Imagine pulling up to a restaurant and having the digital menu greet you by name, maybe wish you a happy birthday, and then display your favorite menu items.
That scenario may soon become a reality thanks to a partnership between Louisville-based Creative Realities Inc. (Nasdaq: CREX) and Freddy’s Frozen Custard & Steakburgers, a fast-casual chain founded in Wichita, Kansas, in 2002. Freddy's has more than 440 stores in 36 states.
The two companies are installing new fully digitized, design-optimized menu boards in the drive-thru lanes of Freddy’s restaurants, and they expect them to become a standard in the quick-service restaurant (QSR) sector in the future.
Rick Mills, CEO of Creative Realities Inc. (CRI), said the addition of drive-thru technology will allow Freddy's stores to optimize order times and strategically feature high-demand products.
“Freddy's is one of the first quick-service restaurants that I'm aware of that is 100% digital on the inside,” he said. “Freddy's is really a leader in the indoor transformation of digital and now the drive thru.
"Frankly, most of the other QSR brands are behind. If the digital can help Freddy's save 10 seconds per customer, it actually adds up over the day to a significant amount of revenue.”
CRI, designs, develops and deploys consumer experiences for high-end enterprise-level networks, and is actively providing recurring software-as-a-service (SaaS) and support services across diverse vertical markets, such as automotive, food service/QSR, gaming, theater and stadium venues. The company, which has offices in Louisville, Dallas, Atlanta and Winsdor, Canada, has active installations in more than 10 countries.
Mills said CRI has provided indoor digital signage for Freddy’s since 2018. A few of its other customers include Verizon, Macy's and the Los Angeles Rams.
The company, which has about 110 employees, reported a first quarter revenue of $10.8 million, representing an increase of $5.8 million, or 115%. Mills expects it will earn about $45 million in revenue this year.
Freddy’s originally engaged CRI as a consultant to analyze and optimize their menu board design, which included providing insights to better predict and influence customer behavior, increase customer throughput during ordering and the creation of a consistent brand identity across franchise and corporate locations.
Sean Thompson, Freddy’s IT director, said it took more than a year to come up with the right design and software configuration for the outdoor signage. The Freddy’s location at 12929 Shelbyville Road in Louisville, which opened in June, was the first restaurant in the chain to be fully digital.
“We’ve been looking at digital and doing some digital trials. Our first outdoor digital was almost a year ago. It was last fall at a concept location in Salina, Kansas. We started there and we’ve been adding locations here and there," Thompson said. “I think we’ve opened 10 restaurants since then, but the new one down the road [from CRI's offices], that was our first go at saying, ‘Deliver the full stack.’”
Thompson said the all-digital set-up will become standard at new restaurants and the owners of older franchise stores will be able to upgrade at their own discretion.
Mills said the next step is to personalize the menu boards. He imagines Freddy’s starting a loyalty program like the Kroger’s reward card, which allows the company to collect data that can be used to enhance a customer’s individual experience.
Thompson said Freddy’s is being deliberate about taking that next step because it comes with a lot of responsibility.
“One of the first things people bump on is, let’s call it the 'creepy factor' ... If you roll up and the menu says, ‘Hey, Michael,’ you might say, 'I don’t want that,'" he explained. "That’s a key thing we have to consider, and then there is also protecting that data. There is a lot of work that goes into that vision."
Thompson declined to reveal how much Freddy's invested in the technology, but he added that these types of upgrades boost the pace, size and throughput of transactions, helping Freddy’s reach and exceed return on investment goals.
