News

An old industry in the information age

According to marketing executive Jack Wasserman, a trip to the past is the key to understanding the kiosk's future.

April 14, 2002

It is pretty much a bygone conclusion that the future of the kiosk industry relies on the ability to supply information. We have been sitting around trying to figure out what is the best way to get kiosk products out of the red and into a measure of profitability, and information appears to be the key.

But it will not happen easily. The kiosk industry is an old industry that is being revived to meet the needs of the information age. As such, most kiosk deployers have yet to discover a revenue model that would sustain profitability.

Back in the 1960s and `70s, the definition of a kiosk differed depending on the function that you wanted to use it for. Was your definition of a kiosk the ATM machine of the `60s or NCR's first self-service device of the `70s? Neither machine was geared to business profitability but to make sure that customer needs were satisfied.

What has changed? Only that new kiosk entrepreneurs wants to make a profit from the kiosk's use. They now see the information age and the use of the Internet as a revolutionary vehicle to make the industry churn out revenue. I am sorry to say it will never work!

Why, why, why

Information, in so many, is the key to the kiosk conundrum. What most people have not understood is that the modern kiosk is there for information, the same as it was in the 1970s. NCR developed the kiosk as a service device, not as way to generate advertising revenue. The machine was built for you and me, with the goal of making customer service a happy experience. It is a complementary channel to an existing business and not a business on its own.

But kiosk entrepreneurs have been trying to reshape the business model since the Internet became an integral part of the business world. They have tried deploying the kiosk as a pay-for-use model, with access serving as the key revenue generator. They have also added virtual advertising on a click-per-use basis and included banners on the kiosk to generate additional revenue.

Generating revenue is basic, logical "old industry" thinking, and that is what should be expected from the information age and the revolutionary vehicle called the Internet. But when you take into account the cost of the kiosk, it makes no business sense to place a kiosk in a public access area.

The solution

In the end, kiosk growth will come from information. The consumer wants information and the Internet will give it the stimulus. But that alone is not going to generate enough revenue to make a project viable.

The issue is one of consumer tolerance. The consumer wants information; this has always been the case and will always be the case. The Internet will bring information to the consumer faster and better than other outlets. Kiosks provide information and this information should be part of any businesses' tangible benefits.

But does the consumer want to pay for it? Or does the consumer even want to look at the advertising on the kiosk? So far, the typical response has been negative.

Key to the kiosk kingdom

The early disc-driven kiosk of the 1970s had limited interactivity, but it was there to give the business tangible benefit-customer information. From a viable business perspective, nothing has changed. The kiosk industry has tried to make the device a revolutionary new source of revenue. But the ability to interact and exchange information with the consumer at a higher level has to be an asset of the business. Customer information and customer interaction will add value to the business of the information age.

Economic power is now in the hands of the customer. The more that you know about your customer base, the more profit the business will generate. A kiosk strategy has to be part of any company's attempt to generate additional customer information.

The kiosk model of the 1970s has evolved in the information age. Businesses have to bridge the clicks and the mortars, or should I say the 1970s with the 2000s, in order to ensure the success of the industry.

Jack Wasserman is president of Digital Value Marketing Inc., based in Thornhill, Ontario.