Article

Wine Insite plays the numbers game

In the second installment of our series on a kiosk startup company, Wine Insite founder Lisa Allen talks about survey results and the quest for a second trial location.

July 18, 2002

Editor's note: Welcome to the second installment of a series looking at the life of a start-up kiosk company. The company, Wine Insite, is developing a retail kiosk that will offer information and advice on wine selection. Based in Atlanta, the company is the brainchild of Lisa Allen, a 2001 MBA graduate at Emory University. Kioskmarketplace will report on Wine Insite's progress every few months. The first installment, "A kiosk startup story,"ran in April.

ATLANTA -- As of mid-July, there were no Wine Insite kiosks deployed in the U.S. Such is life with a kiosk startup company. Trial programs start and end, research data is compiled, and then decisions are made on future tests or full-fledged rollouts.

For Wine Insite's founder, Lisa Allen, the past three months since her company's inaugural test program ended in early April have been a whirl of data accumulation, meetings, and skull sessions over the direction of her nascent company's business plan.

It has been a busy time for Allen, whose one-person operation continues to push forward with a kiosk that offers retail consumers at the point-of-sale information and insight into the often-frustrating world of wine selection.

"I'm not solving the problem of information because there's plenty of it," Allen said recently. "But there's not enough useful information at the point-of-sale and that's important."

Survey says Â…

Information gathering was not a problem for Allen after April 10. That was when she ended a four-month trial of her kiosk at eatZi's Market & Bakery in Atlanta. The touchscreen unit -- featuring software developed by Allen in a NetVista kiosk donated by IBM Corp. -- offered consumers information on how to select wines for their meals and information on wine availability at eatZi's.

Wine Insite founder Lisa Allen

While Allen is still developing usage information figures from the trial, she proudly points to the store's wine sales as proof of her concept's viability.

During the 18-week period when the kiosk was in place, the store averaged weekly wine revenue of $14,805, a 5.8 percent increase over the $13,997 average for the 23 weeks prior to the kiosk's deployment. Conversely, in the nine weeks after the kiosk was pulled from the store, wine revenue dropped 11.6 percent, to $13,085.

Ray Camillo, general manager of eatZi's Atlanta location, was full of praise for the kiosk, but said he was uncertain if a direct parallel could be drawn between the revenue figures and the kiosk.

"The way we look at it, wine sales mirror the economy," Camillo said. "When people feel affluent or feel the economy is going well, they buy wine.

"We don't know if the kiosks (helped sales) or if it was an upturn in the market; we're just not sure," he added. "We'd like to think it was the kiosk, but we're not sure."

Camillo said reaction to the kiosk was positive among customers, who are still inquiring as to the kiosk's whereabouts three months after the test ended.

"We really did like the kiosk," he said. "It took a while for customers to appreciate it. They'd look at it and say, `That's great, but what I really want is a bottle of wine.' It took them awhile to get it. Wine buying is a process of educating consumers. We found that our sales mix for uncommon wines went up; people started buying a lot of Spanish wines."

What's next?

Having had enough time to digest the trial period results, Allen is more than ever convinced of the viability of her concept. But questions linger concerning the next move.

One thing that Allen knows for certain is she would like to conduct a second test. Her preference is for a major chain that will place kiosks in three to five locations, giving her a chance to test the robustness of the system, refine modifications made following the first test, and disseminate any potential remote management issues.

"I really want to have a second trial and push the limits of the technology to see how the integration goes and know what kinds of bells and whistles I need before the final launch," she said.

Allen is scheduled to meet in late July with Harris Teeter, a 160-chain market with locations in six Southern states. She is sounding out other possibilities, but identified Harris Teeter as the kind of chain that would truly test the robustness of the system.

"They've got almost $100 million a year in wine revenue," she said. "If I move their revenue by any percentage, that will be a big impact."

While Allen seeks new partners for a second trial and possible deployments down the road, she is also analyzing her relationships with retailers. In developing the Wine Insite concept, Allen envisioned placing kiosks in retail outlets, then working with wineries to develop information and perhaps generate advertising revenue on the kiosk.

Now, she is contemplating selling or leasing her software directly to retailers. The retailers would also have to buy or lease kiosk enclosures from IBM. Allen is also considering revenue-sharing packages based on wine sold directly through the kiosk.

"Retailers are going to want a lot of control and they can feel threatened if I'm talking with their vendors about things like on-screen advertising," Allen said.

Camillo noted that the kiosk also proved beneficial by gathering market research for his location.

"It told us what we had too much of and what we didn't have enough of," he said. "That's indispensable information for us."

Adjusting to the commitment

Allen's commitment to Wine Insite led her to make some lifestyle changes recently.

For one thing, she has quit the two part-time jobs she had earlier this year. Her decision was based on a desire to concentrate fully on her company as she attempts to move it beyond the start-up phase.

"I quit all my part-time jobs because I didn't know any entrepreneurs who were successful with their start-ups while working part time," she said. "I decided to quit and focus 100 percent on Wine Insite. This is the only way I'll know if I can do this, by working full time on it."

Though most of the $25,000 in seed money she had for last year's launch is gone, Allen does not expect the loss of her part-time income to negatively affect her plans.

"I'm fine; my only expenses are travel expenses," she said. "I went to San Francisco for a trade show recently and went up to wine country (in Northern California)."

She was also forced to scale back her soccer activities when one of the clubs she played for decided not to field a team this season. Allen now plays for just three teams. But, as befitting someone with a go-go attitude, she has found another outlet for her sporting ambitions.

"I've decided to start training for a triathlon in the fall," she said. "It just seems appealing and I've got some friends who are training for it. The whole transition seems like a good challenge, not so much from swimming to biking but from biking to running."

Over the next few months then, Allen will find plenty of challenges, both in her work and sporting lives.