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The self-service kiosk industry grows up

The kiosk industry has matured and increasingly is focusing on specific niches rather than a one-size-fits-all approach, industry insiders say.

June 11, 2014

The self-service kiosk industry has matured, and vendors are increasingly focusing on specific fast-growing niches rather than a one-size-fits-all approach, industry figures tell Kiosk Marketplace.

“Kiosk vendors are no longer trying to be everything to everyone anymore,” Olea Kiosks CEO Frank Olea said. “We used to say: ‘We can provide any type of kiosk you like for any application.’ Now kiosk vendors have found specific niches that they are focusing on, whether it be health care, transportation or e-government. Olea, for example, derives most of its revenues from custom projects where we design a completely new kiosk for a customer.”

Olea said his company is on track to double its revenues in 2014. “I know that a lot of other kiosk vendors are also doing well,” he said. “Most of us are making more kiosks than we did before.”

Coming of age

“The kiosk industry has come of age, and is going through a major change,” said Ron Bowers, senior vice president of business development at Frank Mayer & Associates. “Instead of the huge refrigerator-style kiosks we used to make, we’re now creating designs that fit into the retail, hotel, restaurant, education, health care and government sectors.”

This change came about because the kiosk industry realized that, instead of being purely technology-driven, it had to create solutions that are user-friendly, help to engage the consumer with the client’s products and services and reinforce the client’s brand equity, Bowers said.

“There are significant growth opportunities for kiosks, but these won’t be your father’s kiosk anymore – they may not even be recognised as a kiosk in many cases,” he said. “This is because it’s not the hardware but the interaction that creates the kiosk. For example, a consumer may be waving their hand at a touchscreen on a digital sign and making kiosk-style interactions.”

“People still have a negative image of kiosks, as they are thinking of the older generation of kiosks that offer limited functionality and need a lot of maintenance,” said Michelle Marian, Motorola Solutions’ North American retail and hospitality lead. “They may not be aware of the new generation of kiosks that have come out in the last few years and offer advanced capabilities. Motorola is seeing an opportunity to offer kiosks with a better form factor and a cooler user experience.”

Marketing

The evolution of the kiosk industry can be seen in its marketing and advertising, Olea said. “Instead of attending a single general-purpose kiosk trade show, as they used to do, kiosk vendors now target the vertical market shows that potential clients in specific niches attend and the trade magazines they read. When I attend vertical market trade shows, I see kiosks from companies I’ve never heard of.”

Bill-payment kiosk supplier TIO Networks is a good example of a kiosk company that has found a successful niche, according to Olea. “Back when it was known as Info Touch Technologies, the company used to provide a wide range of different kiosk solutions,” he said. “But, since changing its name to TIO Networks in 2006, it has focused solely on supplying bill-payment kiosks.”

“The bill payment kiosk market is seeing a lot of growth,” said Charley Newsom, director of technology at KIOSK Information Systems.

“TIO Networks is also an example of a kiosk company adopting an integrated multichannel strategy, as it offers clerk-assisted bill pay as well as mobile bill pay,” Olea said.

Mobile

“Smartphones are a threat to some types of kiosks ... such as information-only kiosks, Internet kiosks and airline self-check-in kiosks,” Olea said. “So kiosk vendors should respond by developing smarter, more capable kiosks offering advanced functions which can’t be replicated on a smartphone.”

“The challenges that smartphones have introduced in the kiosk market are real, and the types of kiosks being sold today versus five years ago reflect those challenges,” Newsom said. “Each technology has its unique purpose that the other can’t support. For example, a mobile device can’t accept or receive cash, nor can it give the immediate satisfaction of delivering products. A kiosk can’t sit on your lap in your living room giving you the opportunity to pay a bill while watching TV. The winners will be those who figure out the complementary roles of each technology.”

U.S. startup B-cycle is an example of the convergence of mobile and kiosk technologies, Newsom said. “B-cycle has a mobile application that directs you to the closest kiosk with bikes available for rental or open docks to return a bike,” he said. “Once a consumer chooses and arrives at the location, they interact directly with the kiosk to either buy a membership and rent a bike or return their bike to an open dock.”

