Australia’s Coates Brings Its Digital Signage Offer For QSRs To North American Market

October 3, 2016 by Dave Haynes

Leo Coates (center), and Haynes (far right) eyeballing bar options at recent Coates open house in Chicago.

It’s a big reach for an Australian company to establish a foothold in North America, particularly in a hyper-crowded market like digital signage. But that’s what a Sydney-based company called Coates is doing, with aims at building up a client list in the QSR business.

The company opened its US headquarters last week in Chicago – not uncoincidentally the global headquarters city of McDonald’s, Coates’ biggest client. Coates is also active in more than 35 markets around the globe, with other offices in Australia, China, India and Japan.

The company does software, kiosks, drive-thru pre-sell and menu displays and pretty much anything else associated with visual communications for quick serve restaurants.

The flagship is the company’s CMS, called Switchboard, which is heavily driven by data and a close parallel to the sort of tailored one-to-one marketing of online retail, except in bricks and mortar. The platform ties into multiple Point of Sale systems, has a deep analytics engine to look at things like up-sells and conversion ratios, and uses emerging tech like license plate recognition in the drive-thru lane to hyper-target messaging.

I didn’t know the company at all until a few weeks ago, when I met one of the transplanted Aussies here to open up the U.S. The company invited and brought me down to its Innovation Lab on Madison Street, west of downtown, for its launch and open house late last week. They had a pile of partners on hand, as well as several people from McDonald’s having a look at what the company does.

A couple of things struck me …

1 – The CEO, Leo Coates, is all of 32 years old. He bought a long-running retail merchandising company from his dad when he he was 24, and has rapidly built up the digital side of the business and the increasing global footprint. I did a podcast interview with Coates and that will be up sometime this month.

2 – Along with what you’d expect in a QSR-centric lab – like self-order kiosks and menu displays – Coates was showing off its virtual reality capabilities. I am a MAJOR skeptic of VR for consumers in retail and other public spaces, but the Coates guys explained what they were showing was not QSR customer-facing. It’s for operators – with an HTC VR headset, gamer graphics and a lot of RAM showing a franchise owner or chain executives how a store would look with displays and kiosks, by placing them virtually in a store and allowing them to even do things like open and look inside a kiosk enclosure. THAT, you’d think,  would intrigue the hell out of some QSR store designers who likely rely on concept and CAD drawings and 3D fly-throughs, or have to build replica test stores in warehouses.


Open house guest checking out QSR store design using virtual reality

Coates, as is increasingly the case with software and solutions providers, offers pretty much a turnkey service for customers, though it is building up a North American partner ecosystem to help in areas such as solid state media players, outdoor displays and BLE beacons.

“We provide an end-to-end solution for our clients,” Coates told me in our chat. “For example I’ll use the Australian market today. My accent’s a dead give away. That is the part of the world where our head office is and where we’re from. What we typically do is we’ll work from a design perspective on the hardware front, and determine what solutions they need in their restaurants. We’ll work from proof of concept through the design. We manufacture in China and Taiwan. We’ll have assembly lines set up here in the U.S. but we’ll take applied pieces of technology. We’ll design that in-house to best suit our customer’s requirements. We’ll manufacture to their needs and we’ll provide that hardware service.”

“From a software perspective,” he added, “we really take today’s technology and we apply it back to our customers and that’s where I think we differentiate a lot, in that we build solutions tailored to their business, and apply technology back to their business, and do it well.”

The company has 10 people in its Chicago office, four more in the process of being hired, and six more targeted to be hired by February, bringing US staffing up to 20. There are 135 people globally, as of now.

Interesting bunch. I liked Coates’ energy, and the young, motivated crew he’s mostly brought over with him to the U.S. The focus on data and integrating with systems is smart and likely critical.

Obviously, the company is after McDonald’s business in North America, piggybacking on what it delivers elsewhere. But there are incumbents like Stratacache to dislodge, which will be no small task. However, Coates says its focus goes well beyond servicing just the Golden Arches.

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