Online reservation systems aren’t new. The biggest player, OpenTable, has been operating since 1998. But the idea of pre-paying for dinner is without doubt a new idea in the foodservice industry.
It’s been pioneered by a restaurant owner who was keen to find a solution to problems that wouldn’t go away: the frustration of taking phone reservations and the number of no-shows.
Tock is a system requiring diners to commit to a date and a time slot for dinner, paying for a non-refundable ticket, in the same way that they might book for the theatre or a sports event. The ticket might be a low-price one, purely to hold a table, or one with a higher value that might give them a discount for opting for a time and date that is less popular.
Nick Kokonas, co-owner with chef Grant Achatz of three Chicago restaurants – Alinea, Next Restaurant and Aviary – is the driving force behind Tock, the new web-based ticketing application.
“We had some fundamental problems as a business, trying to communicate with all the people who wanted to call us,” he explains. During the course of an evening, the Alinea reservations team of three would receive 200 voicemail messages, each running at one or two minutes amounting to as much as four hours.
“Most were asking for a table for four on Saturday night and the answer would invariably be no. But if you didn’t at least call them back to offer a different table, they would think it was bad customer service,” says Kokonas.
The cost of running this service amounted to $300,000 in payroll and an average $260,000 per year on no-shows and short-seated tables, which were running at three to four people a night. As Kokonas says, “it seemed like the biggest waste of all time”. Tock deals with both problems.
A former derivatives trader and a restaurant industry outsider, Kokonas was geared to assess the challenge without the sense of conservatism ingrained in so many people in hospitality. Tickets seemed the obvious solution – at least to him.
“Hospitality people would look at me and say: ‘You’re nuts. That’s not how we do things’,” he says. Surprisingly, the sceptics included his business partner Achatz who, by his own admission, had built his identity as a chef and restaurateur on challenging convention.
But Achatz’s resistance came from the way he was trained. “The way you take reservations is by answering the phone, that is just the way it is,” he says. “Once Nick started articulating it to me, it was apparent that it would be a useful tool for the restaurateur – the ultimate sell was the advantages it also offered to customers.”
What exactly are those advantages? Number one, according to Achatz, is efficiency. “Customers don’t call and get a busy signal. They can book 24 hours a day and do it within 30 seconds,” he says. “Also, everything is transparent. They can scroll through the calendar, find out what times are available, make a selection easily and discover whether or not a table is available. If your preferred date is sold out, you can easily go through and find an alternative.”
Where Tock is really shaking up the market is by offering a ticket that varies the price, depending on the day and time of week. If a customer wants a table for two at Alinea on a Saturday night they can expect to pay $275 per head, but if they can be flexible and want to save some money, they can get exactly the same experience for $210 on Wednesday at 5pm.
“This is a huge incentive for people who are more flexible, and they get a 20% to 25% discount, which is significant,” says Achatz.
Tock launched in 2011 with Next Restaurant that, with its rotating menus is a different concept anyway. Kokonas says the first iteration was “stuck together with duct tape” – but it worked. The first day saw $540,000 in bookings for Next going through the system. “Next came out of the gate and worked really well. Customers were happy with it, so in 2012 we moved Alinea to it, and eventually Aviary too,” says Achatz.
Last year, Kokonas published a blog that revealed the data from 2013. Alinea served 20,050 diners for the year; there were 302 no-shows or 1.48% of all bookings. Almost all of those were ‘partial no-shows’. And, of course, with Tock the restaurant collected payment for the food upfront. Next’s numbers were similar. In 2013 there were 23,288 diners, 364 (1.54%) no-shows. Only five of these were full table no-shows.
Tock now has a team of 11 engineers, headed up by co-founder Brian Fitzpatrick, who founded Google’s Chicago engineering office. It has serious financial backing too. Investors include Thomas Keller, chef and owner of Per Se and The French Laundry; Rich Melman, owner of Chicago based restaurant group Lettuce Entertain You; and Twitter CEO Dick Costello.
Chefs who have signed up to the idea include Wylie Dufresne, who used Tock to sell tickets to the coveted last dinners at WD-50 before it closed.
While the ticket idea has grabbed the headlines, Tock is a versatile system and Kokonas estimates that 90% of Tock customers will end up using the system for cocktail bar Aviary, which has no prix fixe tasting menu.
“In any given city there will probably be just 20 restaurants selling tickets. Most will take ordinary reservations but the system also allows them to sell special events,” he explains. “If you want to plan ahead and get one of the experiences, you can go ahead and buy it. If you just want to make sure you have a table, then you put down a small $20 deposit that will be taken off your bill,” says Kokonas.
Outside the US, only London’s Clove Club – which has a five-course tasting menu and an extended version – has so far adopted Tock in the current pilot version. The restaurant quickly became popular after opening in 2013, gaining a Michelin star after only one year. Clove Club’s founders often had to deal with the same problems as Alinea. “Around 5% of all reservations were complete no-shows and 10% in addition were short-seated tables,” says co-founder Daniel Willis.
He had heard about Tock on the “restaurant grapevine” and with approached Kokonas earlier this year. The tickets have had a major impact, almost eliminating no-shows.
The advantages for restaurants include the ability to track and analyse customer seating and demand, but Tock has also proved helpful in planning. “When you sell tickets, you get the money after 48 hours, so you have money to plan – like a normal business,” says Kokonas.
“We know how much fish we need to buy, so we have gone to our supplier and said: ‘We’ll buy $50,000 of fish from you this month. Let’s pay you for the next three months, and you give us a better price.’ Those savings we can pass on to the diner.”
A little risk
Tock is set to launch more widely later this year – 480 restaurants globally have signed up to join, with a further 3,000 showing interest. But Kokonas is unsurprised that some parts of the industry are hesitant. “What’s weird in the restaurant sector is that people are so risk averse. But, if no one had bought a ticket when we opened we would simply have gone back to phone lines. There is very little to lose just by taking a little risk.”
As for diners who don’t like to pay in advance? “Chances are the people who won’t pre-pay wouldn’t be the type of people who would come to our restaurants anyway,” he says. “We have seen no change in our clientele since we started this four years ago.”
Kokonas is taking this as a sign that the industry is ready for change. “A lot of people say the industry hates technology, but I say they love it. If you look at most points of sale today they are antiquated and have not been updated in 18 years. This is going to change rapidly.”
Achatz too thinks now is the perfect time for Tock. “Ten years ago it wouldn’t have worked,” he says. “I don’t think people were ready for it then. Now, people are so tech-savvy – most of us walk around with computers in our pockets all the time.”