Applebee’s is trying to solve those fights people have about smartphone use at the table once and for all by bolting a tablet to each table in its 1,860 U.S. restaurants. The dining chain announced on Tuesday that it will install 100,000 tablets nationwide so diners can order food, play video games, and pay the check.
The chain is following on the heels of Chili’s Grill & Bar (EAT), which began installing tablets in its restaurants this year and has said it will have the devices in most of its 1,266 U.S. locations by the first half of 2014. The objectives for each company are the same: They’ve found that tablets cut wait times and lead customers to spend more on appetizers and desserts and to leave bigger tips.
For now, at least, the computers won’t take over for human employees. Applebee’s says it’s not changing staffing levels in restaurants as the tablets are installed.
But this does mean that the Silicon Valley-ization of America’s casual dining has arrived. Jay Johns, a senior vice president for DineEquity (DIN), which runs Applebee’s and IHOP, says the devices open a new competitive front. He argues that tablets will allow a level of customization currently available only through online services: If you want extra pickles, just type it in. (Johns acknowledges, however, that servers have always been able to honor requests for pickles and will continue to do so.)
Johns also foresees deals to expand the amount of games and other digital content available via the tablets. Eventually, the online experience at Applebee’s could be as much of a distinguishing factor as its brew pub pretzels or chili cheese nachos. “Every restaurant has a stove, every restaurant has a fryer. That doesn’t mean every restaurant is the same,” he says. “It’s what you do with it.”
While a number of tablet manufacturers make suitable devices, Johns says that Applebee’s chose a startup named E La Carte, largely because of its Silicon Valley pedigree. The company came through the Y Combinator accelerator program, and Intel (INTC) is a major investor. The tablets run on the Android operating system.
Applebee’s will pay the company a monthly fee, but it does not pay per transaction. It declined to discuss further financial details. DineEquity is considering outfitting its IHOP restaurants with tablets as well, although no moves impend.
Notably, neither Chili’s nor Applebee’s chose to use iPads (APPL), which serve as the in-house technology in an increasing array of small businesses. For Applebee’s, price was a factor, as was the Apple device’s lack of a removable battery. Rajat Suri, founder of E La Carte, thinks companies focused on building restaurant-specific tablets will hold an enduring advantage.
“IPads in a restaurant environment are not a good fit,” he says. “They tend to break. They tend to get stolen.”
