Multiple outlets have picked up on the next evolution in frictionless loyalty, as a California burger chain is piloting facial recognition software to recognize loyalty program members in-store. If such technology achieves widespread adoption, consumers may certainly benefit from the time saved by avoiding a loyalty card swipe—as always, however, the real benefit will depend on how the technology is used to foster and sustain customer relationships.
By Rick Ferguson
Cali Group, the holding company that owns California restaurant chain CaliBurger, bills itself as more than a restaurant company—it’s a tech company that leverages the restaurant chain to demonstrate proof-of-concept of its restaurant software solutions, which it then sells to other restaurants. Cali Group’s latest brainchild is the result of a partnership with NEC Corporation: AI-enabled self-ordering kiosks that leverage NEC’s facial recognition software to identify registered customers and pull up their loyalty accounts and order preferences. The kiosk pilot program is now at CaliBurger’s Pasadena location, where the Quick Serve Restaurant chain showcases new technologies developed by its parent company.
If customers respond to the new ordering experience, the kiosks will be rolled out to CaliBurger’s global locations next year. Also in 2018, the platform will be used to allow customers to pay using their faces. Customers will have the option of immediately activating their loyalty accounts as they approach the kiosks without needing to swipe a card or type in identifying information. The loyalty account shows a customer's favorite historical meal packages, enabling the customer to complete the ordering transaction in a matter of seconds. Money quote from John Miller, CEO of Cali Group:
"Face-based loyalty significantly reduces the friction associated with loyalty program registration and use; further, it enables a restaurant chain like CaliBurger to provide a customized, one-on-one interactive experience at the ordering kiosk. Our goal for 2018 is to replace credit card swipes with face-based payments. Facial recognition is part of our broader strategy to enable the restaurant and retail industries to provide the same kinds of benefits and conveniences in the built world that customers experience with retailers like Amazon in the digital world.”
In a sign that the United States is no longer the sole pioneer in the consumer tech space, Cali Group isn’t the first company to launch facial recognition in the restaurant sector; early this year, Chinese internet giant Alibaba’s fintech subsidiary Alipay launched facial-recognition payments in KFC restaurants in Hangzhou, China. The platform isn’t quite as frictionless as Cali Group’s platform, as the system requires customers to enter a cell phone number to help guard against fraud.
The news has piqued the interests of privacy watchdogs, who worry that NEC, the company providing CaliBurger’s facial recognition software, has a poor privacy record. Money quote from Gizmodo:
“NEC Europe equipped South Wales Police with its flagship facial recognition software, allowing the police force to locate individuals on watchlists using real-time surveillance on its CCTV cameras. NEC rolled out a similar surveillance system throughout major cities in Georgia, using the company’s NeoFace Watch video facial-recognition software to check for ‘suspicious individuals’ in real-time via CCTV footage. And NEC Australia recently teamed up with a vision analytics firm to enable real-time facial recognition from both fixed and mobile cameras, including body cams and drones.
“Cali Group’s Miller, meanwhile, assured us in an email that the company is not creating a database of customer photos nor videos—while reminding us that we’re all being constantly spied on by CCTV cameras. ‘We do not generate any new visual data that is not already being captured by CCTV’s in retail locations around the world,’ Miller said. ‘Unlike CCTV, Cali Group does not store images of people. What is stored is a unique “digital fingerprint” of the face itself and not any image or other identifiable information.’”
While Gizmodo’s privacy concerns may be legitimate, the author does discount one key difference between general surveillance software and Cali Group’s kiosks: CaliBurger customers opt-in to the facial recognition experience, and do so willingly in exchange for rewards. Provided CaliBurger is truthful and transparent in regard to what data it stores on customers, and what customers get in return for allowing their faces to be scanned, then everyone wins. As trust is an essential component of customer relationships, it’s in CaliBurger’s best interests to be good stewards of their customers’ data.
If you want to see Cali Group’s new facial recognition self-ordering kiosks in action, look for them on display at NRF 2018 in New York City in January.
Rick Ferguson is Editor in Chief of the Wise Marketer Group and a Certified Loyalty Marketing Professional (CLMP).