Apple apply for “restaurant patent”, what does this mean?
According to Patently Apple ,”the US Patent & Trademark Office published a patent application from Apple that reveals a new ordering and reservation system that could work with various Apple iDevices. Although the system can be modified to be apply to movie theatres, repair services, museums and the like, Apple’s main focus is on a restaurant market application ”
The background says, ” Restaurants have traditionally used similar techniques for processing customer requests. For example, customer requests to order food generally are communicated to a waiter, who in turn communicates the order to the kitchen staff. Once the kitchen staff has created the dish, the waiter delivers the food to the table for the customer to enjoy. Similarly, restaurant reservations are created by calling the restaurant and speaking to hostess. If a customer arrives at the restaurant without first making a reservation and no tables are available, the hostess places the customer on a waiting list. The hostess can combine the phone reservation requests with the walk-in requests in a single wait list and satisfy the requests in a particular order. The hostess or the waiter can also handle to-go orders over the phone or in person by taking the order, communicating the order to the kitchen, and delivering the food to the customer once the order has been made.
Traditional techniques, however, do have their shortcomings. For instance, ordering is completely dependent on the waiter’s availability. A busy waitress may not get around to a customer who is ready to order for five or ten minutes. This idle time is magnified if the waitress is busy and unable to provide menus to the customer for five or ten minutes after the customer has been seated. Other shortcomings include the management of the wait list. During periods of high activity, a hostess may have problems managing the wait list given the number of reservation requests over the phone and in person. Thus, there is a need for improved techniques for processing restaurant orders and reservations.”
The sections of the patent paper are headed, “Wait List management”, “Ordering system”, “Remote Requests”, “Notifications”.
The patent was filed by Sarin S Mehta, his LinkedIn profile lists him as a “Wireless Coexistence Engineer” .
There are several things going on here. Some seem more likely to succeed than others but given Apple’s market penetration and the likelihood that they might open things up to outside developers, all of them could have quite important effects in the restaurant marketplace.
The patent does focus on restaurants but mentions other potential business areas.
The idea involves, amongst other things:
1) restaurants posting availability that consumers can search
2) restaurants posting information about their waitlists
3) restaurants having a way of receiving information about diners’ desires and dietary preferences when the diner is in the restaurant
4) restaurants acting upon information about how quickly or slowly diners are consuming their meal
5) diners seeing and interacting with restaurant information, eg menus and wine lists
Each of these affects different types of businesses working with restaurants:
1) affects companies like OpenTable.com, LiveBookings.com and my own, 5pm.co.uk / simpleERB.com
2) affects companies like NoWaitApp.com, (though it should be noted that waitlists are not a common occurrence in Europe, most Europeans find the idea quite odd)
3) Alibaba.com lists 2517 products under the search term, “Wireless waiter call system”. Many EPOS systems will offer this as a module.
4) “Kitchen management systems” are integrated into many EPOS systems. These display the status of each order on a display in the kitchen and can provide timers that, for example, tell the grill chef to put two well done steaks on now and four mediums in 5 minutes time.
5) Most high end EPOS systems have been offering handheld ordering devices for many years. I remember being one of the first users in Europe of “Remanco” handheld devices in my restaurant. (At $1500 a pop!) There is a plethora of companies offering eMenus on iPads and tablets.
All of these markets could be disrupted by Apple’s patent, if it were to be granted, (and many people would have an interest in opposing the grant of the patent).
The likely effects?
1) OpenTable’s sky high valuation rests on the possibility that it can continue to extend its “walled garden” where it makes high profits from being the “go to” place for diners to make a global, (emphasis on global), search of availability in restaurants in a particular area.
This has led to accusations that OpenTable is making monopoly profits at the expense of restaurants. An OpenTable monopoly is handy for consumers, with one search on their smartphones they can find most of the availability. It is less good for restaurateurs who find that local regulars who would have previously booked by phone, at low cost to the restaurant, are booking via the OpenTable site at $1 per head.
What Apple needs for this to work is a signal from restaurants that they have tables available. They need the supply side of the equation, “inventory”. This is not easy to get from restaurants in a reliable way. If Apple offered an inventory listing they would have to find some low friction way for restaurants to add and manage their availability. It would obviously not be in OpenTable’s interest to allow this “booking” to go straight into the OT Electronic Reservation Book, (ERB), unless they were getting a financial cut. Since the Apple iPad replaces OpenTable’s lucrative dedicated ERB business, this seems unlikely. Restaurants would need another ERB and this is where Apple can sell iPads. Companies like SeatMe and simpleERB, sell, (or give away), ERB’s that run on iPads. This would stimulate demand for iPads and be a win for “Apple In The Enterprise”.
