Article

KIOSKmarketplace asks: In this economic climate, what changes will kiosk buyers be making?

Our experts give different forecasts of how kiosk buyers will cope with a difficult economy.

February 21, 2002

Periodically, KIOSKmarketplace questions industry leaders on the issues. This time, we asked, "Given the current economic climate, what changes would you expect kiosk buyers to make in their kiosk projects?"

Here's what they said:

John Purcell, vice president of marketing, Netshift Software Ltd.:

I do not think that there will be a noticeable effect on most vertical markets, as many of them are pursuing kiosk projects to derive specific business benefits, namely increases in revenues or decreases in costs.

The kiosk industry itself (i.e. suppliers and service providers), will see a period of consolidation where the weaker kiosk companies will fold and some of the medium-to-larger organizations will merge and/or form strategic alliances.

Because the industry still suffers from a high rate of failure when projects are deployed, NetShift has seen retailers, government users, telcos and many others decide to finally "bite the bullet" and bring in the professionals with the core competencies required to deliver projects.

As long as the organization selected to deliver the kiosk project to appropriate success criteria has the required skill set and experience, we should see continuing, steady growth in the kiosk business, especially in the EMEA (Europe, Middle East and Africa) markets and among second-world, or developing, countries.

Craig Keefner, publisher, Kiosks.org:

There are at least three ways that kiosk deployers investigating or in the process of implementing kiosk systems might react, all of which impact companies providing services to support those implementations.

Case 1: In some ways the current economic climate is very favorable for good implementations. The soft light of looser budgets and "read it in a magazine" concepts has been replaced with the much harder light of reducing expenditures and fully quantifying the return on investment the kiosk application provides.

Also, when many companies are cutting back on service and initiatives, successful competing companies strategically capitalize on their competitors' lack of momentum and determine what's involved in enlarging "their space."

More specific requirements and better-considered projects are started and implemented. Projects in progress that have companies with proven track records from the beginning have made sure that all necessary considerations and parameters are set. The project will continue smoothly, thanks to that sort of foundation.

Existing kiosk applications might be upgraded and refurbished (i.e., given new enclosures, etc.). Good companies already know down to the cent how much money a kiosk makes for them. They can figure out if it makes sense to make these changes.

Case 2: A certain number of companies will slow down timelines, trim pilot requirements, negotiate harder and renegotiate. Some projects may see high quality providers with proven track records get replaced with untested providers looking to build a track record. There will probably be some under-bidding in the process. Substitutions of higher quality materials with lower cost materials will occur.

Case 3: Projects are delayed or suspended until such time as conditions improve. This is unfortunate, but lightning bolts from the top (or the board of directors) can definitely freeze these types of projects. There have already been many of these.

These type of stoppages create gaps that other companies may attempt to co-opt, either through new well-thought out projects (as in Case 1), or by looking at an existing infrastructure to see how it can be leveraged or repurposed incrementally in ways that make sense.

An example might be where devices used only during regular business hours are modified to serve an after-hour function.

Tim Peterson, director of kiosk marketing,NCR Corp.:

Kiosk buyers in today's economy increasingly need to deliver a quick return on investment and assure long-term operational efficiency and investment protection. They are acting on these concerns in the following ways:

• Focusing on applications that provide clear and readily measurable ROI. One good example is a self-serve bill payment kiosk, which allows sales or support personnel to focus more time on generating revenue or addressing customer issues. Applications that draw more traffic to a store by saving time for shoppers (e.g., deli ordering and self-checkout kiosks) also show good payback results.
• Looking for rugged, dependable kiosks and reliable life cycle (break-fix) support.  Kiosk buyers are learning to avoid low-cost devices that can't stand up to hard use in a retail or public environment, and that are not backed by a qualified nationwide or global service organization.
• Selecting a kiosk platform that is flexible and allows for expansion. Buyers are looking to the future as well, investing wisely in robust kiosk environments that can be put to new or additional uses as their businesses change and grow.
• And finally, buyers need to convincingly cost-justify the benefits of a proposed kiosk project before beginning. Business impact modeling (BIM) services can help them do this. BIM services must be vendor-neutral, utilize the buyer's own operational data (e.g. location traffic volumes, average transaction size, etc.) and provide a clear, well-organized picture of anticipated revenue enhancement, expense reduction, and gross margin/profit improvements.