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According to Bob Ventresca, Director of Marketing, Netkey Inc, "Retailers first used kiosks to leverage their investment in e- commerce sites, connecting a company's physical presence to its online presence. When connected to the retailers' back-end systems, kiosks can be a virtual and infinite shelf for the company." This is particularly important in an environment where product assortments are evaluated on a daily basis on measurable parameters such as sales per square feet. A typical supermarket has no less than 25,000 SKU's. By allowing customers to touch and feel samples and offering products without adding shelf space or floor space, kiosks present the retailer with the best of the online and physical world.

Frost & Sullivan segments the kiosk industry by customer segments into Retail, Banking & Finance, Government, Telecommunications, Tourism, Transport & Entertainment (TTE) and Others. The retail segment continues to be the pearl in the oyster for the kiosk industry, ever since we've been tracking the market since 1997. Walmart's relentless pricing pressure has intensified competition in a retail industry characterized by clenched-fist net margins of 1-2 percent, employee turnover upwards of 50% and labor, a sizable 15% of revenues. To battle with the Beast of Bentonville, throughout the nineties, retailers hustled for growth by focusing on cost efficiency,range rationalization, inventory management and space optimization. The spate of consolidation that marked 1996-98 connived with the 'Walmart factor', resulting in a convergence of positioning strategies among the large retail chains. The focus is now on in-store experience as the differentiator.

Retailers'IT strategy has been to address two key areas of concern: high employee turnover labor costs and customer satisfaction. Kiosks when well implemented can emerge as the nerve-center of such an IT strategy.

In-store web-based kiosks and product catalogue kiosks characterize the Point-of-Information kiosks application are an efficient sales adjunct. They have an edge over store employees who may not have an aptitude for clarifying questions on technology-intensive products, in addition to up-selling and cross-selling at every opportunity and providing a consistent experience to the customer. The kiosk can be customized to communicate with customers through several languages. Kiosks thus not only enable retailers to cut the cost out of training but also to heighten the customer's in-store experience. Further, the decline of mass media and the fragmentation of audiences have led marketers to rely more on the point of purchase to communicate their product positioning.

More reasons abound. Tom Weaver, Vice President, Sales & Marketing at Kiosk Information Systems says, "Retail is a huge market and by nature is in walking distance to the public no matter where they are. Government, Gaming and other segments are more selective in the demographics they attract. In addition, there are so many different applications that can apply or can be considered retail applications. Human Resource kiosks, Point of Information, Gift Registry, Photo Kiosks, Loyalty program kiosks, Couponing kiosks that let customers look up and print coupons freeing them of the hassle of remembering to clip them at home...much more than in any kiosk vertical."

Retailers also have the benefit of economies of scale that is not inherent in other vertical markets." Frost & Sullivan calculates that the average number of stores of the top 100 US retail chains is around 1500. Challenges include retailers nursing the notion that they can pull content from their website on to the kiosk, without realizing that the chain's vision statement or latest earnings results are unlikely to enthuse the average store visitor. Pilots based on such a kiosk model invariably fail and deter further investment. Internal politics also plays a role with IT personnel sometimes unwilling to house kiosk projects initiated by marketing personnel on their network, on the grounds of security and bandwidth limitations. The greatest challenge is in convincing retailers that kiosk projects are too complex to be developed in- house. As Berens puts it, "Retailers don't go out and deploy their own POS system, they don't deploy their ATM system but they want to deploy their own kiosk system. A kiosk is a customer facing application and can be as complex or even more than their other IT projects."

Tech-averse consumers who may be conscious about approaching a traditional kiosk may feel less inhibited using these smaller devices. However, as Dave Zoerb, Senior Vice President, Frank Mayer & Associates rightly points out, "It is not so much a consumer preference as it is a retail reality. That consumers will get more intimate with these devices is a pertinent issue. However this is not a driver. The real driver for the growth of these kiosks will be the cost and availability of retail real estate and how products are merchandised."

By the touch of a finger users can gain access to product information, company services, forms and printouts for retail stores, schools, churches, city government, tourist locations and more. In a recent report by Summit Research, studies show using kiosks to provide product information remains the leading reason so many retail kiosks are being installed worldwide; 33 percent said this was their chief motive for installing kiosks at their retail locations.

 

Features and Benefits

Touchscreen interface creates user friendly experience for people of all ages and education levels

Retail information kiosks assist users in making smarter buying decision, creating more loyal customers

Kiosks in any environment increase public awareness and save labor overhead

Printing-on-demand option for information kiosks saves preprinted forms costs

Targeted loyalty offers or special promotions improve customer service as well as increase sales

Return On Investment

Self-service kiosks reduce costs by lowering employee headcount

Improves customer retention rate

Reduced costs for basic service levels

Reduces waiting in line by customer

Virtual sales assistant increases sales

Beyond the measurable incremental sales, Brock says kiosks are another opportunity to capture customer data. In a comprehensive kiosk, "you can devise content programs that inspire customers to register," he says, such as e-newsletters and loyalty programs. Even if customers do not order through the kiosk, the technology is still working to help you better target them.

In-store promotional servers that broadcast offers in real-time to customer displays allows marketers to create promotions instantly without revealing the coupon or promotion value for competitors to match. Terry Kasen, Business Unit Director, Agilysys Retail Solutions Group suggests, "Promotions can now be displayed on multiple devices throughout the store based on where the customer is shopping, day of week or time of day, and with targeted messages based on their shopping interests. With a well thought out media plan, one-to-one marketing can be enabled." David McBride, Executive Vice President of Sates, Taurus Display adds, "Interactive Displays can be purchased or coordinated by retailers. The retailers could lease the space and time to consumer products goods companies. Since these devices can be leased by retailers to multiple consumer products compaiiies, promotion of seasonal products through these displays can benefit tremendously, as otherwise it would not be cost-efficient to build the kiosks for short promotions. Such a model also facilitates evaluation of promotions in real time."

Understandability.

Signs should use terms and language that the customer can understand. Of the 16 kiosk environments evaluated in Forrester Research's 2005 "Best and Worst of Kiosk Environments" report, 10 failed the signage component based on the words they used. According to the report, clever marketing names and proprietary terms for the devices confused users, rendering the signs useless. The report recommended sticking to simple language that clearly described the kiosk's purpose.

Post-deployment marketing?

You've invested millions, in a self-service application built around a specific user/customer and a specific purpose. But assuming that the mere existence of the kiosk will ensure usage is naive. A post-deployment marketing plan can help you introduce the kiosk to your users/customers and even get them to use it.

The important thing is to publish the message in as many different directions as possible. Not only will different types of media appeal to different types of customers, but the shotgun approach gives your message its widest reach. The point is, knowing your audience and talking to them about the kiosk through traditional marketing methods can prove one of the best ways to have customers walk in with anticipation of the new technology.

For Staples, the decision to use its Website to sell products through its kiosks led to the implementation of a kiosk with keyboard functionality. Lyon says that installing kiosks was an extension of the company's existing delivery business, which enables customers to order and prepay for special orders in the retail locations. "We had the infrastructure to support the kiosks with our catalog and Web channels," he says.