The world doesn’t need another headline heralding the ‘death of cinema’, which has been abound since television became mainstream in the 1940s. A headline that better summarizes the industry today is CNBC’s Movie theaters aren’t dying — they’re evolving.
The old format of a trip to the movies, complete with soda and popcorn, has remained constant since the 1930s. But, in recent years, we’ve seen some changes. A recent report by Placer.ai into movie theater footfall confirms that concessions have gone far beyond basic snacks to include sophisticated dining and drinking experiences. As the CEO of Cinepolis, Luis Olloqui told CNBC: “More people have big high-definition TVs at home, coupled with the ability to order out from top-notch restaurants.” Movie theaters are under pressure to create an experience that’s worth leaving the house for.
It is also important that they adapt to cater for younger demographics, which are now the most prolific movie-goers, with 12-17-year-olds going to the cinema five times more than those aged 60 and above. The expectations of these move-goers are different too; they are willing to pay more for better seats and many are motivated by premium experiences, such as having food and drink delivered to their seats.
If you’re investing in your cinema with new seats, premium experiences, large screens, and more diversified content then it only makes sense to consider upgrading your PoS so it’s able to keep up.
During the pandemic, cinemas took advantage of the downtime to modernize. Recently, the Hollywood strikes, and the subsequent stall in movie releases, have provided cinemas with another opportunity to draw breath and evaluate their systems. Once the pace picks up again, you’ll be running too fast to stand still. Slow periods can be the best time to consider upgrading your cinema PoS; you not only have more time to implement it; the need is greater.
Your PoS system is the flywheel of your operations. A great deal hinges on its performance, so it’s vital to have one that is up to the job. We know from our clients that changing cinema PoS can be a painful process and there are always lots of reasons not to do it, such as:
- Disruption: The headaches of finding and implementing a new system
- Hidden costs: The worry that it will be more expensive than you first think
- Doubts about return on investment: Will it really be worth it?
- Compatibility issues: How will it work with your existing systems?
- Just switched: You’re not completely happy with your new system but you’re not going through that process again in a hurry
These are all valid concerns. But, with the evolution of movie theaters gathering pace, it might be that you can’t afford not to update your cinema PoS. Having the wrong cinema IT systems can become an anchor which holds back your entire business. Not to mention, it can be a huge drain on your revenue and resources, which will only get worse over time.
In this article, we’ll explore a few reasons why now is the time to upgrade your PoS and what you should be expecting to achieve when you do.
Refine the basics
CinemaCon 2023 was abuzz with the announcement of the Cineplex and Cinionic partnership. This signifies a general move to improve the baseline experience for all moviegoers. Rich Daughtridge, president and CEO of Warehouse Cinemas told CNBC: “We’ve invested in new screens, we’ve invested in laser projection. To me, that’s the baseline. You have to create the best sound and picture experience to get people motivated to spend money to come out to the cinema.”
This was echoed by Shelli Taylor, CEO of Alamo Drafthouse for whom the quality of the seating is as important as the quality of the picture: ″We are looking at our theaters and making sure all of them are amazing. So if they don’t have recliners, we’re going in and we’re upgrading. We’re giving face-lifts where needed and just really refreshing and making sure that we continue to deliver that premium experience which people grow to love and expect.”
Of course, if you’re investing in upgrading your cinema experience, you’re going to need a PoS system to match. A good solution must be able to support seat upgrades and switches without having to issue refunds. It will come with an embedded F&B management module that lets movie-goers buy concessions online when they purchase their tickets and prompts servers to make upsell and cross-selling suggestions. And you should also expect an easy management tool for monitoring everything from key KPIs to helping eliminate employee fraud.
Take your cinema experience further
Many cinemas are now going beyond the basics to introduce new revenue streams. Cinepolis offers luxury dine-in experiences with food ranging from chicken wings to lobster tacos. It also hosts specialized dinners that are created to match the film.
