restaurant to see if they an impact on certain sales and what demographics are affected. The second technique is event-based couponing, which is to display promotional messages such as "Take a $1 off with purchase of a combo," which will encourage the buyer to look in the same area during future visits. The final technique is net impression tracking which is evaluating how much content the customer recalls after seeing the message.

DDS can be a very persuasive tool that restaurateurs can use to increase their sales. Because customers are in restaurants by choice, they can be influenced easier than those in retail settings. Restaurants can target certain markets during certain parts of the day just by simply flashing the correct banners and promotions and media content. Their products will get sold, customers will continue to be loyal and money can be earned.

Reflection:

I this DDS is such an interesting and creative technology that QSRs can utilize. It is very useful to blend DDS with the standard menu boards so that guests are almost forced to see the messages and videos. Engaging presentations will “wow” the guest and leave a lasting impression that they will hopefully remember in the future. Audio, video and stylish designs will allow the business to connect with the customer. It’s also very beneficial to display specific messages during certain times of the day to reach the different target markets. DDS can deliver these entertaining messages without being invasive on the buyer, but somehow having an impact or their purchasing decisions. This is favorable to restaurants looking to increase sales through up-selling and bundling. One McDonald’s in Chicago applied DDS to their restaurants by 1.) putting flat-screen televisions above the front counter which displayed interactive promotions, 2.) putting TVs thru-out the restaurant, encouraging customers to text messages to the system to change what they watched, which in turn saved the number to send promotional materials in the future and 3.) putting a camera and TV in PlayPlace so children could see themselves playing . I believe any QSR that utilized this technology would get positive results considering how personalized it could be. DDS is really expensive to implement into a business, however I’m sure the investment would pay off after a few years.

Blog Assignment # 4

Managing Energy in a Volatile Environment
By: Geoff Griswold
Hospitality Upgrade Magazine
http://www.hospitalityupgrade.com/_magazine/magazine_Detail.asp?ID=62

High energy costs are dramatically influencing hotelier’s costs, especially where electricity and natural gas are concerned. Deregulation was expected to stimulate competition and thus lower prices of electricity and gas, but costs have actually increased in deregulated markets. Hoteliers are now forced to hire energy consultants and brokers to deal with lengthy buying procedures and financial contracts. Despite these drawbacks, hotels still need to “conserve resources and manage energy costs.” It is rather disappointing to know that energy costs may never decrease to an affordable price; however hoteliers who make a genuine effort to conserve energy despite the cost factor do not go unrecognized. “EnergyStar is a voluntary government/business partnership that offers energy-efficient solutions to conserve resources and protect the environment.” Initially EnergyStar was a labeling system that promoted energy efficient computers and monitors. Now the program has grown to include office equipment, heating/cooling equipment, major appliances, lighting, home electronics, new homes and even hotels. For hotels, the EPA established a rating system, from 1 – 100, which allows hotels to compare their energy usage with others around the country. Going through an extensive process, once a hotel reaches a rating of 75, they are awarded the EnergyStar. Even if hotels do not join EnergyStar, numerous vendors offer products and technology that can effectively help hotels manage their energy costs. Some of the vendors are described below:

Energy Eye: standalone, wireless radio frequency devices; manage room temperature, ventilation and air conditioning; an infrared motion detector identifies movement in the room; a micro door sensor determines if the door has been opened; communicates with the HVAC system

Lodging Technology: infrared-base system that detects body heat accurately to eliminate the chance of false detection picked up by other motion sensors; can have separate inputs for the HVAC system if a balcony door is opened versus the main door; hand-held scanner which allows hotel staff to determine if a room is occupied, without disturbing the guest

Energex Inc.: provide digital thermostats; interface with any HVAC control system; “Web-based room status display as part of real time occupancy reporting”; handheld wands to determine room status without knocking on the door

Reflection:

Because part of my contribution to the SDP project is energy management, I found this article to be very interesting. I was not aware of the extent of high energy costs that hotels face. However, it is great to see that many hotels are taking the opportunity to conserve energy resources either by joining the EnergyStar program or by other control methods. I knew that energy costs were increasing and that guest comfort was a sensitive subject, but I didn’t realize how easily it could be controlled through the energy management systems listed in the article. Of all the vendor products described, the one that surprised me the most was provided by two vendors - the hand-held scanners/wands. They allow hotel staff to determine room-occupancy without touching the door and/or interrupting the guest. Although the product seems fascinating, I do find it a little creepy. What would you think if you walked out of your room to find a hotel employee pointing a wand at your door to see if you were inside? Yes, it may only take a second to determine the status, but to me it is a little weird. I also find the infrared motion detectors, although not the newest technology on the market, to be very helpful in conserving energy when guests are or aren’t in the room. With any luck, all hotels can utilize these systems, distinguish themselves from their competitors and get a return on investment quickly with the purchase of these energy-saving systems.

