Digital signage providers have been touting the benefits of outdoor digital menu boards for quick-service restaurants for several years — but operators shied away from their high cost and limited warranties. As technology improves and costs go down, the jury is still out on whether the outdoor boards are a passing fad or a soon-to-be necessity.
With a majority of their business generating from the drive-thru line, QSRs aren't likely to compromise any details of that business component, says Scott Koller, executive vice president and COO of Wireless Ronin Technology.
A year ago, Koller was reluctant to predict that outdoor digital boards would have a place in the drive-thru. But with lower costs, better warranty options and higher manufacturing standards that allow the technology to endure harsh weather elements, he has changed his outlook.
"As many restaurants are incorporating digital menu boards inside their stores, we should also expect them to do the same at drive-thrus within the next six to 12 months," he said.
"You used to not be able to find an outdoor digital menu board with more than a one-year warranty. Considering 60 to 80 percent of QSR clientele use the drive-thru, it didn't make sense to invest $50,000 on equipment that was in the elements and that just had a one-year warranty. Now, most options are at least three years and many are five-year warranties; it's a total game-changer."
As the cost of the technology drops, its appeal has increased. Because of this, Amie Driessen, marketing communications specialist, and Chip Willcutt, copywriter/marketing assistant at WAND Corp., believe the move to digital isn't about "if," but "when," comparing it to the Apple IIe computer, which sold for more than $2,000 new in 1983.
"Today, a computer can be purchased for under $1,000 with 62,500 times more bytes of RAM," Wilcutt said. "The future is for optimists with a firm grasp on how fast technology is moving."
Texas Digital Systems has already incorporated outdoor digital menu boards into their product offering.
"We see extending digital menu boards to the outdoors as a natural progression of the technology," said marketing manager Melissa Lewis. "Whether used as a pre-sale tool or for the actual menu board, the technology of digital signage can be very powerful for any QSR brand, regardless of size."
The lower cost of entry also means operators can now see a better return on investment. Koller said a handful of QSRs – especially those with more drive-thru business – are already seeing favorable ROIs.
"Most customers will see the outdoor menu, not the indoor menu, and with costs coming down on this technology, it'll be a big payback. Most folks I've been working with are getting back their investment within 20 to 30 months," Koller said.
WAND Corp. says it has customers obtaining ROIs within nine to 18 months and, in some instances, five to seven months.
Additional benefits to outdoor digital menus include appealing, bright colors and motion on high-definition screens. According to Wand Corp., they attract seven to 10 times the customer attention of static boards and can also deliver a wider gamut of information, including weather conditions and local events.
"(Digital) boards are seen as a form of entertainment, adding to customers' overall experience and satisfaction," Driessen said.
Digital board providers also have long espoused how expeditiously menus can be updated, whether for day-part items, limited-time offers or special promotions. Enterprise-level controls allow for instant updates while eliminating the cost of printing and shipping for static boards as well as the labor for manual change outs.
With the passage of legislation requiring nutritional menu labeling, WAND Corp. and other providers have promoted the technology's ability to easily add calorie counts. With QSR chains facing the certainty of having to update tens of thousands of static menu boards to add the information, the benefits are beginning to outweigh the costs of implementing new digital equipment already positioned to deploy the information.
Even before the new law passed, WAND Corp. saw heightened interest in the technology. Its digital menu board business increased by almost 40 percent in the past six months and the company predicts more than 150,000 restaurants will adopt the technology within two years, Driessen said. Most of those installations — 82 percent — have been for indoor digital menu boards, but the company is encouraged by the growing number of outdoor digital orders.
"We expect these numbers to skyrocket due to the recent health care reform act, andâ€¦the new law doesn't excuse the drive-thru," she said.
| |Although digital menu board technology is still too young to generate many concrete statistics, QSRs are well aware of its benefits moving forward. Burger King, for example, is recommending — but not mandating — that all new 20/20 stores incorporate the technology. (See more about the 20/20 design on QSRweb.com.) ã€€ "The aesthetics, the flexibility, and the modern look of the digital menu boards complement the 20/20 restaurant image," said Hector Munoz, senior director of retail image at Burger King Corp.
That image consistency translates outdoors, as well, and Burger King is exploring a few drive-thru options. This may take a bit longer, since the technology is still fledgling and somewhat cost prohibitive, but it is certainly on the map.
"The digital/LCD screens showcase the appeal of our menu items via animation, which is inherently more attention-getting. More importantly, they allow us the flexibility to target the messages by day-part," Munoz said. "While cost is certainly a challenge, we are working with our teams to ensure our operators realize the best return possible."
Not everyone, however, is convinced this technology will become a necessity at drive-thrus. Ken Neeld, president and CEO of Delphi Display Systems Inc., believes order confirmation boards – now mainstream and in use by a majority of QSR brands – are plenty sufficient. Their primary role is to improve accuracy and speed of service by ensuring customers' orders are entered correctly.
Neeld admits digital technology will become adopted at a higher rate as costs continue to fall, but thinks the process will entail a combination of systems, rather than a complete digital transformation.
"We believe order confirmation capability will be integrated into digital menu boards. By leveraging one hardware platform for both functions, the requisite ROI will be more achievable across a range of QSR brands and business models," Neeld said.
There are a several factors that will likely prevent widespread adoption of outdoor digital technology. First there is the QSR industry's traditional slowness in adopting new technology and the fact that many QSR brands have simple menus for which the less-expensive static boards work adequately. Additionally, order confirmation boards are already in use by a majority of brands, and there are still some questions about digital's reliability, Neeld said.
"It must be designed with redundancy, so if a digital screen goes down the restaurant can continue to operate until it is repaired," Neeld said. "It's important to understand the underlying technology limitations, and also capabilities of the supplier."
A combined product is the more likely immediate future Neeld sees:
"Combining order confirmation and digital menu board technologies could help increase the adoption of the technology for large and small QSR brands."
Texas Digital, which provides both digital menu boards and order confirmation systems, agrees that a combined product will be beneficial to QSR owners. In fact, they have combined their VitalCAST digital menu board software with the technology of their AccuVIEW order confirmation solution to display both types of information on one LCD screen.
"We work closely with our customers to ensure that our product development fits their needs," Lewis said. "Because of the importance of drive-thru traffic to our customers, our technology is following the trend to meet the need."
Alicia Kelso has been a professional journalist for 15 years. Her work with QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.