Article

A touch of Europe

Despite a gloomy economic outlook, the European kiosk market is active, if not thriving. Government projects have helped fuel the industry. 

March 17, 2002

Recently, a member of the kiosk industry wrote KIOSKmarketplace to say that the European kiosk market had fallen on hard times. Did the gloomy opinion have any merit?

"That is true," said Jaime Silva, managing director of Porto, Portugal-based Immediata SGPS, parent company to kiosk manufacturer Cybertotems. "Some of the projects have been held by the clients because they are afraid. They want to test it but they are afraid what is going to happen with the economy."

Silva said that the change in European kiosk fortunes began with the decline of the NASDAQ in 2000. Yet, he sees prospects for an upswing.

"Probably in the beginning of next year it will change for the better," Silva said, noting that by that time some companies will go out of business, unfortunately, but those that survive will be in a stronger position to compete.

Despite the gloomy short-term prediction, plenty of kiosk projects have been launched in Europe.

Plenty of activity

Ongoing projects show that the European market is active, even if not thriving.

• Inter-Act Systems Ltd. has created loyalty programs for Sainsbury's grocers and Boots pharmacies in the UK that consist of more than 2,800 kiosks. Recently, Inter-Act grabbed its first mall loyalty contract, Meadowhall Centre, Sheffield shopping center (see "Inter-Act lands new loyalty program").
• Also in the UK, Cityspace Ltd. recently set up more than 100 i-plus kiosks in five London boroughs and a number of other cities to bring government to the touchscreen (see "Londoners finding kiosks a big i-plus").
• Kiosk consultant Eckhard Reimann reported on the increasing popularity of kiosks used to sell insurance in Germany (see "Germany: Buying insurance directly via kiosks").
• Francie Mendelsohn, director of kiosk research firm Summit Research Associates Inc., spoke highly of a kiosk application used by Czech firm Ceský Mobil. The kiosks allow customers to choose their Oskar phone service before contacting a sales representative. Mendelsohn considers the kiosks a success due to their simple design and efficiency at freeing up sales associates to close sales rather than answer customer questions.
• Mike Smith, managing director of NeoProducts Ltd., a kiosk manufacturer based in Australia and the UK, said that his company is in the process of installing 9,000 kiosks during the next year for a UK government employment services project.
• Immediata's Silva said that Cybertotems has built and installed about 800 kiosks for car manufacturers Toyota, Mitsubishi and Peugeot in Portugal. The kiosks allow customers to configure the cars they want and set loan terms before contacting sales staff. Another Cybertotems project consists of about 400 kiosks used by Portugese bank Caixa Geral de Depositos (CGD).

Based on these deployments, it's clear that kiosks are a significant market in Europe. So the question remains, what are some of the unique characteristics of the European kiosk market?

Access for all

In the U.S. and in Canada, access for people with disabilities is a growing concern. But what about Europe?

Neo's Mike Smith said that access issues are also playing an increasing role in Europe, particularly in the government sector.

"All government contracts require good disability access," he said. "The UK government has a policy at the present time requiring all departments to provide all government services by electronic means by 2005."

Smith said that while government projects will specify some types of access-for wheelchair access, access for people who are sight-impaired, or whose heights fall outside the norm, there are as yet no UK or European laws requiring access.

These laws will be coming soon. Access for the disabled is part of the European Union's eEurope Initiative. The 10-point initiative, passed by the European Commission in December 1999, contains a provision called eParticipation for the disabled. Its goal is to "ensure that the development of the information Society takes full account of the needs of disabled people."

John Purcell, vice president of marketing for UK-based Netshift Software Ltd., said, "But right now they're only guidelines, so you don't have to do them. But they do become law in 2003, so we're very much aware of them."

In addition to government, Purcell added that telcos are also making access part of their kiosk plans.

Europe: A tough sell

Economy aside, according to experts, the European kiosk market is a harder sell, especially in the retail sector, than in the U.S.

Randy Covill, a senior analyst for Boston-based AMR Research Inc., said, "Europeans want to see detailed deployment plans and detailed references. In the U.S., technology is often sold based on vision. It appears to be a cultural difference."

Silva agreed that European retailers are skeptics when it comes to kiosk projects.

"You have to prove a concept in retail," he said. "People in Europe are very afraid of not having return on investment."

Once companies are sold on a project, proof comes in the form of a pilot. But even a successful pilot doesn't guarantee a rollout. Silva estimated that about 20 percent of projects are not completed because companies decide to abandon them. His estimate includes the government as well as retail sectors.

"The projects we have lost after eight or nine months are projects that the clients didn't make," Silva said. "We normally after three to five months have already an idea if we are going to win (a bid) or not, but we don't have an idea if the project is going to be made or not."

European retailers have good reasons for fearing the machine. A legacy of failed projects nearly dealt the industry a KO.

"One of the stumbling blocks we're meeting in Europe is that a majority of kiosk projects fail," Purcell said. "And there is a black eye on the industry, which is very prevalent in the U.S. as well."

Particularly hard-hit was the retail sector.

"An awful lot of retails have been burned already on kiosks because they tried to adopt technology that just simply wasn't good enough," he said.

Often, problems were due to software or hardware malfunctions.

"I do know of large or medium size networks that are running at uptimes in the 70 percent type levels," Smith said. "Their costs of maintenance are huge, and that obviously makes them (kiosk buyers) less keen to pursue kiosks in the future."

Pieces of a whole

Because Europe includes so many different governments, languages and cultures, it's almost impossible to create a pan-European project. Applications have to take into account these differences.

"Language has been a substantial barrier to pan-European projects, which is why so many projects might be under the one umbrella but they're seen as a number of different deployments depending on the country it's done (in)," Purcell said.

These differences have spawned a localization industry. Localization refers to specialists who tailor kiosk projects to specific countries.

"Basically it means customizing software to a particular language, and it's not just the language. There are a number of cultural differences as well, because you can be saying something in English which can be offensive when there's a literal translation to Greek," Purcell said.

As a result, European project management and business planning can become highly complex, Purcell said. "Instead of having a single project management process for a pan-European rollout you could have ten. That's an awful lot of logistics and professional services."

Bet on government

Though the European kiosk market has hit some snags, one sector is rising above the others in kiosk initiatives: Government. It's government that is funding most of the comprehensive projects, such as Ireland's drive to make government access available electronically, Purcell said.

"The government (of Ireland) has allocated a percentage of every information budget from every government department from the Department of the Prime Minister right through to the Department of Agriculture. A percentage has to be spent on public access information," he said.

Discovering new worlds

As Europeans once did politically and geographically, European kiosk explorers are reaching out to claim new territories outside of Western Europe.

"We're finding second-world or developing countries to be the most receptive to public access technology in general, simply because they don't have the infrastructure for Internet penetration and they're having the same information dissemination problems that every other developed country is having," Purcell said.

Purcell said that the need to educate the public on health issues will be one particularly pressing issue where kiosks can play a role. He mentioned in particular the need for African nations to get the word out about AIDS information.

India as a potential market has appeared on the radar screens of European companies.

"India seems to be a very active market, but also a very difficult market to service for obvious reasons when you're dealing with a nation that has 15 recognized national languages and over 500 dialects," Purcell said.

The difficulties encountered by software development companies may not have to be faced with hardware manufacturers such as Cybertotems, who can work with local software companies. Silva said that he planned to open an India office by the end of this year.