Two other fast-growing niches involving integration of mobile and kiosk technology are automated retail and smart lockers. “In the emerging vertical of automated retail, you can search for kiosks that have a certain product available, reserve it, drive to the kiosk and have the product dispensed to you,” Newsom said. “This type of solution provides the semi-immediate satisfaction of getting the product you want without having to wait for it to be shipped to your home as you would with a typical mobile shopping purchase. With smart lockers, you can purchase a product from your mobile device and have it delivered to an in-store location. Typically, you save yourself shipping costs by using a smart locker solution, and you don’t have to interact with a store associate to retrieve your product.”

Vending

And the distinction between kiosks and vending machines is becoming increasingly blurred, Olea said.

“I never thought in a million years that Olea would make vending machines, but right now we’re looking into creating a hybrid kiosk and vending machine,” he said. “The kiosk industry is now starting to make intelligent vending machines which are much smarter than vending machines were in the past, and calling them kiosks. But, at the end of the day, they are really intelligent vending machines.”

“I see an opportunity for retail product vending kiosks at major transportation hubs such as airports, bus stations and train stations,” Bowers said. “These places are increasingly becoming malls. Following the success of Best Buy Express kiosks, we’re already seeing a number of different types of retail kiosks at airports, for example jewelry, clothing and cosmetics kiosks.” 

Bowers also expects retailers to place their high-end products that are vulnerable to pilferage into in-store kiosks.

Passport kiosks

One vertical that Olea is aggressively pursuing is the airport biometric automated passport control kiosk market, which, according to the Acuity Market Intelligence report "The Global Automated Border Control Industry Report: Airport eGates and Kiosks,” will grow to around 8,000 APC kiosks in Europe and North America by 2018.

“There are a large number of airports planning to install APC kiosks worldwide,” Olea said. “The two main suppliers of APC kiosks in North America at the moment are Olea and Vancouver Airport Authority with its BorderXpress kiosks. But we will see a lot of companies entering the APC kiosk market.”

Olea Kiosks has installed its Automated Passport Solution kiosks at Dallas/Fort Worth International Airport. “At DFW, our kiosks reduced the time taken to get through customs from three to four hours to 15 minutes,” Olea said.

More verticals

Other verticals that Olea expects to grow rapidly include U.S. military, government kiosks, and health care kiosks.

“We’re seeing many different branches of government buying kiosks, for example courts installing kiosks for jury service registration,” Olea said. “Biometric security kiosks will be a very big deal for U.S. military bases. Eid Passport offers a biometric kiosk where you sign up for a background check to prove who you are. Once you are verified, if you go to any military base that has an Eid kiosk, instead of checking in at the regular security desk, you just scan your hand on the kiosk.”

“Frank Mayer has been supplying biometric kiosks to the U.S. military for five years and is currently working on a biometric kiosk system for the U.S. Transportation Security Administration,” Bowers said.

According to Bowers, health care is a good example of how interactive kiosk solutions can really change an industry dramatically. “Consumers can use health care kiosks to check their blood pressure, body mass index and weight, and make appointments with a doctor,” he said.

Frank Mayer has installed 4,200 SoloHealth Station kiosks so far, according to Bowers. "We’re seeing health care kiosks being installed in multiple sectors such as clinics and large retailers,” he said. “The idea is to offer interactive health care solutions in retail environments which are 15 minutes away from 90 percent of the U.S. population so they can get health information very quickly and easily without needing to make appointments at a clinic.”

Biometrics will be important for health care kiosks, Olea said. “We just built a health care kiosk where you sign in to make your co-payment at a hospital using an iris scanner instead of showing your identification card.”

Innovation

“Innovations are happening all the time in the kiosk industry,” Olea said. “We regularly get calls from people with new ideas for kiosks.”

Redbox is an example of how a totally new use for kiosks can transform a industry, Olea said. “Redbox came out of nowhere, and, with its 40,000 DVD kiosks, changed the way people rent DVDs and put Blockbuster out of business,” he said. “Of course, eventually everyone will be streaming movies on the Web, and Redbox will go the way of Blockbuster, but Redbox shows how there may be someone out there right now developing a kiosk that will shape an entire industry.”

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Frank Mayer Kiosks and Displays specializes in large-scale rollouts of custom digital kiosks for enterprise and growth-oriented brands. With a relentless focus on premium design, customization, and end-to-end service, we manufacture self-service customer engagement solutions that expand market reach, boost sales, and enhance brand equity.

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KIOSK Information Systems is a world leader in self-service solutions because of its long history delivering proven expertise in design engineering and manufacturing, application development, integration, and comprehensive support services.

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