Blog Assignment # 3

The Electronic Guestroom

Hospitality Upgrade Magazine

Inge, Jon (2006, March). The electronic guestroom. Retrieved
October 8, 2007 from , Web site:
http://www.hospitalityupgrade.com/_magazine/magazine_Detail.asp?ID=56

Summary:
In today’s hospitality industry, hotel guests push for user-friendly technology that not only enhances their experience, but also blends comfort with convenience. Guestroom electronics range from audio/visual entertainment, flat-screen televisions and surround-sound to iPod connections, mini-bars, electronic do-not-disturb indicators and intelligent thermostats. A simple television and stand are no longer acceptable, a soda-filled refrigerator is of the past, and wireless internet is not an amenity, but rather a necessity.

Entertainment in the room now involves pay-per-view movies, games, iPod connections and flat-panel displays. These flat-panel displays are equipped with laptop connections and high-speed internet; however they are usually in awkward positions. Considering that most displays are wall units, hotels can also utilize stand-alone guest workstations. These workstations can be utilized as a display for a laptop or for access to the internet and “hotel-specific” information. Guests could potentially make restaurant reservations, enter wakeup calls, access the concierge, view folio information, create and print documents, etc, all at one workstation.

Phones are also changing their technology to focus on guests. They could be a VoIP unit or just a “multipurpose control” unit that is touch-screen, and allows for access to weather, sports, travel conditions, events and restaurants. For group meetings, display icons could be used to pertain to a particular guest’s group, which could tell them who has arrived, the agenda for a meeting and directions to the conference rooms.

Mini-bars are centrally managed, allowing hotels to record real-time activities, charge the guests folio automatically, check expiration dates of food and drinks, give “drink-mix discounts (e.g. charging a lower price if both gin and tonic water are removed,)” and notifying the staff to only bring certain items needed for restocking instead of wasting time and labor on manual inventory or every room.

In-Room safes are also changing their features, by coming in different shapes, sizes and varieties. They many include a power supply inside to charge laptops and cellular devices; and the usual pin-code entry may be replaced with “fingerprint recognition” or “swiping the guestroom keycard.”

Reflection:
The technologies the article described are certainly one-of-a-kind and attractive to tech-savvy individuals. However, if one guestroom contains all these amenities and technologies, I’d hope they would not confuse the guest. Of course, some of them aren’t even tangible, but many of the devices require some previous knowledge and older guests may not be too eager to use them. Despite the risk of being non-user-friendly, these technologies are a great way for a hotel to gain competitive advantage. They can increase revenues; put guests in full control of their stay with the guest workstations; and improve upon guest satisfaction with the customized room temperatures, safes and more. Overall, I agree with the usage of such technologies in guestrooms. The hotels just have to properly manage their networks, bandwidth use, and convergences between these systems to eliminate overlapping, overspending and more importantly, overwhelming the guest.

Blog Assignment # 2

"Plastic Never Looked So Good"

Hospitality Upgrade Magazine

Kasavana, Michael L. Plastic never looked so good. Retrieved September 28, 2007 from, http://www.hospitalityupgrade.com/_magazine/magazine_Detail.asp?ID=92

One way of implementing the self-service trend that has increased over the past five years in the hospitality industry is through gift cards. Today’s hoteliers and restaurateurs are using POS systems that are capable of supporting electronic cards, magnetic strips, and bar coding authorization. Gift card processors need to be able to interface with the business’ POS system. By interfacing with an already-standing POS system, the processor can provide a website that cardholders could use to track their purchases. And, the service provider can see what types of purchases the card holder made allowing purchase behavior and trends to be analyzed. Another main role of the processor is for security reasons. The company who issued the card can see real-time account activity which can help eliminate fraud and theft. Also, some companies are able to redeem lost gift cards if consumers have the original receipt. Each hotel or restaurant should have a gift card processor that handles not only transactions, account balances, and customer data, but also the activation of new cards, increasing the value of existing cards and redeeming purchases. Most recently, Web-based services entered the hospitality industry allowing gift cards to be bought and sold through “multiple distribution channels.” Through these various channels, whether it be on-site, online or through a third-party, more people are exposed to the brand name and new customers and higher revenues could be a result.

