Is Wendy’s Move to Kiosks the Start of a Larger Wave of Automation?

BY:

May 23, 2016

Business owners interested in automating business processes to reduce overhead and increase efficiencies will want to take note of what the Wendy’s restaurant chain is doing. The fast-food giant announced that during the latter half of 2016, it will deploy self-service kiosks across its more than 6,000 restaurants. It is not the first fast-food restaurant to do this; McDonald’s has been testing the waters by deploying self-service kiosks in some of their restaurants, but Wendy’s is the first to do it on such a grand scale.

Wendy's Kiosk

Of course, any project like this will result in an initial outlay for expenses related to the equipment and technology itself, in addition to costs associated with the rollout of the kiosks. However, the move is expected to result in lower overhead over time, and is Wendy’s direct answer to combat mandated minimum wage hikes. The ultimate goal, according to Wendy’s president, Todd Penegor, is to find efficiencies that will allow the chain to deliver service in a new way but without raising prices for customers.

And that is going to be a challenge faced by many other small and mid-sized business owners over the coming years. Under California’s “Fair Wage Act of 2016,” minimum wage in that state is now $10.00/hour and will go up to $15.00/hour. California is just the first of many states headed in that direction; several others, including New York and New Jersey, are on track to reach a $15.00/hour minimum wage too.

With rising wages, business owners are faced with the tough decision of figuring out where to cut expenses in other areas to make up for the increased payroll expense. Wendy’s move to automation is addressing that challenge head-on.

Will automated food kiosks ultimately replace all human customer service workers in restaurants and retail shops? It’s not likely, but we are likely to see an increase in their use. Self-checkout lanes have been in use for many years at grocery stores and retail outlets like Walmart and Target; however, they have not replaced the need for human cashiers, and they still need human interaction periodically to clear errors or just to help navigate the tool.

It is too early to say whether Wendy’s decision to automate customer service will be positive or negative, but it is likely that this is just the first example of a business implementing automation on this type of scale.

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