Article

Digital signage & coupon kiosks aim for redbox-like ubiquity

Coupon Express digital signage kiosks are gaining steam in their drive toward market penetration.

June 19, 2011 by Christopher Hall — w, t

The company behind a combined digital signage-advertising and coupon-dispensing kiosk solution has set its sights sky high for its signature product.

PSI Corp., the company behind the Coupon Express kiosk, has made two substantial announcements in recent days, and the company's CEO said in a recent interview that PSI executives want their kiosks to be as easy to find as a certain color-coded kiosk success story.

"We hope to be as ubiquitous as the redbox and the green box," PSI CEO Eric Kash said, referring to Coinstar's DVD-rental and coin-counting kiosks that only seem like they're in every grocery store in America. "That is our goal."

But the real value behind the combined solution may be as much its ability to localize advertising via its digital signage display and to quickly provide brands and retailers with redemption information

Colorado Springs, Colo.-based PSI Corp. today announced the signing of a master lease agreement with Yellow Box Leasing LLC, the terms of which make available up to $1.25 million in equipment lease financing for PSI's Coupon Express Kiosks, the company said.

Today's announcement comes hot on the heels of Friday's announcement that PSI Corp. had signed a strategic marketing and distribution agreement with "one of the largest food distributors in the country," according to Kash.

The agreement announced today gives PSI "significant latitude" in its business plan by providing access to off-balance-sheet capital for the company's "aggressive expansion plans," according to Kash.

"The ability to expand our number of kiosks from 65 currently to over 300 during the life of the agreement gives us a great opportunity to expand our footprint," he said in today's announcement.

Roger May, the managing member of Yellow Box Leasing LLC, said in today's announcement that his company is "confident in CE's ability to attract advertisers, retailers and users of this technology."

"We have done a fair amount of due diligence in this space and we believe that Coupon Express has demonstrated an ability to expand significantly and successfully — evidenced by the execution of some very key contracts with major players in the marketplace," May said.

The contract PSI announced Friday was the result of eight months of due diligence, customer and vendor focus groups and technology assessments by the unnamed distributor, according to the company.

The food distributor in question has an "integrated platform" and does $25 billion a year in business, Kash said in an interview, and it is known as a food wholesaler and food distributor, as well as being the owner of several retail chains. While the contract has been signed, PSI hasn't yet been cleared to release the company's name, Kash said.

"With this distributor's market presence and its broad array of retail establishments served, combined with their extensive geography, this marketing agreement will afford PSI Corp a unique marketing opportunity for its Coupon Express kiosks," he said in the earlier announcement.

The Coupon Express kiosks can either print out coupons in black and white on thermal paper, or if integrated with the store's loyalty program, can apply the discounts at the point-of-sale (via a third party for PCI compliance) through the customer's loyalty card.

And while the company boasts of higher coupon redemption rates (30 percent versus 1.4 percent via traditional coupon channels) and faster coupon reimbursement (14 days versus 60), what really differentiates the Coupon Express kiosk in the marketplace is its abilities to nearly immediately inform brands and retailers of coupon redemptions and to target market specific items via its digital signage, Kash said.

In most groceries, when a coupon is redeemed it takes the retailer more than three months to get that information, according to Kash.

"To know that that store had moved that unit takes 97 days," Kash said. "With our kiosk, which is a self-directed kiosk, when you use our coupon in our all-electronic system, you use your loyalty card, and as soon as you use that loyalty card, that minute, (the brand) now knows you purchased that product – not you-you, but that store."

And the digital signage component also adds a dynamic ability to in-store advertising, Kash said.

Kash posed a hypothetical example of a grocer sitting on 200 pounds of pork loin that will go bad in two days, when the store normally sells only about 50 pounds a day.

"You've got a problem, right? So right now what you do is you take a crayon and write 'half off' by the meat department, right?" he said. "You can on our system immediately launch your own local ad in that store digitally, and when you get to the EOQ (economic order quantity or inventory) level, you can pull the ad, so now instead of throwing stuff out, you're able to move inventory on a dynamic basis."

For longtime kiosk industry analyst Francie Mendelsohn of Summit Research, the information-providing capabilities of the kiosk are what would set the Coupon Express kiosk apart from most coupon kiosks, which have been around for a long time and are of increasingly decreasing utility.

"On paper, (coupon kiosks) are a good idea, but, increasingly, why do you need a kiosk? Why can't you just show your coupons on a smartphone?" she asked in a recent interview.

The Coupon Express kiosk theoretically goes that route one better, by transmitting the coupon to the point of sale itself.

And the kiosk's nearly-instantaneous transmission of coupon-redemption numbers could be a great value to retailers, she said.

"That, to me, is a very cool thing," she said. "Practically the same day you can drill down ... and target your marketing accordingly."

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