Although gift cards have been in the hospitality industry for a very long time, the fact that companies are just now realizing their gift card processors should be interfaced with their POS system is a little strange. The benefits of interfacing obviously include better customer satisfaction (since customer purchasing trends can be followed) and more personalized services. Customers can go to the establishment, go online or call for help about their accounts, balances and security concerns. Since gift cards are customizable with names, colors and templates, they are no longer considered impersonal gifts and the hospitality industry should realize that the target market for gift cards is huge. With their increased use over the past couple of years, especially through third parties, like Wawa, many companies would be foolish to not have a gift card technology implemented into their systems. By interfacing with their POS systems and using multiple channels to get their name into the market, the companies can fully reach all potential customers. Although this type of technology is a very small aspect of a hotel or restaurants business, it’s the one way a company can definitely increase their competitive advantage.

Blog Assignment # 1

The concept of self-service has matured over the past couple of years, especially in hotels, restaurants, airports and retail outlets. However, according to a survey, 38% of 1,125 consumers would patronize a quick-service restaurant if self-service was available. Unfortunately, only hotels have put an honest effort into providing such services to consumers. There are a handful of quick service restaurants that are jumping into the trend but most are still stuck in old-fashioned ways of dealing with customer service.

The self-service era, according to Mary Carlin, began with ATMs. Now the concept has expanded into airports, retail stores and hotels and it alleviates the pressures that businesses feel from bad customer experiences, via long customer lines. A Florida McDonald’s franchisee, Gary Moulton, has taken advantage of this customer-satisfier and installed self-service kiosks in all six of his McDonald's restaurants. He installed the kiosks in a few restaurants back in 2001 then expanded over the past couple of years to his other four franchise locations. As Moulton explained in the article, customers enjoy being in control, having “ownership.” Thus, more people are waiting to use the kiosk versus being serviced at the counter. This has also increased the restaurant’s customer volume, and in turn has forced staffing numbers to rise as well. More staff is required in the kitchen versus working behind the service counter because more people are enticed to use the kiosk. Upselling is also on the rise, considering the creative layout of the ordering screens. Moulton also says his customers are happier considering the decrease in errors and the efficiency of the overall process.

Another quick-service restaurant in Florida, Whataburger, has implemented self-service kiosks and ICR or Interactive Customer Displays. Whataburger, known for custom preparing burgers to order has a credit card swiping system that remembers the last four orders a customer has purchased and lists them on the ICR screen in front of the customer. Customers can choose a previously ordered burger or customize a new one and then pay for the order with the swipe if desired. No matter what meal they choose, the meal will be delivered to the table the way they like it.

I believe quick-service restaurants which have provided this self-service option are a league ahead of their competition. If a business person has a one-hour lunch break and they are craving a cheeseburger and fries, they want that lunch as fast as possible. Waiting in line is not an option when 15 people are ahead of them – they want convenience at a low cost. This is where self-serve kiosks can fit into their busy schedule and save the hassle of lines and cash payments. I think the Whataburger chain has done an excellent job at reaching out to customers and improving customer satisfaction. By providing a self-service kiosk that remembers the last four custom-made burgers a person has ordered, they are embracing the familiarity factor that customers are searching for. If the business person with the one-hour lunch break goes to the same burger joint once a week and doesn’t want to go through the different screens that ask about burger toppings, they can automatically choose their favorite customized meal, make a payment and be on their way. Convenience at Whataburger is more than 1, 2, 3 process, it’s about providing the customer with an unforgettable experience while also playing the role of quick service – a task not many quick-service restaurants can put on their list of accomplishments.

Carlin, M. L.  (n.d.).  Order and out . Retrieved September 16,

     2007 from ,  Web site:  http://www.htmagazine.com/HT/archive/0705/0705_2.shtml

My First Blog Posting

This is my first blog posting. See everyone in class.