The Executive Interview Series provides readers with exclusive insights from movers and shakers in the payments industry. The Payments Industry is under continuous transformation, as such this series provides diverse perspectives on everything from strategy to payments technology and to the future of the industry.
In this interview, TSG’s Market Intelligence team-member Alex Ferguson sat down with UNION POS founder, Alex Broeker, to learn more about his quickly growing connected POS and mobile payment solution start-up.
Background: Alex Broeker is the CEO/Founder of UNION POS and spent a decade as an Entrepreneur in Residence and General Partner at Trellis Partners an early stage venture capital firm, where headed the firms fintech focus. Alex used his venture experiences to spearhead the creation of restaurant and bar focused UNION POS which includes touchless consumer mobile ordering, loyalty, and payment solutions through TabbedOut.
TSG’s Alex Ferguson:
How did the idea of TabbedOut and UNION POS come about?
A: Alex Broeker
The best places I have ever been to all have one thing in common: they deliver great experiences. Amazing service can mask mediocre food, but great food can never mask a bad guest experience.In looking at hospitality workflows that are inefficient and take time away from creating a great guest experience, two things clearly stand out. One is servers entering orders on a POS screen and the second is delivering guest checks. These two incumbent workflows create nonproductive labor costs and actually reduce sales. Let that marinate for a second. Every guest entering a venue today has a POS and payment device in their hand already. The only thanks we have for COVID is now guests expect to use this device to order and pay their check. The next generation of hospitality owners will embrace this shift and use this shift to their benefit. While COVID accelerated this shift, it was coming. That is the origin of UNION: a simple one click e-commerce experience for guests in their favorite restaurant or bar.
Q: Alex Ferguson
What aspect of the bar/restaurant industry did you identify that could be improved upon with this product?
A: Alex Broeker
We focus on high volume locations that view technology as a key enabler of creating awesome experiences. Most of our high-volume locations tend to have consumers that are very tech savvy. When was the last time you were in a high-volume location where consumers were not looking at their phones constantly? We simply allow guests to use their mobile phones to learn about specials, order, tip and pay. Our venues that have adopted service models leveraging consumers phones have on average increased their total sales by 25%. Customers order and re-order faster and tables turn when the guest is ready, never again having to flag a server down to bring the check. When was the last time you heard someone say “I really enjoyed waiting 10 minutes for my server to come to my table so I could order a drink?”.
Q: Alex Ferguson
TabbedOut is a unique tool for bars/restaurants, would you mind briefly explaining the product and its use cases?
A: Alex Broeker
We allow guests to open their check from a QR code upon being seated without a requirement to download an app. They order, re-order, get VIP loyalty and product rewards and tip and pay when they are ready to go. No menus, no dirty cards to handle. Both check sizes and table turns go up as guests are ordering and re-ordering faster and not waiting for a check ever. Tabs are opened and closed with Apple Pay/Google Pay so chargebacks are a thing of the past. All complex back of house functions like voids, spills, comps, discounts, and reporting are all handled on the most robust POS platform ever developed that can either sit on an iPad or iPhone of servers or managers when needed. Staff focus much more on delivering hospitality, upselling, and creating experience.
Q: Alex Ferguson
What was the incubation period like? What was your biggest takeaway from the experience?
A: Alex Broeker
We started with the consumer side first as the user interface and experience needed to be consistent yet feel like it was an extension of the venue itself. The experience for the guest in terms of menu items, modifiers, re-ordering, highlighting featured items and tip/pay needed to be chameleonized for each venue yet simple for guests. That took a lot of hard work. Hospitality POS systems that tried to tack on a mobile solution have proven to be consistently terrible consumer experiences.
Q: Alex Ferguson
Looking through your background, it appears you have an extensive background working in the venture capital space. How has your 25+ years of experience in the space helped you in your role with UNION POS and TabbedOut?
A: Alex Broeker
I’ve learned so much from my venture experience in terms of leadership styles and how passion, belief and sheer will account for more than anything when delivering value to our employees, families and shareholders. The path is always bumpy, your will and belief straighten it out.
Q: Alex Ferguson
The POS industry is extremely competitive, what sets UNION POS apart from some of the other systems on the market?
A: Alex Broeker
It was maniacally designed from the ground up from over 50 owners and operators themselves with backgrounds in high volume restaurants, bars, nightclubs, and hotels. It is the first hospitality platform originating from an approach where we took years of input on what they both liked and hated about incumbent platforms. We improved on the things they liked and started fresh on the things they hated. The end result provided all the benefits and cost effectiveness of cloud based tablet solutions with the raw horsepower of server based solutions critical for high volume venues. It has a 98%-win rate against any of our competitors when we get in the batter’s box. It’s a fraction of the cost of the dinosaur era server systems yet delivers unmatched performance against them or any tablet solution on the market today.
Q: Alex Ferguson
In some of our past conversations, data has really been a central focus. How do TabbedOut/Union POS utilize data to improve restaurant performance?
A: Alex Broeker
A POS platform is a powerful data collection tool. It knows your guests, what they order, their frequency, their likes, and dislikes and to date, no platform takes this consumer and SKU data and presents it to hospitality operators in a simple and actionable way in real time. One trillion dollars a year goes through hospitality POS platforms, yet no one is using it for what it really is; An “Amazon” like engine that knows your guests, analyzes their purchases, and then helps you sell more or deliver exceptional experiences. Similar value can be provided to the suppliers of products to hospitality. No POS platform starts with a global canonical SKU catalog where every SKU is guaranteed to be the same SKU at every location. Stock outs go away, sales incentives to operators can be provided, targeted product rewards to consumers can all be delivered using a single source of truth when it comes to data. As an example, other platforms attempt to homogenize dirty data by guessing that Bud L and BL, which are the data elements represented in the POS menu from two different locations, are truly Bud Light. Not at UNION.
Q: Alex Ferguson
Being a point-of-sale company focused on the restaurant/bar space what challenges have you faced during the pandemic? And how has your company adjusted/changed to better serve the businesses who may be struggling?
A: Alex Broeker
It’s been a challenge watching the devastation for sure. We saw transaction volumes drop 92% overnight in our base. Thankfully, since we serve very high-volume locations that were very well run, we’ve seen less than a 2% failure rate in our customers. They just battened down and are now opening again. 87% of our customers are now open. It did create an amazing opportunity for us at UNION/TabbedOut to accelerate all aspects of our integrated platform through connected consumers. 10 years of consumer technology adoption just happened in 6 months. Consumers expect to order and pay from a phone. Hand them a QR code and everyone knows what to do, freeing staff to truly deliver experience.
Q: Alex Ferguson
How do you feel the pandemic will alter industry trends in the restaurant and bar industry long term? Do you feel the pandemic has/will alter how the industry fundamentally works permanently?
A: Alex Broeker
No doubt. Muscle memory has shifted and the adopters of this incredible opportunity to use technology to increase their business will be the leaders of hospitality going forward. A new generation is here. What are restaurant owners doing to get on the screen of the device that their customers are looking at constantly? Disruption creates vast opportunity and the former hospitality leaders that want to hold on to the old ways of business as usual with menus and cards will be lost.