Article
Economic uncertainties don't quell positive 2019 outlook for interactive kiosks
The kiosk industry expects record growth for the coming year, notwithstanding uncertainties about the stock market and the impact of President Trump's trade tariffs on some raw material costs.
January 7, 2019 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times
Expectations couldn't be higher for the interactive kiosk industry this year, as noted in part one of this two-part series, but 2019 still has some uncertainties and possible challenges. The stock market gave some economists the jitters at the end of 2018, with some going as far as predicting an economic slowdown. President Trump's trade tariffs have also resulted in higher raw material costs that could affect kiosk production costs.
Despite a positive outlook for 2019, Chris Gilder, CEO of Meridian, does not discount the challenges that lie ahead. He was one of several observers to note that trade tariffs have resulted in kiosk material cost increases.
"We believe the tariffs need to be looked at again as I do not think they are necessarily helping manufacturers in the U.S.," Gilder said in an email interview.
Tom Neiman, vice president of worldwide marketing at JCM Global, a provider of payment technology, agreed. "The ongoing tariff situation has impacted and continues to impact some of our products, and we are constantly looking for ways to mitigate the impact to our customers," said Neiman.
JCM Global's biggest challenge, however, is educating customers about new products, said Neiman. "We will be unveiling many new and innovative products in 2019 that can benefit our customers, so our challenge, if that's the right word, will be getting face-to-face with each customer in our many segments around the world and showing what we've been working on and their benefits to our customers," he said.
Mike Hamilton, director of permits, enforcement and enterprise platform management at T2 Systems, which provides parking management technology, acknowledged that the price of steel has increased as a result of trade tariffs, but he doesn't see this having a significant effect on costs for his company. Most of the cost in a parking kiosk is in the touchscreen, the card reader, the coin acceptor, the printer and the connectivity, he said. Only about 10 percent of the cost is in the cabinet and bracket.
Chuck Lewis, vice president of Palmer Digital Group, also agreed that tariffs have impacted material costs. "The steel has gone up a bit and we have been able to absorb that cost increase, but the aluminum cost has gone up almost 0.70 cent a pound," he said. "As a result, when I have a client that asks for the price on an aluminum kiosk, I persuade them to go to steel due to the price increase in aluminum." Nevertheless, Lewis is upbeat about 2019.
Zytronic, a manufacturer and developer of projected capacitive technology touch sensors that is based in the United Kingdom, does not expect the U.S. tariffs to change the company's positive outlook, according to Ian Crosby, vice president of sales and marketing. "While we're not immune to the effects of higher material costs, designing and manufacturing our products in-house keeps us somewhat insulated from increased tariffs," he said. Crosby added that the company is not distracted by speculation about a recession in 2019.
Stock market less concerning
Stock market volatility has not been a concern for most kiosk industry observers.
"Historically, downturns, in general, have not affected our business," said Meridian's Gilder. "It's certainly something we're aware of and keeping in mind, (but) we do not anticipate that it will have a significant negative impact on our aspirations for the year."
Hamilton at T2 Systems admitted that he is concerned about the stock market, but he nonetheless expects 2019 to be a good year for parking kiosks due to what he sees as "good fundamentals."
"There's this weirdness (in the stock market) giving me pause," Hamilton said. But he still expects last year's 5 to 8 percent increase in business activity to continue in 2019. More and more municipalities are converting from free to paid parking as a way to generate revenue, a trend that began a few years ago, he said.
Steve Snyder, president of the U.S. division of Hectronic, a Germany based provider of parking management solutions for both on-street and off-street parking, is not concerned about any downward economic indicators since municipalities need revenue, market conditions notwithstanding.
"The one thing about our product is we bring additional revenue into municipalities," he said. In addition, "The payback (from parking kiosks) is relatively quick," he said; usually between six to nine months.
The euro's tumble in relation to the U.S. dollar over the past year has actually been helpful to companies like Hectronic that manufacture their products in Europe, Snyder said. "It will allow us to bring the product in at a lower price," Snyder said. "It directly affects the bottom line." The only reason that this won't give his company a competitive edge is that most of his competitors are also based on Europe.
"I don't see anything but growth in our future," said Snyder. He pegs U.S. growth between 20 and 25 percent in 2019. He also expects growth in Latin America.
"While it (the stock market) does create some unknowns, we are not very concerned," said Hope Nieman, chief marketing officer at Tillster, a digital ordering and engagement platform for restaurants. "We have been able to show our tools to deliver more robust top line for restaurants, but equally important, an ability to derive greater wallet share from their customers. This has made our products and services 'must haves.'"
Tillster's greatest challenge, according to Nieman, will be handling needs in multiple global geographies. Where Europe used to be the major player for restaurant kiosks, the company is now seeing needs and use cases all across the globe.
Technology drives positive outlook
Nieman also pointed to the interest that new technologies are bringing to customers. Biometric identification, whether facial recognition, fingerprints, retinal scan or others, is removing friction in remembering orders and payments, she said.
Single user identity technology is also bringing new opportunities, Neiman said. "We have started to link several of our tools through the kiosk," she said. "For example, loyalty programs or personalized coupons that have been available on mobile apps or at the counter are now fully integrated with a single user identity on mobile, desktop, counter and kiosk. Your account, including past orders, loyalty and personalized programs, can very easily travel with you."
Dave Adams, senior partner program manager at NEC Display Solutions, also has high expectations for 2019 because of new technology.
"We are looking at QSR and outdoor applications in the smart city and transportation markets," said Adams. "There are obvious efficiencies brought on with labor cost, order accuracy, consistent messaging and upselling. Adding loyalty programs and analytic based learning keeps customers coming back for the efficiency and customized response."
Adams is especially upbeat about the hospitality market.
"The combination of loyalty programs and self check-in in the hospitality market make applications for kiosk a natural fit," he said. "It also allows for us to include our facial recognition and analytics learning platform for a more complete solution. Not only does it make for a better experience for the customer, but improves the data that the vendor can collect, allowing them to better run their business."
About Elliot Maras
Elliot Maras is the editor of Kiosk Marketplace and Vending Times. He brings three decades covering unattended retail and commercial foodservice.
Included In This Story
Palmer Digital Group
Palmer Digital Group specializes in indoor and outdoor digital kiosks and kiosk enclosures. Palmer Digital Group leverages 40 plus years of digital enclosure fabrication capabilities from its highly reputable parent company IEC. PDG manufactures digital kiosk solutions for virtually any industry from QSR to retail to transportation.
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