Broad Thinking. Narrowcasting.
By: Ken Goldberg
Some thoughts on the Food Service vertical as this blog joins the Mile High Club. No, not THAT Mile High Club, the one where the blog gets written online while at altitude. En route to the National Restaurant Association annual conference in Chicago, it occurs to me that the huge Food Service industry serves both as a major battleground for digital signage solution providers as well as for the way the market is playing out in general. Tens of thousands of attendees will descend upon the huge McCormick Place facility, doing exactly what you would expect at the world’s biggest restaurant show: networking; attending educational sessions; shopping for equipment, ideas, suppliers, and technology; and generally eating their way through miles of exhibits. The loneliest person there may be the person actually selling food at the concession stand. I am just hoping that the gluten-free macaroon people are less than a 15 minute walk from our booth!
The Food Service sector is made up of giants, some very big players and a huge number of small businesses. If you drive down a busy street in your town, you will see some of each. They have different needs, different use cases for technology, and very different approaches to how they buy technology. What we are seeing today, and what I expect to see more of when I arrive, is further grouping of the vendors and solution providers along the same lines as the prospective buyers. The giants and most of the very big players have staff devoted to figuring out how to integrate technology with their business. They conjure up use cases, study the marketplace, liaise with the IT and operations teams, and try to identify solutions. They tend to buy based upon ROI rather than price, upon requirements being met rather than features per se. They seek solutions. The smaller operators tend to have less sophisticated internal processes and IT capabilities. They tend to buy based upon price, and “good enough” is more often than not good enough. There is less available resource to conduct deep dives and the focus is upon getting the project done.
On the digital signage side of the fence, we seem to have solution providers dividing on similar lines. There are five or so players who see the sector as strategic enough to invest in their own exhibit hall presence. They have customer stories to tell, knowledge to share and a developed solutions and ecosystems to offer to prospects. There are probably an equal number who are taking the partner booth route, hoping to get traffic and halo effect from larger entities such as display vendors. They have less experience to share, and are generally hoping to port some success in other verticals to this huge market. Both will have busy shows, but how they spend their time during and after the show may be different.
The vast majority of the Food Service industry in terms of doors is obviously among the giants and near giants. The lion’s share of actual companies (and attendees) is really in the small to medium business sector, a reflection of the generalized economy. The small and medium sized prospects are going to have time to listen to the “hobby lobby” of underpowered, under-featured, future-shocked offerings. No doubt, you will hear about the “huge interest” shown in such offerings. Despite the hype, they are barely good enough. We’ve noted that good enough may be all that is necessary for some buyers, but how that translates into sustainable business remains to be seen. The big and the huge are going to want to talk about concepts like integration, redundancy, failover, ROI, roadmaps, localization and turnkey projects, to name a few. There will be requirements for multiple use cases in each venue, and one size will not fit all. The ability to share knowledge and address disparate requirements under one roof will separate winners from losers. Sounds like fun to me.
The Food Service industry serves as a good metaphor for the digital signage market in general. How it plays out in the coming months and years will likely mirror how our industry shakes out. The disruption of low cost computing (more on that in future posts) is simply that: a disruption. It is here to stay, but it will not change the demands or processes of sophisticated buyers, and those who latch on to price points instead of solving problems will find themselves marginalized and commoditized. Knowledge must be transferred as easily as files are, and evolving needs will need to be met. Like the gluten-free macaroon people, it is not sufficient to use buzz words. The product has to stand on its own and integrate with an overall solution. And it has to be extensible. That said, I am going with the coconut.