Speed At The POS Is A Game Changer For Stadiums

What does it take to go from powering concessions ordering at a Minor League Baseball stadium in Texas to doing the same for almost half of the largest sporting venues in the MLB, NBA, NFL and NHL?

Sports concessions is one of the only businesses in which managers must staff to peak and not the average. Really, every element of a stadium experience is architected to withstand the maximum spectator influx: the number of entrances, the network firewall, the point of sale (POS) system capacity and the ability of food and beverage providers to prepare those concessions, among other details.

All to withstand the deluge of customers who all want food and drink during the same 15-minute windows.

“The name of the game in physical payments, especially for food and beverage, is speed,” Bypass Mobile CEO and co-founder Brandon Lloyd told Webster in a recent interview.

Lloyd has spent his career at the nexus of payments and software. Before co-founding Bypass, he helped build a closed-loop, stored-value product for higher education, which was ultimately sold to food services and facility management company Sodexo.

It was during his time collaborating with Sodexo that Lloyd reached a key industry insight: Sports and entertainment consistently faced the highest peak-load challenge, yet it was operating with the most antiquated technology.

By leveraging inadequate technology to handle those peaks, “We were leaving a lot of money on the table,” Lloyd said. Payments innovations like Square work well for smaller organizations, but at a large scale, something more was needed.

Lloyd recognized that “the market was behind and that there was a way to create a lot of value quickly, by improving speed”—and so he selected the sports and entertainment industry as the first target market for Bypass.

The Game Day Challenge

Sports do booming business while they’re in session, but that’s not 365 days per year. Teams play on select days throughout the season for whatever sport the stadium hosts — a shorter season for football, longer for baseball and somewhere in between for basketball and hockey.

Furthermore, even during the regular sports season, teams don’t always play at home, so there are weeks when the stadium is dark. Those dark days are becoming fewer in number, though, as outside groups and organizations leverage the space for concerts and other major entertainment events.

Those mega-performances present all the same POS needs and challenges that concessionaires must meet on game day — and Lloyd said the goal is to reach fewer than 25 “dark days” a year in the busiest venues.

When people are there, the venue is operating with incredible intensity, running 100 to 300 food and drink outlets at the same time — plus retail outlets to sell team-branded merchandise, parking, fine dining and catering — for that four- to six-hour window.

And all those fans want their food and drinks at the same time, so they don’t miss a crucial play. That means most of the time, concessionaires have a few 15-minute windows to rake in the day’s profits — and any business they don’t capture in those windows is money left on the table.

Like any retailer, according to Lloyd, stadium managers and concessionaires can be tempted to chase after the latest and greatest innovation, but he believes the wiser investment is in technologies that deliver value that can be projected and measured.

Most fans aren’t going to games and concerts every week or even every month. That means, among other things, stadiums need a different technology strategy than Starbucks or McDonald’s. At the same time, there are innovations happening around transaction time that will extract more value from peak rushes in the business, and those innovations apply to many markets.

The Adoption Dilemma

POS had been a hardware game for so long that many venues were still treating it like that when Bypass approached them with its software solution. These legacy systems at many stadiums have been around for 10 or more years. In that environment, you’d think the competition would be easy, but you’d be wrong.

Lloyd said the biggest challenge in competing with these terminals from a bygone era isn’t developing better technology, since that’s almost a given, but rather convincing organizations to focus manically on the one to three changes that will deliver the most business and guest value.

Lloyd and his team work with operators to identify the highest return endeavors. At times, this means prioritizing the “blocking and tackling” ahead of the latest trend— which may or may not be delivering demonstrable value in this segment of the market.

Luckily, Bypass found most large venues were ready for a change. According to Lloyd, after trying to make inroads as a mobile app for three years, he and the team were also ready.

Customers were asking Bypass to create a mobile POS (mPOS) solution — a line buster — and out of frustration in trying to integrate with legacy POS products, Lloyd said the time was right for Bypass to pivot out of the mobile app space and into the POS space. The company released its first mPOS in 2013, and that’s when adoption really picked up.

“There was a lot of pent-up demand for [an mPOS] product that could really be a game-changer for the industry [in] achieving its objectives,” Lloyd said. “There hadn’t been a lot of investment in the space.”

Changing Times, Changing Trends

It’s typical for a single concessionaire to run all food and beverage within a stadium, Lloyd noted. However, teams and venues are increasingly involved in selecting point-of-sale and other technologies that the fan is exposed to on event day.

Lloyd says the reason for that is data. The ticketing system and customer relationship management systems may not touch every customer every game, but the POS very nearly does. That data can help teams sell tickets and get sponsorships, so they want to own that system.

Another emerging trend is enabling customers to serve themselves. While mobile ordering has yet to reach material adoption levels in the sports entertainment space, Lloyd said Bypass has had success experimenting with kiosks.

He admitted kiosks may seem like a counterintuitive solution when every fan is holding a smartphone, but they serve as a visual reminder of self-service options. Customers don’t feel like they’re waiting at a kiosk because they’re engaged in the action of ordering.

Where Will Bypass Go Next?

Lloyd said Bypass’ goal is to develop customer partners versus signing up customers in a traditional supplier-vendor model.

“If a customer wants to implement a POS to affect a business outcome, that means business process evolution,” Lloyd said. “If a prospect, even a high-profile one, is looking for status quo or to implement a fragile architecture to accommodate legacy processes, we are more likely to pass because we do not believe success is a likely outcome.”

Stadiums are indeed paying attention to Bypass, as the company has achieved 41 percent market share in some aspect of stadium concessions across the MiLB, MLB, NFL, NBA and NHL. The Bypass team enjoys the chance to work with customers who share their vision of building a strong POS foundation, one that delivers the speed and flexibility to accommodate new POS devices and experiences.

“Our business in sports is all about growing intelligently, not aggressively,” Lloyd said. Teams and venues understand all the reasons to upgrade, but the plan to replace mission-critical technology must balance business outcomes, fan experience and risk. In a big way, Bypass can be viewed as a bellwether for the industry, and its success is indicative of a seismic shift that will affect commerce within and beyond sports and entertainment.