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

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 approximately 1% (95% confidence interval is from 0.8% to 1.02%), and reduce the meal duration by close to 10% (95% confidence interval ranges from −9.94% to −9.54%). The combination of these two effects 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 low-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. This paper was accepted by Vishal Gaur, operations management.