There’s a powerful new entrant into the crowded restaurant technology field. Today, Square announced it will offer an entire restaurant management system called Square for Restaurants.
Square is entering a hotly contested market with legacy players like OpenTable — amazing that OpenTable is a legacy player — and recent entrants like Clover from First Data Corporation all vying for its share of very large pie.
According to the National Restaurant Association, the industry was responsible for some $800 billion flowing through just over a million establishments.
For years many restaurant owners have had a love/hate relationship with OpenTable as they extract a per seat reservation fee. Last year in a New York Times article restaurant owner David Barber said this “These kinds of technologies have been a boon for the diner. But the idea that it’s delivered this great efficiency to the restaurant business is kind of a myth, especially for fine-dining restaurants.”
We assume Square has closely studied this market and concluded they can offer something that is better and more cost effective.
According to today’s announcement, Square for Restaurants is a point-of-sale system that handles everything from menu updates, floor layouts, employee scheduling and performance tracking to tip splitting.
Just short of four years ago, Square purchased Caviar — the food delivery service for $100 million dollars. While that purchase was the initial puzzle piece Square would need to put together a comprehensive restaurant management solution, it also represented the leading edge of the restaurant business as take-out orders continues to grow in the face of declines in in store eating.
More recently, Square acquired Zesty, which gave them access to the more profitable corporate catering business. Zesty will be folded into the Caviar operation.
Square can leverage its Caviar purchase with a comprehensive solution. Charging just $60 per POS screen, Square’s entry just might be the trigger that moves restaurant operators off of OpenTable.
While Square may have some direct customer traffic via its Caviar accounts, Square, like Clover (First Data Corporation) will still have to figure out partnerships to drive reservations to compete with the likes of Opentable and Yelp’s Resy.
In the end, the winners will be those companies that deploy technology that can help restaurants offer customers a better dine in, dine out experience, at a lower price point that is simple to use. Square’s entry into this crowded market might just trigger a considerable food fight with established players like OpenTable and First Data and even Yelp taking aim at Square.
The recent string of deals involving Square highlight its ambitions to be all (or at least most) things to the tech-enabled small business owner, from enabling point of sale to providing access to capital to facilitating bookings, handing payroll, distributing marketing emails and so on. It’s recent acquisition of Weebly (for $365 million) showed Square sees site building as a strategic capability, with Weebly’s ecommerce features helping Square compete with Shopify an other ecommerce enablers.
We have a feeling Square isn’t done.