The Future of Pizza POS Systems

By Karl Martin, CEO, M&FM, Inc. | October 26, 2010

The foodservice industry has been joined at the hip with restaurant point of sale (POS) systems for decades. But for pizza operators, choosing the right POS system and capitalizing on its full profit-driving potential requires a major paradigm shift.

The industry has traditionally looked at POS systems as financial and operational management tools. And, of course, there are critical operational factors in the selection of a POS system for a pizza operation: from effective delivery dispatch and driver management tools to inventory and costing tools that can handle the complexity of dynamically built "create your own" pizzas. But the market leaders have also come to recognize the hidden value in the guest data that their systems hold.

A fully integrated customer database
The pizza market today is embroiled in the most brutal price wars the industry has ever seen. Patrons are bombarded with discount offers, and market share is under attack in this saturated market as growth-oriented chains fight to steal customers from the competition. But despite the intense margin pressure of that discounting, pizza operators with delivery-oriented POS systems have a leg up on other segments of the restaurant market in one critical area: they have a wealth of customer intelligence at their fingertips.

In a delivery and take-out business, collecting guest information is a necessary part of every transaction. That guest data, in a well-maintained POS system, has the marketing power to make a black belt out of a 98-pound weakling. From contact and demographic information to detailed order history and coupon tracking, a specialized pizza POS database provides a powerful marketing engine. By leveraging this guest intelligence, savvy pizza operators can target their marketing and promotional efforts to cut through the noise of discount messages.

A POS system with a customer database at its core gives the pizza operator the tools to mine guest data and drive sales. Using guest data to target marketing and promotional activities to target select customer groups and preferences, operators save money and boost response rates and their customers spend more.

Mobile-friendly ordering
An integrated pizza POS system captures a myriad of data from every order. More than 60 percent of call-in orders are made from cell phone users, and growth trends for cell and smart phone use are off the charts. Selecting a POS system with the architecture to handle guests' multiple phone numbers, e-mail addresses, and order preferences is the key to a marketing dream come true.

Here again, the pizza sector is in a strong position because of its customer demographics: Gen Y and Xers, today's most avid Web and mobile phone users, are also the heaviest users of convenience foods, with pizza a favorite choice.

On top of that, smart phones are driving the next generation of Web ordering applications, and a POS capable of integrating seamlessly with the newest online and mobile ordering solutions is another critical success driver in this competitive market.

Data mining standards
Other restaurant sectors have to work much harder to gather even a small share of the rich guest intelligence available to every pizza delivery operator. But a surprising percentage of pizza operators make little use of it.

To compete with the national chains, savvy pizza operators are implementing professional delivery-oriented POS systems, and using them to target marketing campaigns based on guest habits, preferences, and affinities.

The good news is, leveraging all this data does not require the resources of a national chain. Service-oriented POS suppliers with proven track records in the enterprise pizza space exist. And although any POS system is a capital investment, in the long view, it is an investment with a tremendous payoff. In this economy, operators who fail to mine guest data will see continued erosion of market share. But operators who know their customers and market to them specifically and effectively will see their sales and profits grow.

CEO of southern California marketing company M&FM, Inc., Karl Martin designs franchise development programs for small to medium-sized chains such as Ameci Pizza & Pasta. For more than 25 years, Karl has led foodservice concept repositioning, menu development, and POS selection, and developed national and international franchise systems. Karl can be reached at karl@kdmartin.com.

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