Article

Finding a niche in kiosk building

For sheet metal fabricator Accra-Fab, the kiosk industry presents a golden opportunity to diversify. For the kiosk industry, the company's interest in kiosks may be a good sign.

October 23, 2002

Evidence of a kiosk industry resurgence is sometimes difficult to find. It might come in small, anecdotal doses, such as word of a long-awaited deployment finally hitting the street. Signs of the industry's economic recovery are sometimes subtle, such as this story.

It involves an established manufacturing firm seeking to diversify, and finding that the kiosk industry is an ideal fit for its capabilities.

On the other hand, bleak news on kiosks seems to be everywhere. There have been dozens of reports of kiosk-related companies struggling to survive. Attendance at kiosk-related trade shows has been sliding.

A report by Frost & Sullivan released earlier this year claimed the world's interactive kiosk market declined by 41.2 percent from 2000 to 2001.

For John Barnes, director of marketing and business development at Accra-Fab, a sheet metal fabricator and supplier of kiosks to nine clients, the industry's future couldn't be brighter. Accra-Fab's story is certainly one of those sunny anecdotes that just may signal that the industry's decline is nearing an end.

"The kiosk industry is really moving forward," he said, speaking from his office in Accra-Fab's 155,000-square-foot manufacturing plant. "I did my own market research. Of everything I saw, kiosks were the bucket of gold we could go after."

No barrier to entry

Barnes joined Accra-Fab on Dec. 17, 2001. His assignment was to help the sheet metal fabricator, which already had clients in a number of business sectors for building metal enclosures and containers, find a way to further diversify its clientele. The 22-year-old company, which once employed more than 500 people, has just under half that number on payroll today. While the company is strong, it could clearly ramp up. So Barnes found a niche.

He signed his first kiosk client a month into his job.

"I hit the streets and talked to major kiosk guys. I saw information kiosk terminals used by companies in a variety of settings," Barnes said.

Coinstar kiosks line the factory floor at Accra-Fab.

A year ago, kiosks weren't a part of the working vocabulary on the production floor in Liberty Lake, a suburb of Spokane, Wash. Sure, there was some work being done for one client, Coinstar Inc., which had become an Accra-Fab customer well into its 10,000-machine strong deployment of kiosks that count coins in grocery stores.

Barnes, a former marketing executive for a software firm, started researching the kiosk industry as soon as he arrived at his new job. He spent a lot of time on the Internet, made a lot of phone calls to industry leaders, and went to KioskCom, the industry's largest gathering, in March.

Convinced of the industry's potential, Barnes helped organize a kiosk division in-house along with company president Don Hemmer and chief financial officer Greg Konkol. The new division included design engineers and customer sales staff whose assignment was to work with customers to design and manage the production of kiosk enclosures fabricated from sheet metal. His customers are not the deployers themselves, but kiosk providers who don't have manufacturing capabilities.

One of his customers is MTek Kiosk Inc., a Portland, Ore.-based company that develops custom applications for retail clients. David Thibeau, vice president of sales, said he was referred to Accra-Fab when he needed a sheet metal provider.

"What was unique for us is how their internal design people give you a complete package," said Thibeau, who said he's currently working with Accra-Fab on several pilot projects. "With some others, you need a third party to do the design."

Finding a market

Barnes said the company is working with several kiosk clients on projects that, for now, must remain confidential. He said the process of creating a kiosk at Accra-Fab includes meeting with members of his kiosk team, designing and building prototypes, and considering ADA compliance, ease of maintenance and peripheral placement.

"I was floored at the lack of companies that could do everything we could do when it comes to design, manufacturing and assembly of a kiosk," he said.

Ben Wheeler, sales manager at AM&D: METALfx, a contract manufacturer of metal and wood kiosks, agreed that the number of kiosk manufacturers is small, for now. Wheeler, whose Willits, Calif., plant has 316,000 square feet, predicts a number of newcomers will get involved in kiosk manufacturing soon. METALfx began its kiosk business in 1999.

"With the entry of companies like Accra-Fab and METALfx into the industry with real in-house manufacturing capability in both metal and wood, the industry is definitely going to change," he said. "I hear about manufacturers looking to diversity their operations all the time."

Wheeler said he knew of at least five manufacturing firms, currently unknown to most in the kiosk industry, that could get involved.

"Ultimately, the big boys are going to get into the industry. The customer will have the ability to go directly to manufacturers that have the ability to do projects from start to finish. That hasn't always been the case," he said.

Barnes said the percentage of Accra-Fab's revenue from the kiosk sector has risen from 5 percent of total revenues before he arrived to between 10 and 15 percent today. He thinks kiosk manufacturing could represent a quarter of the company's income in 2003.

Accra-Fab is a privately held company and does not disclose revenue figures.

Barnes is enthusiastic about the future of kiosk production at Accra-Fab. He said that getting involved in the industry hasn't been difficult.

"I think some companies understand the firepower a kiosk program can give them, and you'll see a major jump in the market," he said. "It will be a legitimate market with a lot of players."