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Retail kiosk potential - Part Two

In the conclusion of a two-part series, leading kiosk industry consultant Francie Mendelsohn looks at issues retailers grapple with in implementing and maintaining kiosks. She also offers her thoughts on where the retail kiosk market is headed.

February 18, 2002

A well-respected technology expert and consultant to the kiosk industry, Francie Mendelsohn heads Summit Research Associates Inc. She has worked as a programmer, systems analyst, computer specialist and project manager. She is a frequent speaker at conferences and seminars throughout North America, including KioskCom, COMDEX, ComNet, FOSE and IDC briefings.

Not every retail kiosk project succeeds. By the same token, not every project fails. Quite often, the difference between those two courses is a matter of navigation. Companies that bring a solid game plan to the table and are prepared to maintain their machines and keep staff well trained usually have the edge.

In the final part of a two-part series looking at retail kiosks, the focus is on customer-loyalty programs in the United States and the United Kingdom, and the dynamic relationships between employers, employees, and the kiosk.

The value of loyalty

The UK is currently far ahead of the US in kiosk-based loyalty programs.

The second-largest supermarket chain in the UK, Sainsburys, has aggressively marketed their loyalty programs. When customers enter the store, they swipe their loyalty cards in the card reader attached to the kiosk. Their buying preferences are known to the system so an accounting of points earned is presented along with a number of special offers customized for the buying habits of that customer. Customers have the option of printing out coupons for items that interest them.

American supermarket loyalty programs, including those at Safeway and City Market along with other leading supermarket chains, are not kiosk-based. They are simply rewards for shopping at the store and come in the form of savings taken at the checkout counter when their loyalty card is swiped.

Not all loyalty programs are as successful. Boots Pharmaceuticals, the largest UK-based drugstore chain, has installed large white kiosks - about the size and shape of a 30-cubic foot refrigerator - that present point totals and coupons for members of their loyalty program.

The main problem with Boots kiosks (besides the fact they are far too large and unwieldy) is that there is no explanation about the benefits of joining the program nor is there signage or on-screen instructions about signing up for membership. It is a true opportunity squandered. Even having a little paper brochure to describe and encourage membership activity is missing. It is like a secret organization that only admits a few members.

Why kiosks?

A number of retailers think the kiosks serve two main purposes - as a quick and accurate dispenser of product and other information, and as a sales associate adjunct.

If the store does not stock the desired item, or if it is never found in that store, the kiosk can locate and fulfill the order. Merchants like the idea that they will never be out of stock on a product their company carries. The kiosk acts as the unlimited inventory source.

Other retailers report that when kiosks are used as a sales adjunct, they can take the boring and repetitive aspects of the sales associate position and offload it to the never-complaining, always-working kiosk.

Basic training

Kiosks can also be used an employee-training tools. One of the best examples is General Nutrition Centers's(GNC) kiosk line.

These kiosks contain a voluminous amount of fairly complex product information on the thousands of vitamins and supplements the chain sells. Customers can seek out and print detailed data on popular supplements/remedies such as St. John's Wort, vitamin C and gingko biloba. GNC now uses the superb quality and visual impact of the health and fitness data supplied by HealthNotes™.

From a training standpoint, GNC has developed extensive modules to instruct employees in some of the most popular products sold at the chain. Each module is intended to teach a different product line. One deals with vitamins, another deals with dietary supplements, still another is concerned with homeopathic medicines, etc.

Employees are encouraged (perhaps mandated would be more to the point) to take training modules - both new modules and refresher courses - before the store opens and after it is closed. Occasionally, employees will study a module during business hours if the store is devoid of customers. GNC management is adamant in making sure their employees are completely knowledgeable in the products they sell.

The training modules are easily accessible by store employees but very difficult for a customer to access or even locate. More modules are constantly being developed. They are true teaching tools with quizzes and tests given to employees, Sample customer questions are posed with the employees expected to provide the answers. Those answers are compared with the correct answers to assess the employee's level of knowledge.

Attitude, attitude, attitude

The staff attitude toward kiosks is perhaps the most important determinant of success or failure in the retail kiosk arena. Blame for the failure of a retail kiosk project can often be laid on management; if they do not convince employees that the kiosks will not take their job away but will instead be a sales enhancer, the kiosks will mysteriously fail, time and time again.

Florsheim shoes found this out the hard way when they introduced the first e-commerce kiosks in the early 1980s. Their sales people were, and still are, commission-based. Yet if they did not have a customer's size, they never directed them over to the kiosk so the could order the shoes that way. Since they were not to be compensated, they lost all interest in closing the sale.

Amazingly, this incentive-less mindset continues to this day. Sears Roebuck reports that they found the same phenomenon occurring with their Internet-based kiosks deployed in 1999. Not only were the customers left to fend for themselves if the desired products were not in stock, but often those customers found the kiosk to be "out of order." Once the company cut employees in for a portion of their commission, sales people were more likely to steer the customer to the kiosk and show them how to use it.

Other retail establishments have made it a goal to convince employees that they will not be surplussed now that the kiosk is in use and will be given credit for closing the sale. Establishments who do not make this extra effort will find their kiosk initiative to be a major and costly disappointment.

No matter what type of kiosk, the buy-in of the employees is mandatory. If you do not get them to embrace the system, they will find ways - many ways - to defeat it.

What does it all means?

Although the growth in the kiosk industry has slowed considerably due to the recession, projects are still planned and rollouts expected. What has changed are the size of the initial rollouts and the timeline for these implementations. Everything is taking longer than originally planned.

Unfortunately, many of these projects will fail because basic business decisions - bad locations, a lack of focus and direction, undercapitalization, and bad timing - will conspire to bring them down. Others, more well conceived and executed, will thrive.

All types of kiosks, especially retail kiosks, have to be easy to use, provide complete and reliable content, and deliver it in an enjoyable, fast, and intuitive manner. Securing the buy-in of employees will only make this process easier but will also help insure its success. Retailers who fail to follow this common-sense advice will frequently pay the price and will find they have deployed an unpopular and therefore unsuccessful kiosk project.

There is much cause for optimism; there is tremendous potential for this type of kiosk and success will follow if the units offer real value to the customer, are easy to use, and are fully operational almost 100 percent of the time.