Article

One country's kiosk evolution

A trio of surveys reveal the extent of changes in the German kiosk market. Numbers are increasing, but the major players have changed in recent years.

February 25, 2002 by Eckhard Reimann — Owner, ERCM

The German kiosk market is evolving rapidly, but remains a highly fragmented market and has experienced a shakeout of its market leaders.

Recent studies by Germany's HighText publishing company, consulting company Frost & Sullivan, and consultant Sylvia Kutz reveal the extent of change in Germany's kiosk marketplace.

The good news for the German kiosk industry is that growth is robust. The number of kiosks installed grew each year between 1996 and 2000, with double-digit increases three of the past four years. But with growth has come change, as the kiosk vendors that led the market just a couple years ago are now far back in the pack.

More means more

The growth in the German kiosk market is expressed in the number of kiosks deployed each year since 1996. Last year, the number was 11,120, a 27.8 percent increase over 1999, when 8,700 kiosks were deployed. Overall, the annual rate has climbed 178 percent since 1996, when 4,000 kiosks were deployed.

Financial-service companies show the greatest interest in kiosk deployments, representing 44 percent of the kiosks installed last year. Point-of-sale (POS) outlets followed at 16 percent, with marketing, fairs, and events (12 percent) and Internet cafes (11 percent) also breaking into dougle figures. In-house kiosk installation in an almost-universal concept in Germany. Last year, 97 percent of the kiosks were installed in this fashion, a figure that was parctically unchanged over 1999.

In a survey of kiosk vendors conducted in September, Kutz found that 33 percent of kiosk applications are still information systems kiosks, 24 percent are used in POS applications, and 20 percent are used for Internet access. Kutz expects reatil, banking and tourism areas to show the most growth in this area, with the government sector also experiencing growth.

Change at the top

According to a recent analysis done by HighText publishing, Germany's top ten kiosks vendors command 90 percent of the market share. But the names at the top are different then they were in 1999.

A Frost & Sullivan study cites IBM and Wincor Nixdorf as the leading vendors in the European kiosk market. In Germany, Wincor Nixdorf and friendlyway are the two top kiosk vendors currently, with 39 percent and 15 percent of the market for installed kiosk systems in 2000, respectively.

The situation is dramatically different from 1999 and reveals how the kiosk industry has grown and evolved. Heddier, which was the market leader in 1999 with a 23 percent share, now commands just three percent of the market. The same holds true for Polygon and Media Concept, which have each dropped from 11 percent to four percent market shares since 1999.

Of the roughly 50 kiosk vendors in Germany, one-third of them sold 25 or fewer kiosks annually.

New, better parts

Deployment is not the only sector of the German kiosk market where change is apparent. There has also been a significant change in kiosk hardware components since 1998, with trackballs and keyboards joining touchscreens as primary input devices.

At present, 69 percent of kiosks have a keyboard, compared to 38 percent in 1998. Trackball use has riden from 10 percent in 1998 to 26 percent.

Among other changes, LC displays are replacing older CRT technology. Currently, 44 percent of kiosks use an LC display compared to 15 percent in 1998. And about 10 percent of kiosk terminals now use scent technology. These kiosk are found primarily at cosmetic and drugstore retailers.

German kiosks are, in general, becoming more feature friendly. The percentage of kiosks with features such as a CD-ROM player, Internet access, or a Web camera has increased since 1998.

Here are a few examples, with the 2000 percentage followed by the 1998 percentage:

CD-ROM - 88 percent, 70 percent;

Internet access - 57 percent, 41 percent;

ISDN - 57 percent, 47 percent;

Card reader - 51 percent, 36 percent;

Web cameras - eight percent, one percent; and

DVD - nine percent, zero percent.

Getting the word out

Change has transformed the German kiosk market, but problems remain. The industry is plaugued by memories of past kiosk projects that failed to achieve their objectives. In addition, there are concerns over current economic conditions, that kiosk networks are expensive, that customers are unaccustomed to kiosks, and there are no set kiosk standards.

As a result, German kiosk officials are working with the German Multimedia Association to promote the kiosk as part of company's multi-channel strategies. The organization will also recommend standards for kiosk terminals, create special kiosk awards, publish a brochure on kiosk terminals and organize workshops and seminars.

At the moment about 80 people representing 50 companies have joined this working group, with others expected to join in the near future. The group will be headed by Frank G. Klimek of eTouch AG and KAUFHOF's Dr. Bettina Sunderdiek.

Eckhard Reimann is ownerof the Strategy Consulting Bureau for Interactive & Database Marketing "E.REIMANN:CUSTOMERIZED M@RKETING (ERCM)" in Oberursel (Ts) near Frankfurt/Main in Germany (http://www.ERCM.de, author of a lot of articles about multimedia, Internet, eCommerce, Database Marketing and Customer Relationship Management, editor of the kiosk specific microsite athttp://www.iBusiness.de/ekiosk, Board of the only German kiosk conference and exhibition SMARTKIOSK (http://www.smartkiosk.de) and organizer of the above mentioned "eKiosk" working group of the German Multimedia Association (http://dmmv.de).