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Panel points out customer advantages of kiosks

It is critical to clearly show potential kiosk deployers the power of self-service technology, according to a panel of experts who spoke this month at Retail Systems 2003.

June 23, 2003

CHICAGO -- It is critical to clearly show potential kiosk deployers the power of self-service technology, according to a panel of experts who spoke this month at Retail Systems 2003.

The panel was led by Bob Fincher, executive vice president of NetWorld Alliance, owner and operator of KIOSKmarketplace, ATMmarketplace and other trade-news portals. NetWorld and its Kiosks.org Association developed with Moonwatch Media and Retail Systems the tradeshow's first ever kiosk and self-service pavilion. The panel spoke on customer perceptions of self-service technology in the pavilion theater.

Alan Fryrear, NetWorld chairman and executive director of Kiosks.org Association, said the kiosk and self-service pavilion was a successful venture. "The pavilion program has proven to bevery rewarding for ourparticipating members. We will expand our involvement during 2004." Fryrear said the organization is researching the possibility of participating in future vertical shows.

Panelists at Retail Systems included Scott Hallihan, manager of consumer access solutions and kiosks for IBM Corp.; Robert Ferguson, manager of retail-consumer goods strategy and solutions for Intel Corp.; Fiona Naughton, global marketing manager, retail for MEI; and Joe Barboza, president and chief executive officer of Cyphermint.

Fincher opened the panel with statistics from analyst firm Frost & Sullivan that the market for kiosks will double in the next eight to 10 years, with 50 percent of the deployments taking place in the retail industry.

Following are the questions asked by Fincher and audience members, along with the panelists' responses:

Executive panel at Retail Systems

Why do customers appreciate self-service?

Naughton: Individuals are better informed today. They want to do their own thing. They value privacy. And they think self-service is quicker because they are helping themselves. They enjoy the experience.

Ferguson: It's also an issue of control. Customers are comfortable with the Web and with technology.

What are the top two or three issues to consider before deploying kiosks?

Hallihan: User friendliness is the key. We recommend that the kiosk actually be `disguised' so as not to look like a computer. Have no keyboard, if possible. People can sometimes be embarrassed to walk up to something that looks intimidating. Minimize the amount of text, maximize the use of graphics. If you have buttons, make them look like buttons, very 3-D. Customers shouldn't have to click more than five times to get information. Limit choices. It' s not like a Web site that offers hot links. The kiosk has to have very clear value to the customer.

Naughton: Location is another issue. Don't place the kiosk in an area that has a lot of traffic so the user feels like he's in the way. Don't put it in a place in which users feel watched, or unsafe.

Ferguson: Make sure that users can add on other purchases, too. Look at potential business alliances, like selling movie tickets in an electronics store. Think about new categories that go beyond traditional retailing.

Hallihan: Make sure the kiosk doesn't blend into its surroundings. It has to get noticed.

Barboza: You can repurpose a Web site so that you present a consistent look and feel. But keep it simple.

Naughton: Keep applications intuitive. Make sure there is a natural flow. Self-checkout has taught us lessons about letting consumers bag their goods in the same area that they scan them.

How large does a company have to be to use kiosks?

Barboza: Large enough to understand your customers and have a desire to attract new customers. You can have two stores or 1,000 stores. It's the intent of the project that matters, not its size.

What is the best type of transaction for self-service?

Naughton: Any transaction that can be conducted simply and in a straight-forward way. Quick is the key.

Hallihan: You can actually have multiple applications on a kiosk. A kiosk is a big investment so you want to make the most of it.

Ferguson: Right. You can have after-hours learning or training for employees on a kiosk, and customer-facing applications on the same machine. It's one investment in self-service.

What are some early results on customer acceptance of kiosks?

Barboza: We have 900 Vcom units installed in 7-Elevens now. We'll have 2,000 installed by the end of the year. 7-Eleven had been seeing about 2,000 transactions per store per month before the kiosks, now it's 3,500 transactions per store per month.

Naughton: With some of our customers, within six months of installing self-service units, 45 percent of consumer transactions are conducted via self-service. Plus customers are buying new items because of the privacy factor kiosks add.

Ferguson: We see merchants using kiosks for consumer-loyalty programs and real-time couponing.

Hallihan: The biggest resistance is trying the kiosk for the first time. But offering on-site staff and marketing to assist shoppers helps eliminate that intimidation.

What are some mistakes made on kiosk deployments?

Hallihan: The most costly mistake is trying to design your own enclosure. You might get it right on a few, but what do you do when it comes time for mass rollout? It's best to hire a reputable enclosure firm.

Barboza: The biggest mistake is not realizing why you're doing the project in the first place. Find experienced people who know the business to help. Spend the time and effort it takes to know the system.

Ferguson: Not building in modularity. If the project isn't flexible, you can get painted into a corners. Wireless connectivity is one solution.

Naughton: Don't let the technology drive the market. It's the consumers and the brand that the kiosks are here to serve.

Hallihan: Look at the project from the consumers' perspective. If it's not compelling, they won't try it.

Barboza: Think of the airport example. People have to use a credit card as an identifier at check-in kiosk. But people aren't comfortable with that. Plus, 47 million consumers don't have credit cards. Now the airlines will have to rethink that idea.

Is the ability to accept cash desirable and practical on kiosks?

Naughton: If the transactions your customers perform today are cash, then yes. Cash is great for impulse buys, low-value buys and secret purchases. It can be practical, too. If cash moves from the customers' pocket right into a kiosk, it keeps your staff good and honest.

Barboza: Forty percent of 7-Eleven customers don't have credit cards. Cash is essential to them.

Hallihan: In fast-food establishments the customer puts in cash, and instead of giving change back right away, the kiosk can ask if the customer wants to "super-size" a meal. It's a chance to upsell.

What are some specific cases in which kiosks have improved business processes?

Ferguson: Ticketing at stadiums and theaters. Listening and viewing stations.

Barboza: ATMs. When is the last time you talked with a teller? HR is huge, too.

Naughton: Kiosks for cellular phones. Customers can review contracts, download ringtones, get top-ups.

Hallihan: Previewing and finding movies or music. Also, digital-film processing.

What are critical success factors for a kiosk project?

Hallihan: Making sure the kiosk project is not a stepchild. Get buy-in from everyone in the organization, from IT to marketing, even down to the store level. If employees are not part of the project, they might sabotage it. Also, get help from a kiosk company with a good track record. Get marketing support. And make a plan to update content, and effectively manage the kiosks remotely.

Naughton: Stay pragmatic and realistic about the project. Don't present this as the savior of your business.

Hallihan: Have an attraction loop inviting people to try the kiosk. Make it very obvious that the kiosk is interactive.