A high-tech initiative that uses mobile phones to deliver foodservice discounts and promotional messages to users has recently finished a successful pilot and been rolled out to Microsoft's Puget Sound locations in Washington State. The initiative is based on Tag technology, which uses bar-code-like icons that are scanned using the camera on a phone loaded with the free Tag reader application.
The scan then hyperlinks the phone to a website containing a discount offer, a promotion or a targeted message. The linked messages can be changed, rotated and customized.
Microsoft piloted the Tag system over the summer at several of its sites in downtown Bellevue, WA, and at its headquarters complex in Redmond, WA. In the pilot, the Tag icons were imprinted on beverage cups, café sneeze guards, catered box lunch containers, napkin dispensers, station signage and employee kitchenettes.
Depending on the location, they activated messages that directed users to discounts on specific items at select dining outlets, promoted new items or communicated nutritional data. Some Tags in Microsoft's West Campus Commons also provided information on upcoming events at the venue's performance stage.
Customers who wished to take advantage of the discounts offered by the Tags validate the offer with a scan of their phones at the place of purchase. The discount is then redeemed at checkout.
Microsoft rolled out the Tag system in late November and early December after the successful pilot. The company had set a target of 2,300 average daily scans and got 3,300. It was also looking for 800 weekly Tag redemptions and got over 5,000.
One eye-opening stat from the pilot: customers who used Tags to get discounts posted a seven-cent check average increase.
“We believe users who got discounts then decided to make some add-on purchases, increasing their totals,” says Mark Freeman, senior manager of services. “Obviously, anything that can produce a bump in check average — and seven cents is a pretty significant bump — is something we would want more of. Our challenge will be to make sure that the early results don't fade as the novelty wears off, so we need to make sure that the value is there for customers to keep using it.”
The Puget Sound rollout was done in phases to use up the previous supply of non-Tagged beverage cups, since they serve as a primary Tag vehicle (Microsoft goes through about two million cups a month). There is no appreciable cost increase associated with Tagging cups since the icon is no different than any other imprinted cup logo.
Freeman says possible future extensions of the Tag system include refining the targeting of the discounts, perhaps by using GPS data from user phones to tailor the promotions to the potential customer's physical location. The Tags could also at some point be integrated with the POS system for automated payment.
Microsoft Dining's contract services partner, Compass Group, worked with it on rolling out the Tag system and will be taking it to some of its college dining venues in the near future.