2) “Waitlist management”. NoWaitApp.com has done a great job of addressing this pain point for restaurants in the US. Again this runs on iPads. It would be a worry for NoWaitApp if “Apple’s Waitlist” became the default waitlist for restaurants to be on. But this is by no means a given, again it would require buy in from restaurants.
3) “Diner desires”. Matching diners’ desires and peculiarities is something that is done by systems that provide CRM for restaurants. Again the dominant player in the US is OpenTable. A guest’s history is stored in the OpenTable hardware fulfilling the function of a “good maitre d’ “.
If Apple can get you to store your preferences on your own iPhone then this is potentially much more useful as the restaurant can not only see its information about you, it can see, if you let it, what your interactions have been at other restaurants. For example, if you have told restaurant A that you like your Bordeaux red wine at 17 degrees then restaurant B can see this even though you have never visited restaurant B before. (Note: OpenTable has just, Dec 16 2013 bought QuickCue which says that it aims “to open and sustain a meaningful dialogue between the guest and restaurant.”)
4) Kitchen management systems are used in high volume establishments. They are integrated into the EPOS system and the pieces of kit that live in the kitchen are bomb proof items designed to withstand getting knives hurled at them by stressed out chefs. Apple’s promo video, “ww.apple.com/ipad/life-on-ipad/” momentarily shows (about 40 secs in) an iPad in a restaurant kitchen. I think it would have to be a relatively low volume kitchen for an iPad to be a sensible option, but it does open up kitchen management to many more restaurants. I know several of our customers in small restaurants who let the chefs see what is going on by putting a tablet with our ERB in the kitchen. The companies that offer these pro systems might benefit from opening up their api’s to developers wanting to integrate with Apple. I don’t think their core business is under much threat from this patent application. Unless of course Apple is set to introduce robust “Enterprise” devices. This could be a “Tim Cook thing”.
5) Equals BYOD, “Bring your own device”.
Companies like Orderman.com produce rugged handheld ordering devices which integrate with the EPOS. But customers are all bringing a much more powerful device into the restaurant. Why not let them order from these devices? This doesn’t need Apple genius here. A webpage with a menu from which the customer can order and a wifi connection does the trick! However, if it is the case that when I am in Restaurant A I always order the grilled squid starter then having this in my preferences helps. I may always order a martini in every restaurant I go into. I may want to order my starter from the cab on the way.This doesn’t have to be an all or one solution. You can still have waiters taking orders but customers inputting some requests on their devices. A good analogy here is self service checkouts in supermarkets. The self service checkouts are gradually increasing their penetration but there are still plenty of check out people. It may take a generation for human order taking devices, ie “waiters” to become redundant in the majority of restaurants. Systems like “Orderman” would need to open themselves up to the api to get full benefit from it.
To sum up? Let’s look at a scenario that we could call “Apple Restaurant Max”
I have set up my preferences in my phone for what my requirements are : a quiet table, my red wine lightly chilled, non intrusive waiters, shell fish allergy.
I search for restaurants with availability near me, I get to see availability, not just what is on closed systems like OpenTable.com or LiveBookings.com or 5pm.co.uk, (because Apple have somehow persuaded restaurants to put up availability), and I even get to see tables held back from OpenTable by restaurants.
I order from the cab on the way and as the restaurant knows my ETA from GPS positioning on my phone, the kitchen has my starter ready to go the moment I walk in. My Martini, shaken, the way I like it, not stirred, although I have never been to this restaurant before, is on the table.
When I want a second one, I don’t have to call a waiter, I just order another with a few taps on my iPhone. The restaurant not only sees my arrival time on its iPad, but all my preferences as well. My waitress can see them on her iPhone. The kitchen knows that I am allergic to shellfish and the seafood chef takes extra care to wash his knives before preparing my swordfish. Thanks to Apple iBeacons placed round the restaurant, the restaurant knows my position in the restaurant to centimetre position so I don’t even need to enter a table number. I give the restaurant feedback on each dish as I eat it and post socially, (via an Apple gateway), taking a picture of the great dessert. I pay via my iTunes account and the restaurant notes this on its EPOS system running on another iPad. (Update: 31 Dec 2013 , thanks to Mark Rupert Read for this scenario: ” Imagine paying via your Apple iWatch, the same iWatch telling the restaurant host you are standing in front of the host desk waiting to be seated, or indeed your table location being sent to the watch so you could seat yourself…”).
Through all this, Apple sells more devices. I am not going to second guess what the US patent examiner is going to allow but you can see that most things can be done on non Apple platforms as well.
Some companies will suffer but there are probably as many opportunities for most of them as there are threats. OpenTable might be different. As the company with biggest market share it might suffer if Apple can open up the restaurant reservation market.
It’s a big if.
Update: good piece on Apple’s general retail plans here
Second update: turns out customers not so keen on in store tracking
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