At Your Service on the Table: Impact of Tabletop Technology on Restaurant Performance

SMU Cox School of Business Research Paper No. 18-9

June 2019, forthcoming at Management Science

50 Pages Posted: 18 Sep 2017 Last revised: 25 Jun 2019

See all articles by Tom Tan

Tom Tan

Southern Methodist University (SMU) - Information Technology and Operations Management Department (ITOM)

Serguei Netessine

The Wharton School, University of Pennsylvania

Date Written: September 12, 2017

Abstract

Some industries such as healthcare and financial services have reported significant productivity gains from introduction of new technologies. However, other more traditional, labor-intensive industries are lagging behind. We use granular data to examine the impact of a customer-facing technology (a tabletop device that facilitates the table service process) on the check size and meal duration aspects of restaurant performance. The restaurant chain in our study implemented tabletop devices in a staggered manner, offering us a quasi-experimental setting in which to apply a difference-in-difference technique and identify the causal effect of the technology. We find that the tabletop technology is likely to improve average sales per check by close to 3% and reduce the meal duration by close to 10%, which increases the sales per minute or sales productivity by approximately 11%. Various robustness checks of our empirical strategy and post-hoc analyses find that tabletop technology allows normal-ability waiters to improve their performance more significantly than high-ability waiters. In addition, the technology does not change the staffing level. Overall, our results indicate great potential for introducing tabletop technology in a large service industry that currently lacks digitalization.

Keywords: technology innovation; self-service technology; labor productivity; restaurant operations, service operations

Suggested Citation

Tan, Tom and Netessine, Serguei, At Your Service on the Table: Impact of Tabletop Technology on Restaurant Performance (September 12, 2017). SMU Cox School of Business Research Paper No. 18-9. Available at SSRN: https://ssrn.com/abstract=3037012 or http://dx.doi.org/10.2139/ssrn.3037012

Tom Tan

Southern Methodist University (SMU) - Information Technology and Operations Management Department (ITOM) ( email )

Dallas, TX 75275
United States

Serguei Netessine (Contact Author)

The Wharton School, University of Pennsylvania ( email )

3730 Walnut Street
Philadelphia, PA 19104-6367
United States
(215) 573 3571 (Phone)

HOME PAGE: http://www.netessine.com

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