Is a digital menu board tsunami heading for QSRs?

by Scott Sharon

Vertigo Group USA

I was in the traditional menu board business most of my 30-plus year career. During that time I have designed and sold menu board systems to most of the major QSRs and several smaller chains. I was very excited when I first started learning about using TV screens as menu boards because it made so much sense.

The first indoor digital menu board I designed (I believe it was the very first in the industry) and sold was for an Arby’s franchisee in Richmond, Va., who owned 14 Arby’s restaurants around Richmond, and whose average sales were double the average of all the other Arby’s restaurants nearby.

This early digital board consisted of four to six of the old 26-inch CRT TV screens, each connected to old style 8-track continuous loop video cassette players. As you can imagine, this board was very large and heavy, but it worked great. We had to record movies of the food and menu board copy on the cassettes to play back. We installed these in all 14 Arby’s.

Several years later when flat screen TVs became popular and the restaurants started installing Internet access I was convinced every major chain would have digital menu boards within five years. That was over 10 years ago. That’s why I got out of the traditional menu board business and started my own digital menu board business. I did not want to keep selling my customers old technology. I was prepared for the great future I expected to happen with this exciting new technology.

Most of my current customers agreed with me, and several started testing digital menu boards. The consensus of opinion was if the new boards increased sales by at least 5 percent they would roll them out to their systems. Almost all the tests were successful and several chains, such as McDonald’s, Popeye’s Fried Chicken and a couple others, started rolling the boards out to their systems. Unfortunately this start-up of the industry happened a little too quickly. The software was very difficult to use, and the choices of hardware were very limited and expensive. Although we all agreed the value was there we had to wait for further improvements.

Since that time all the needed improvements have been made. In fact, the technology has surpassed the needs of the QSR market. There are many more choices of hardware and software available, all at a lower cost. The software is very easy to use and has many more capabilities. Digital menu boards are very popular in Europe and Asia. Many of the U.S. chains that have restaurants in Europe and Asia are using digital boards there and have been for several years. Tim Horton’s in Canada rolled out indoor and drive-thru digital boards to all their restaurants, and they love them. But still, no rollouts in the United States.

We have always been early adopters of new technology in this country, so I had to learn why none here have made the switch. Recently I met with the major chains to find out why. I asked them what was holding them back and what would have to happen for them to roll out digital menu boards into their systems. They all believed digital boards were a good idea and agreed they would do it eventually, but none were sure when. I received very similar answers from every company. Following is what I learned about why there have been no major rollouts:

1. Most of the major QRS chains have been testing digital boards for several years. I have observed most of the tests and been involved in some. None are testing the full capabilities of digital boards, although some are more than others. We in the digital signage industry have done a very poor job of teaching our customers all the ways they can use the technology to increase their sales and their margins. I’m always shocked when I learn that some don’t even know what they are testing for. One testing team told me they were testing just to see if they worked.

Installing digital menu boards and using them the same way you use traditional boards is like purchasing a mobile phone, hanging it on your wall and leaving it there. Simply switching a few of the panels over to digital is the same thing.

2. The testing companies typically use their current traditional menu board suppliers to supply the digital boards and do the test. Although I admire supplier loyalty, this may not always be the best decision. It is critical for the QSR chains to get the assistance of digital menu board experts to help them “think out of the box” and teach them the full capabilities of digital menu boards. Would you go to the Post Office to get them to help develop a new e-mail system?

3. Top management at McDonald’s, Burger King and Yum! Brands have all recently made the statement, “we will not switch to digital menu boards until a reliable and reasonable cost outdoor display has been developed.” This makes sense because 50-70 percent of their sales come from the drive-thru. This is why I have spent the last three years working on the development of such a drive-thru display. When I started my research all the outdoor displays were manufactured by smaller companies. Typically they would purchase an outdoor open frame screen and rebuild it. They replaced all the lighting with brighter lamps to stand up to the sunlight. They applied treatments to the glass and built waterproof environmental enclosures with air conditioning and heating units to protect the screen and player. There were several companies doing this in very small quantities. The finished product had several markups and a lot of extra cost. Also, they only gave a one year warranty on the finished product.

It became evident to me the only way to build an outdoor display at a reasonable cost was for the major LCD manufacturers to build them complete in their factory in larger quantities and provide a decent warranty. I’m very happy to report there is now one or more of the major manufacturers that produce the outdoor boards the QSR market needs.

In conclusion, I do believe the digital menu board tsunami is ready to start. It’s taken a long time, a lot of money, a lot of work and some of my colleagues are no longer around to share in it, but indoor and outdoor digital menu boards have been fully developed and tested. We have proven they will increase your sales by more than 5 percent and eliminate your annual menu board graphics cost.

So the wave is ready to start, and the first trickles have started — how long before the flood?

Sharon is president of Vertigo Group USA, which is working to develop a reliable, low-cost outdoor digital sign or menu board for use in QSR drive-thrus. Vertigo Group USA designs, provides, installs and services digital signage systems, including the IT equipment and software.

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