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Could Apple Reinvent Restaurant Reservations and Payment?

OpenTable reinvented the restaurant reservation dining scene 16 years ago and more recently introduced mobile payments into the mix. But is Apple next up to reinvent the dining experience for hungry people and restaurateurs? MPD CEO Karen Webster shares two separate but related data points that might give you a peek into that future.

In the “how cool is this” category comes two separate Apple and iBeacons data-points that are pretty interesting as standalone applications. But when mashed up, they could totally reinvent the restaurant experience for diners and restaurant operators.

After having just competed the OpenTable case for PYMNTS Summer School, my head is all wrapped around restaurants and reservations and mobile and the innovation that can come from when those things are all mashed together. I came across two separate but related Apple and iBeacon datapoints in the restaurant space. As standalone apps, they are pretty cool. But if (or when) mashed up, they could totally reinvent the restaurant experience for diners and restaurant operators.

See if you agree.

It is said that necessity is the mother of all invention. In the case of Christian Mook, the owner of 5 fine-dining restaurants in Frankfurt, the necessity was creating loyalty and preference for his restaurant patrons. The invention?  iBeacons and iPhones and an app.

Mook’s restaurants must attract a pretty hip and happening crowd – Maserati advertises on his landing page.  Quite naturally, Mook wanted to hang onto these storied patrons and give them a reason to spend more. So, he hired a developer to create “an app for that.”

Using iBeacon technology, Mook’s app detects when people enter his restaurant (today only one – if this works, he’ll expand to all 5). As you know, iBeacon’s leverage low-energy Bluetooth technology to interact with an app installed on a user’s device. In this case, it can detect a diner inside one of Mook’s restaurants and can isolate her position within 5 to 10 inches. It’s worth noting Mook’s choice of  iBeacons, obviously because his well-heeled customer base totes iPhones. iPhone customers, as we have written about a lot on PYMNTS, is one that, on average, is more affluent and outspends its Android counterparts on most all purchases.

Once in the restaurant, Mook’s app tracks how much time the beautiful people spend at their tables. The more time at the table, Mook hypothesizes, the more money they must be spending eating and drinking his yummy fare. The more they do either or both, the more goodies they are eligible to receive. For Mook’s customers, that means the red carpet treatment: free drinks, fast-track entrance, higher placement on wait lists, etc. And since entrees at Mook’s restaurants run between $26 and $40, it probably won’t take very long for guests to eat and drink their way from “Guest” to “Addicted Connoisseur” status (two of Mook’s reward designations).

Version two of the app, Mook, says, will take this capability a step (or three) further and track things like where people are in his restaurants (bar, dance floor, etc.), what’s been ordered and how much people pay. It seems like it might be only a short hop, tap or wave to enabling payments.

Data point two is something Apple did all by itself rather quietly in December of 2013. When you read this, you’ll wonder if Mook read it, too. They filed a patent for a restaurant reservations system. Except that this patent, not surprisingly, reinvents the entire restaurant reservations experience.

Here’s how it works.

Restaurants become a point of interest (although, according to the filing, so can a movie theatre, museum, amusement park, etc.). The criterion for a point of interest is that a consumer has to wait in line to use the services of that establishment.

A customer is granted permission to use a restaurant (maybe by an iBeacon and via an app?) by the restaurant. Once that happens, the consumer can interact using a “portable electronic device” (aka smartphone, smart watch) with that restaurant to order things, receive information, and receive a bill (and presumably pay, although this was not mentioned specifically in the filing). The patent goes on to say that said “portable electronic device” can also be used to send or share personal information to the restaurant, for example, things related to food preferences, allergies, seating preferences, etc.

This new restaurant/diner connection now enables the restaurant to determine how long a diner will be at their table, all based on when they arrived and what they ordered. So a party of four that orders a bottle of wine + app + entrée + dessert + after dinner drinks will obviously take longer to finish up than a party of two with an entrée, no drinks and no dessert. This capability helps to build an accurate wait list and reservations’ inventory since it’s driven by real time information based on precisely what’s happening inside of a restaurant. Changes in inventory can be communicated to any potential diners in real time via their “portable electronic devices.”  Hungry would-be-diners can also search for a restaurant that has the type of food they like, price point or rating, as well as availability that suits their schedule and location.

What’s particularly interesting about this for both restaurants and diners is that location and proximity really matter to the mobile-toting consumer. Mobile users are also those who search and then purchase in high numbers, in fact, according to Nielsen’s latest research, two-thirds of all mobile users buy the thing that they were searching for the same day. That rate is even higher for those looking for a place to eat: 80 percent of those who are looking for a place with availability make a decision to book a reservation within the same day, with more than half of looking to complete their “purchase” within an hour.

Apple’s patent capability, it appears, is set out to sort of build the restaurant version of a highway congestion map so that a diner can make a decision to book or not or take a chance and show up based on real information about how “congested” a restaurant is when they want to eat.  For the restaurant, they never again have to put their would-be diners thru the interminable, “it’ll be just another 5 minutes” 5 times in a row, which accomplishes nothing other than to assure that the evening in that restaurant gets off on the wrong footing for both parties

One can only imagine how a scheme like this could give players like OpenTable a run for its money, literally. OpenTable’s revenue model makes most of its money (like two-thirds of it) when consumers book an open table. Over the years, restaurant owners have grumbled that OpenTable is a “tax” on their bottom line. Their claim is that OpenTable brings them very little new business and charging them to serve a customer that’s already theirs dings their margin.  A model like what Apple has proposed could be rooted in a very different business proposition, perhaps one based on advertising or promotions, which would link revenue more directly to consumption and even customer incrementality.

Now, Apple, as a lot of companies, files patents for things that they might never develop but are neat ideas (have you seen their patent for the shake-to-print-application?) and this could be but one of them. But if they ever decide to pursue a “DiningKit” in the same way that they have the HealthKit or HomeKit, one can only bet that restaurants and diners both would beat a path to their doors. From the sounds of it, they wouldn’t have to wait that long to enter it, either.

 

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