Once you start offering refreshments that need more preparation than a popcorn scoop and a soda dispenser, you’re going to need a more sophisticated system. For example, your PoS system will need to send food orders to your kitchen and drinks orders to your bar. You might need the F&B orders linked to the cinema ticket so you know where your guests are sitting. And you will definitely need comprehensive menu management tools so any modifications (ie gluten-free or salad-no-fries) are directly reflected in your stock inventory.
Family Entertainment Centers
Another important trend we’re seeing is the move towards Family Entertainment Centers (FECs). According to Rolando Rodriguez, chairman of the National Association of Theatre Owners, the days of 30-plexes are over. “Most newly built locations will range between 12 and 16 screens and those with larger, preexisting footprints will look to repurpose some space for supplementary activities like arcades, bowling alleys, or bars.”
When you consider the impact of foot traffic on theaters’ bottom line (as underlined in the Placer.ai report), this move makes a lot of sense. But of course, every new activity needs a new system to support it. And, while a short-term fix might be to simply add new systems as you need them, you’re likely to end up with an unwieldy patchwork of solutions (none of which talk to each other) and an array of third-party teams that you are now managing.
You don’t want to spend your time battling with complicated reconciliation. It’s much better if your PoS system can support the majority of your functions, with an API integration into your ancillary activities so you can view everything in one backend.
When it comes to marketing, some of the large circuits are seriously upping their game. And while not every cinema has the budget for a campaign featuring Nicole Kidman, there are some cost-effective ways of promoting your theatre. Rich from Warehouse told CNBC: “I’ve had lots of conversations with distributors just talking about better and more efficient ways to market their films. Often, that is data marketing and paid social, better trailer placements and [putting] tickets on sale at the right time.”
Your PoS system generates a huge amount of data, which can be used to inform your marketing campaigns. Modern systems even come with Client Relationship Management (CRM) built in. This includes managing lists and creating targeted emails, which Rich calls “the low-hanging fruit” of marketing. And, if this functionality is embedded in your PoS, it won’t cost you a cent to make use of it.
Paying for lots of separate systems is expensive and time-consuming. A decent system should have lots (if not all) of the following embedded as standard:
- Online ticket and concession sales
- F&B module with advanced features for complex F&B, purchase ordering, and inventory
- CRM with the ability to quickly generate and send emails
- Digital signage, which is easily managed from within the PoS
- Versatile and easily managed promotional options and discount codes
Encompassing all of these into a single system will save a huge amount in integration and maintenance costs, not to mention hours of staff training and back-office tasks.
Some PoS systems do indeed come with hidden costs, which you only learn about later. If you’re paying separately for payment processing, licenses, or third-party online ticket sales, you could save a lot by switching to a solution that absorbs these into the overall cost of the system. Large systems that process for multiple clients can always negotiate better fees and should pass the savings on to you.
How much of your team’s time is wasted on manual processes, dealing with siloed vendors, training staff on complicated systems, and working with your PoS vendor to deliver desperately needed features?
By upgrading to a single, more advanced, cinema PoS solution, you will have one system to maintain, one support number to call, and a team that is focused on helping you save time and increase your profitability. With everything running on one system, it’s quicker to receive updates and new features. Plus, a single interface for all functions will keep things simple for your staff, saving hours of training and providing your customers with a better experience.
A modern cinema PoS system should also offer simple, customizable reporting with aggregated data for your head office, along with detailed insights for local managers. This should include accounts exports, which feed directly into your accounting systems. Quick and easy access to the right data in the right formats can save you days, if not weeks, of work each year.
It ain’t (totally) broke, but you should still fix it
It’s an exciting time for cinemas. You want to be free to go where your ambitions take you and not be held back by a system that meets the requirements you had two years ago. You also don’t want to be dragged down by limited-feature systems that end up draining money by missed opportunity costs.
Upgrading your PoS system is a daunting task and it can be hard to know where to start. To help you out, we created a list of 10 things to ask prospective PoS provider, which should help ensure you end up with a system that works for you now, and in the future.
Remember: It doesn’t have to be all or nothing. You can start small, switch out a few functions, run tests and go from there.
If you’d like to explore what your cinema PoS could look like, get in touch below. We’re here to help.