Seven years ago I wrote a blog titled “Will the Digital Menuboard VARs Disappear? I wrote a volume 2 with the same title in 2018. I asked that question and wrote the blogs because seven years ago one of the LCD display companies had been selling digital menu boards (DMB’s) directly to the end users, while telling their resellers (VARs) they would not do that. On a couple large projects they set up “dummy resellers” to cover it up. They did not want the VARs to know this because almost all their sales went through resellers and they could not afford to upset them.
I respected this LCD company’s sales ability because they were selling more than any other company at that time. However, as it turned out, they really didn’t have much effect on how the DMB’s went to market because they screwed up most of the projects they sold and eventually lost them. I can provide a list of several major QSR chains where this happened. Their primary problem was they only had a sales and marketing team. They did not have the knowledgeable people required to manage the projects and keep up with the day to day issues. Issues such as; “what happens when a new restaurant opens?” or “what happens when the designed DMB won’t fit in a restaurant?” These types off issues are common in a roll-out.
We’ve have all seen the same thing happen in other industries where middlemen are cut out to eliminate markups. A classic example of this working well is Sam Walton and Walmart. There are situations where a middleman is not adding enough value and should be eliminated, however, you have to make sure the needed functions are not eliminated with them. Many times these functions are added back to the process by adding employees at the end user or supplier at a higher cost than what they thought they would save.
We may be seeing this happen with two recent huge projects at McDonald’s and Burger King where they went direct to Samsung . Although I hear they are having lots of problems with the big DMB roll-out at McDonald’s I don’t know the facts so I won’t comment on that project. I am much more familiar with the Burger King/RBI project because I worked on it for more than two years. Also, the company I started, LSI Images, has been their old style menu board supplier for about 15 years.
The short story is, I (START) had been working on the Burger King project for over two years and we were going to be awarded the project until they decided to go to their parent company (RBI) to finance the project. RBI then met with Samsung and decided to go direct with Samsung on the project. It’s ironic because they did what I was teaching Burger king so you could say I eliminated myself.
I think with these two large chains doing this it will change the industry regardless of how many problems they have and how much it costs them. All the major chains will follow suit and all that will be left for the VARs will be the small chains. If you are a VAR you may be wasting your time working on the large projects. In today’s business world you can never be sure you won’t be eliminated by a new technology or process.