The Growing Use of Digital Kiosks in Smaller Neighborhoods

Digital kiosks, initially popular in busy city centers, have now made their way into smaller business districts in Korea. The cost efficiency of these automated terminals has allowed businesses in these neighborhoods to benefit from their use. Customers can conveniently place their orders at kiosks installed at each table and receive notifications when their food is ready. The rise of kiosks has reshaped the dining and retail landscape across the country.

Restaurants, such as a local Chinese restaurant mentioned in the article, have embraced this trend to cut costs and improve efficiency. The owner of the Chinese restaurant installed kiosks at each table in response to a decline in customer numbers during the Covid-19 pandemic. By reducing the number of hall staff and equipping each table with a kiosk, the owner was able to sustain the business while increasing customer convenience.

The adoption of kiosks is not limited to independent smaller establishments. Well-known brands and franchise outlets have also implemented digital kiosks. Burger franchises like McDonald’s, Burger King, and Lotteria have been using kiosks since 2015, with adoption rates exceeding 70 percent.

The significant increase in the number of kiosks installed in food service establishments is evident in the data provided the Ministry of Science and ICT and the Korea Rural Economic Institute. From 2019 to 2022, the number of kiosks increased fifteen-fold. Additionally, the percentage of food service establishments using kiosks and other unmanned ordering systems grew from 1.5 percent to 6.1 percent during the same period.

The installation cost of kiosks ranges from 2 million won to over 12 million won. For small business owners facing financial challenges, the financial benefits of using kiosks are apparent. By installing two kiosks, restaurant owners can recoup their investment within three months, equivalent to the salary of one employee. Alternatively, renting kiosks offers a more financially viable option with monthly fees over a 36-month installment plan.

While cost savings are a significant factor in the adoption of kiosks, they also streamline employee training, alleviate concerns about employee retention, and reduce potential interpersonal conflicts, according to Economics Professor Cho Joon-mo at Sungkyunkwan University.

However, concerns have been raised about potential discrimination against digitally inexperienced individuals and the displacement of low-wage, low-skilled workers in the labor market due to the widespread use of kiosks. Proposed amendments to the Elderly Welfare Act aim to ensure that elderly individuals unfamiliar with IT devices can use kiosks with ease.

The increase in kiosk adoption aligns with the rise of solo restaurants, where owners run establishments without employees. Economic challenges, rising rent costs, minimum wage hikes, and the growth of platform-based workers have contributed to this trend. It is clear that the use of digital kiosks is transforming the way customers order and businesses operate in Korea.

Sources:

– Ministry of Science and ICT

– “2022 Survey of Food Service Establishments” the Korea Rural Economic Institute

– Prof. Cho Joon-mo’s report “Impact of Kiosk Expansion on Restaurant Employment”

– Statistics Korea

– Prof. Suh Yong-gu from Sookmyung Women’s University

– Prof. Lee Eun-hee from Inha University’s Department of Consumer Science