Restaurant POS Software
BuyerView | 2014

At Software Advice, we speak to prospective buyers from thousands of companies each year who are shopping for new restaurant point-of-sale (POS) software. These conversations give us unrivaled insight into the systems the buyers are currently using, their reasons for seeking new software, what features they require and more.

To learn more, we analyzed a random sample of 385 of these recent interactions. This report outlines our findings.

Key Findings:

  1. More than half of the buyers contacting us are not replacing existing software, but are buying restaurant POS software for the first time.
  2.  
  3. There is a correlation between restaurant size and integration requirements, with larger establishments preferring integrated suites.
  4.  
  5. Many buyers are interested in new industry trends, such as the increasing integration of tablets into restaurant operations.

Most Buyers Seek Upgrade From Manual Methods

Fifty-five percent of the buyers we spoke with were not currently using any restaurant management or point-of-sale software. The methods they had in place included hand-written paper tickets and traditional, manual cash registers.

Prospective Buyers’ Current Methods
Methods

Meanwhile, 45 percent of buyers were unhappy with their existing restaurant software and looking to replace it. The applications being replaced were distributed evenly between most major restaurant software vendors. They included Micros, Aldelo, Digital Dining and others.

Organization, Efficiency Primary Purchasing Goals

The restaurant industry is known for being very fast-paced. It should come as no surprise that management prioritizes organization and efficiency, and that these are the top priorities for restaurant managers seeking restaurant software.

Top Reasons for First-Time Software Purchases

Reasons for purchasing

Organization is often mentioned in conjunction with inventory and sales tracking: For example, one buyer sought “better organization with inventory,” and another needed “a system that can help [us] stay more organized with tracking inventory and sales reporting.”

Efficiency is often brought up with restaurant workflow processes in mind. For example, one buyer said they were “mainly looking for a dependable program that can efficiently communicate, from front-of-house orders to back-of-house, [and that includes] sales-tracking capabilities.”

Additionally, buyers’ third most cited reason for needing new software is that they’re either opening an entirely new restaurant, or they’re adding a location to an existing franchise. That this is a frequently cited reason is unsurprising, given the growth of the restaurant industry as a whole:

Industry growth

Most Buyers Seeking Integrated Suites

Restaurant POS software can either focus on a single, very specific task, such as order-taking, or it can cover the whole gamut of restaurant operations: from guest reservations to business accounting. The first type is categorized as “best-of-breed” software, and the second is called “integrated suite” software. Restaurant buyers prefer integrated suites by a 22 percent margin.

Integration Requirements

Integration requirements

The restaurants we spoke with that were seeking best-of-breed products had an average of 10 employees. They generally emphasized simplicity and ease-of-use as high priorities. Specifically, they made requests such as:

  • “We need just a basic POS.”
  • “We mainly want a ‘no-frills’ sales tracking and reporting system.”
  • “We’re just looking for a simple system to handle our transactions and sales reporting.”

The restaurant buyers seeking integrated-suite software had an average of 16 employees. They were looking for software with a broader set of features, usually encompassing accounting and employee management tools. They made specific requests, such as:

  • “In addition to a point-of-sale system, we would like credit card processing, employee clocking and payroll services.”
  • “We’d like a point-of-sale system with inventory management, QuickBooks integration, reporting, credit card processing and the ability to have a loyalty program.”
  • “[We need] a system that can manage point-of-sale, employee login, credit card processing, sales reporting, tab tracking [and] receipt printing, and [that has] a user-friendly interface.”

Inventory Management Is Top-Requested Feature

After inventory management (48 percent) and sales tracking (34 percent), the third most frequently requested feature—mentioned by 23 percent of restaurant buyers—is employee scheduling and clocking management. This feature is frequently included in integrated-suite software packages.

Top-Requested Restaurant POS Software Features

Requested features

Tablet compatibility is the fourth most requested feature, with many restaurants singling out iPads as their tablet of choice. However, tablet compatibility was rarely identified as a mandatory requirement. Rather, most said it was something that “would be nice to have” or that they would like to learn more about, but that it wasn’t absolutely necessary.

This curiosity mirrors a trend we see in the restaurant industry at large. Across the nation, restaurants are experimenting with tablets, using them to replace menus and even replace waitstaff in the ordering process. Early reports suggest that tablet use could even lead to more spending per table.

Most Buy for One Location, Within Three Months

Of the buyers we spoke with, 86 percent plan to use software at only one restaurant location.

Demographics: Prospective Buyers by Number of Locations

Number of locations

Most buyers contact us after having conducted their preliminary research. They’ve already determined that they will be purchasing new software, and usually have a specific time frame in mind.

Prospective Buyers' Time Frames for Implementation

Timeframes

Sixty-five percent of the buyers we spoke with planned to make their purchase within 90 days, while another 11 percent planned to purchase within a year.

Implications of Research

Discounting the two years following the recession, the food-services industry has been growing strongly for well over a decade. As it grows, more new restaurants are opening and existing restaurants are expanding with new locations. Both of these factors are increasing the demand for restaurant software.

Restaurant Industry Growth: 2000-2013

Total employed

This demand is characterized by two size-specific preferences. Smaller establishments are generally seeking best-of-breed solutions to better handle customer-facing business operations, such as reservations and order-taking. With increasingly larger business sizes, the requirements shift more towards integrated suites.

Additionally, changing trends in the industry cause many to inquire about new functionality, such as tablet integration. The restaurant industry’s use of tablets has piqued the interest of many businesses, and many buyers express interest in learning more about it. It is, however, still in the early phase of adoption, and few buyers are describing tablet functionality as a must-have feature.

Methodology

Software Advice regularly speaks on the phone with organizations seeking new human resources software. To create this report, we randomly selected 385 of our phone interactions to analyze. If you’d like to further discuss this report or obtain access to any of the charts above, feel free to contact me at craig@softwareadvice.com

Restaurant Industry Sales chart created by National Restaurant Association, 2014.


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