Inside Big Boy's use of cloud payments

Big Boy

The number of restaurants in the U.S. is shrinking, pushing a wave of creativity as dining establishments change everything from kitchen design to ordering and payment to reach new groups of customers. 

The Big Boy Restaurant Group, which operates Bob's Big Boy restaurants, recently hired Oracle, and will use Oracle's MICROS Cloud Point of Sale and Payment Cloud Service to enable a series of upgrades. The cloud will drive a sea change at Big Boy, an 86-year old chain whose familiar mascot pervades pop culture, including appearances in comic books, The Simpsons and Austin Powers. Similar to bank branches, traditional sit-down restaurants are also wrestling with how to economically operate in an age of low-touch digital customer service. 

"We're diversifying from serving our greatest generation to a focus on families and teens," said Matthew Gilmore, information technology director for the Big Boy Restaurant Group.  "They like to pay digitally and have a digital experience."

Big Boy is moving toward a service model that more closely resembles fast food, to increase diner volume and to reach a younger demographic as the chain changes its marketing approach. "That means enabling things like electronic tipping and mobile payment," Gilmore said. 

Like channel-specific technology stacks in banking, food service had its own technology silos historically, according to Bob Meara, a senior analyst in the banking practice at Celent. 

This meant point-of-sale systems were their "own beast" and had to be upgraded to interface properly with payment terminals, much like teller automation software running on a teller desktop had to interface with branch peripherals such as check scanners, receipt printers, cash counters and others.

The restaurant chain plans to use analytics from mobile orders and payments to drive changes in table service, inventory management and incentive marketing. The chain didn't release numbers, but said the addition of contactless and mobile payments would reduce the cost of traditional payment processing. 

Other planned upgrades include integrations with delivery platforms such as GrubHub and DoorDash, self-checkout kiosks, automated drive-thru and upgrades to Big Boy's locations that rely heavily on pick-up and don't have a large dining room. 

"The 25-and-under group is looking for lower human interaction and faster service," Gilmore said. "You'll have a person bring your food but will order and pay digitally." 

About 90 Big Boy locations are live or are in the midst of deployment.  "The cloud allows us to get the terminals up and ready without having to heavily involve people in the upgrade," Gilmore said. 

The entire restaurant industry is dealing with challenges borne from the pandemic, which included forced closures and other restrictions; supply chain shortages and now inflation. There were about 631,000 restaurants in the U.S. at the end of 2022, according to CNN, adding that's 72,000 fewer than the 703,000 restaurants at the end of 2019. Restaurant spending has rebounded; Mastercard reports restaurant spending increased more than 14% year-over-year in the card brand's recent Spending Pulse survey. But quick-service chains are investing in new store designs to accommodate consumers spending less time in restaurants, adding to pressure on more traditional eateries.  

Quick-service chains have also traditionally been quick to add new technology. Starbucks had an iPhone app as early as 2009, and reached critical mass for its mobile ordering, payment and incentive marketing usage much earlier than other retailers. And during the early days of the pandemic, Chipotle debuted a restaurant design with no dining room or service line, yet with visibility into the kitchen and lobby. 

"A lot of people are constrained for time in ways they never were before," Gilmore said.

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The evolution in restaurant design to accommodate mobile and other digital transactions bears some resemblance to the changes financial institutions are making to branch layouts. 

Like restaurants, banks are trying to respond to consumers who are using mobile apps for other purposes and have become accustomed to advanced technology. Workers Credit Union, for example, has deployed holograms to greet visitors to branches. And banks such as Regions have turned to portable branches to address the changing demand for in-person service. 

Cloud technology can ease upgrades for these systems by hosting the underlying technology and delivering it remotely to a network of geographically dispersed locations through a software upgrade. While migrating to the cloud does not solve all connectivity issues, communications and interoperability standards are farther along in general retail than in retail banking, Meara said.  

"Migrating to hardware-agnostic standards and away from proprietary device drivers and messaging protocols is a key prerequisite for agility and innovation in both banking and retail," Meara said. "From a customer journey orchestration and servicing perspective, untethering key systems from the desktop has been huge."

At Chick-Fil-A, for example, a 2022 upgrade created a bypass express lane at drive-thrus for consumers using mobile devices. Patrons use an app to place an order and pay, then scan a QR code to check in at a Chick-Fil-A location. The consumer then uses the dedicated drive-thru to pick up their order. 

"This offers kitchen staff much-needed visibility into orders in time to fulfill them by the time customers pay for their dinner," Meara said.  "Just as banks are migrating to displays in the branch, quick serve restaurants are increasingly displaying menu items using a digital display, allowing quick price and menu changes cost effectively."