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NACS 2004 shows promise for kiosks, C-stores

The Las Vegas show made it clear that several issues are driving the need for kiosks in convenience stores. Among them are falling gas and tobacco margins, employee turnover and a customer base that includes many underbanked individuals.

November 22, 2004

LAS VEGAS - Food service is hot, with the fast-growing trends of made-to-order sandwiches and meal replacement items. Kiosks are designed for user convenience, making them perfect fits for the C-store market.

NACSSHOW 2004, which is hosted by the National Association of Convenience Stores and was held in Las Vegas Oct. 17-22, brought together owners, buyers, distributors and manufacturers interested in the convenience-store business.

Even

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with more than 1,400 exhibitors at the show, I focused my attentions on the handful of kiosk exhibitors who were showcasing their products to the show's 22,000 attendees. Among those kiosk exhibitors wereLivewire, KIS, TouchPoint Solutions, Instruments & Equipment and Mitsubishi Digital Electronics America.

Read more about NACS ...

Kiosks and C-stores

Jeff Lenard, director of communications for NACS, said the purpose of using kiosks in the C-store market is twofold - to offer speedy service and to cross-market to the C-store's traditional fuel-only customer.

According to Lenard, customers in any store want a one-stop shopping experience. For example, he pointed out that it's not unusual for pet and craft stores to sell cold drinks and candy. "Everyone is a convenience retailer," he said. "Blockbuster is competing with convenience stores, so why shouldn't convenience stores compete with Blockbuster?"

"Everybody is trying to capitalize on that one-stop shopper," he added.

Lenard also noted that kiosks help diversify a store's customer base. "You don't want to lose your traditional customer, but if you can expand the customer base, you can sell more, or have the potential to sell more," Lenard said.

From pennies to cell phones

Coinstar is known as the pioneer of coin-counting kiosks. Now, with its subsidiary, CellCards of Illinois, it also is a leading provider of electronic payment products and services.

In fact, CellCards announced that its e-payment retail locations have more than tripled, from 500 to approximately 18,000, over the last year. The company's spokesperson noted that CellCards credits the growth to key acquisitions.

Steve Verleye, general manager of e-payment solutions for Coinstar, said the growth of wireless technology over the next five years, according to one report, will be almost exclusively because of prepaid phones and prepaid phone minutes (top-ups).

"More and more consumers are doing top-up transactions," said Verleye. And Verleye noted that it's common for top-up transactions to be completed at C-stores. "When you start to get dozens of transactions a day, labor becomes an issue," he explained. "The retailers want to sell services using a kiosk so consumers can top-up their phone, pay a bill or complete other types of transactions away from the cashier."

Verleye noted that in the United Kingdom, 70 percent of wireless phone users are prepaid customers, compared to only 7 percent to 10 percent in the United States. His company's 100 kiosks in the United Kingdom each average 30 to 60 transactions a day, making the kiosks vital, he said.

"At that rate, you are going to want a kiosk instead of a cashier-aided transaction," Verleye said. And more complicated transactions, such as bill payments, which typically involve several minutes of a cashier's time, are ideal for a kiosk solution.

The Coinstar Prepaid Center, for instance, is designed for use in C-stores as well as universities, check-cashing stores, payday loan companies, malls, airports and subways, Verleye said.

Shared revenue streams

Chris Peter, marketing director for St. Clair Interactive Communications, demonstrated a kiosk that offers C-store owners 11 different revenue-sharing streams.

With the solution Peter showed, users could order gifts not typically found on C-store shelves, like cakes and flowers, and have their gifts shipped to the store. The other revenue streams include ticketing, Internet access and couponing.

We don't care about the 70 percent who say 'no' to suggestive sale on the kiosk. We care about the 30 percent who say 'yes.' -- Michael Johns , vice president of sales for Indermedia Kiosks

Peter also discussed St. Clair's recently launched gift-card kiosk. "You can walk into a mall with 200 different stores and purchase a $50 gift card for a specific store or for use within the entire mall."

The kiosk includes a four-color printer and encoder as well as dispenses the gift cards and accepts payments. Biometric technology might be incorporated into the St. Clair kiosk in the future, Peter added.

Outdoor payment services

K.K. Walker discussed the Wincor Nixdorf's recently released NAMOS total software solution, which integrates the back office with point-of-sale and fuel-pump systems. "It's significant because it is a global solution," Walker explained.

Walker also discussed the new NAMOS paylane outdoor payment kiosk for fuel and car washes. Wincor Nixdorf announced this week that it signed an agreement with France's Total S.A. to supply 4,500 outdoor kiosks in service stations throughout Europe.

The kiosk enables payment by card at the pump any time. And the large-format displays can be used to advertise services like car washes.

Mini self checkout

Self checkout is migrating from groceries to C-stores. Jerry Donahue of NCR's self-checkout systems, showed the NCR FastLane mini kiosk, which crunches its features into a 36-inch by 29-inch device.

Donahue noted that while C-store owners like the idea of self checkout, they wanted more "bang for their buck." In response, NCR enabled the mini kiosk to offer prepaid minutes, check cashing, calling cards, gift cards, lottery tickets, money orders and to allow for ATM withdrawals. Additional functionality also provides more revenue for the store owner, while conveniently offering services to customers, Donahue said.

Increase food sales

Michael Johns, vice president of sales for Intermedia Kiosks, showcased his company's food-ordering software, which typically runs on NCR or IBM hardware. And Johns pointed out that the kiosk upsells and increases sales more consistently than employees do.

The use of bright graphics and pictures makes the software easy to use. Johns pointed out that the kiosk offers a complete range of choices such as several toppings and condiments that an employee may not think to offer. The kiosk software also promotes signature sandwiches, combo meals and specials.

"We don't care about the 70 percent who say `no' to a suggestive sale on the kiosk," Johns said. "We care about the 30 percent who say `yes.'"

Johns explained that good software design can boost food sales. "Items on the first page (of the kiosk) outsell items on other pages by 3 to 1," Johns said, adding that items on the top left of a page typically outsell those on the bottom right.

Intermedia Kiosks' software incorporates nutritional information and voice-overs, too. The nutritional information is updated as a customer changes an order. Voice-overs are done in English or Spanish.

Johns said the NACS show turnout was positive.

"When we came to NACS three years ago, we were a novelty," Johns said. "Most of our leads we saw last year at this show," he said. "NACS is a very good show for us."

[Editor's note: Info Touch Technologies became Tio Networks in April 2006.]