Reporter's Notebook

Blazing a trail with Breadcrumb?

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Groupon made a big announcement today with the publication of a “best practices for daily-deal success” report, a joint project with the National Restaurant Association, but for a longer-term impact on the industry, I’d take a closer look at Groupon’s earlier piece of news from the beginning of the week: the rollout of Breadcrumb POS.

First, the big takeaway from today’s NRA-Groupon announcement is that restaurants that report having a successful experience with a daily deal are far more likely than others to engage with customers using digital platforms and track the effectiveness of their marketing with analytics tools. The report is based on a Groupon-commissioned survey of 513 restaurant operators conducted by Ipsos MediaCT.

Of those who considered themselves successful daily dealers:

• 94 percent engage with customers via social media (versus 75 percent of non-users)

• 77 percent have run more than one daily deal

• 73 percent contact customers via email (versus 59 percent of non-users)

• 79 percent monitor online review sites (versus 68 percent of non-users)

Those stats make complete sense to me. Restaurants who could benefit from that information and best practices hosted on Groupon’s and the NRA’s websites could get better at executing daily deals, as providers like Groupon and LivingSocial continue to work the kinks out and avoid the mass frustration we reported on years ago, when operators dealt with the unintended consequences of torrential deal-related traffic.

But I think the expansion of Breadcrumb, Groupon’s point-of-sale and payment processing system that runs on any in-house tablet computer, is a bigger deal and one that is likely to proliferate.

Much like how every cab driver in Chicago can now accept a credit card by plugging in a Square reader to a smart phone, at-table payment enabled by a Breadcrumb card reader on a tablet should make the restaurant experience a little more accessible and hopefully a little more efficient for the operator.

I got a chance to speak with Mihir Shah, Groupon’s vice president of merchant OS, and he agreed that restaurants would and should replace their cash registers and legacy POS systems with more hand-held systems over the long haul, either with Breadcrumb or with legacy providers that adapt.

“Tablet-based is the way it’s going,” Shah said. “It’s hard to predict timelines, but we’ve been really encouraged with Breadcrumb Pro in the adoption we’ve seen.”

Breadcrumb POS, now available for any restaurant, encompasses a couple things: Breadcrumb Pro, the tablet app that handles POS orders to the kitchen as well as table management and labor scheduling; Breadcrumb Payments, whose swipe fee of 1.8 percent plus 15 cents per transaction rivals most processors; and other back-end goodies like an analytics dashboard, free technical and on-boarding support, and next-day deposits for sales rung up through Breadcrumb.

Groupon’s play here is to get the software into as many restaurants as possible, not necessarily to get those restaurants running daily deals with Breadcrumb, Shah said. Eventually, those offers could get easier to execute, but the point for now is to get restaurants to buy into a suite of mostly software that acts as a local-commerce solution.

“We started with daily deals to get business customers online,” Shah said. “We think we can help businesses interact with their customers in ways they haven’t yet today. We have to put in mission-critical software, which we think is our POS software.”

Shah added that Groupon sees the much lower up-front cost of ownership — a tablet computer costs way less than a proprietary point-of-sale system — as the major advantage the company offers a restaurant, but Groupon also touts the system’s ease of use.

“Our system is in the cloud, with easier real-time reporting and integration with other systems as well,” he said. “In the restaurant industry especially, you have to train employees, and there’s a lot of churn. So having a system that’s easy to use and understand is important. Everyone can use an iPad.”

The question for NRN readers, of course, is how hand-held, tablet-based POS systems can help a restaurant chain, particularly a quick-service or fast-casual brand that lives or dies by its through-put during lunch.

“I absolutely believe, even in the franchise world, that since you can buy an iPad off the shelf at your neighborhood store, it’ll make it easier for a franchisor to standardize equipment [if it goes with Breadcrumb],” Shah said. “We’ve got something that works for table-service restaurants, and now we think a simpler product will work with any QSR or café.”

Right now, Groupon is offering $5,000 in free processing on credit card transactions to entice more people to sign up. If it hooks a large part of the chain restaurant segment, we’ll be keeping an eye on it for sure.

Not that I won’t take advantage of independent restaurants who are early adopters. Fancy, exclusive places like NEXT and The Aviary here in Chicago run Breadcrumb, and the latter is hosting Groupon’s NRA Show party this weekend, where you’ll find your intrepid reporter.

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Reporter's Notebook is NRN's newsroom blog, where our editors give their points of view on news happening in the restaurant business.

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