Crediting employees with kiosk sales eliminates clash of man vs. machine

The problem is as old as the retail kiosk industry. A retail sales associate sees a new kiosk being installed in his store, and instead of seeing an opportunity to enhance the customer experience, the commission-starved rep perceives a real threat to his livelihood. Not long after the kiosk is installed, it mysteriously loses power and an "Out of Order" sign is taped to its screen.

To avoid this type of employee sabotage, retailers must give employees credit for kiosk-assisted sales, providing incentives so that sales associates help create synergy between man and machine.

Kiosk software developers like Branford, Conn.-based NetKey Inc.

Robert Ventresca, NetKey's director of marketing, said few retailers bold enough to use kiosks are willing to institute incentive programs that credit employees with kiosk sales.

"Clearly, educating the sales force is a big part of helping with the acceptance of kiosks in the marketplace," he said. "At this point, it's really still sort of a nascent type of thing."

NetKey, which provides end-to-end kiosk software solutions for retail clients such as Borders Books and J.C. Penney, provides its customers with advice on educating employees about kiosks.

"It's in our best interest that the kiosks succeed as a retail channel, so we work with the organization and make sure they understand you need to approach this with your staff in a different way," Ventresca said. "It's not a confrontational or competitive situation, but a matter of achieving the ultimate goal: making the sales for the company."

Netkey developed software allowing retailers to identify and credit commissions to employees involved in kiosk sales. The sales rep simply enters a code at the kiosk while assisting a customer with an online sale, and is then given credit for making the sale, whether the merchandise comes from the store's inventory or another branch.

"There's growth in the retail environment, it's really starting to ramp up," Ventresca said. "What comes with that, obviously, with retail is they also need to learn how to integrate these things in your existing environment. The forward-looking retailers have discovered that yes, we need to make sure that our sales staff is given the proper incentive to use the kiosk as a helpful channel."

Hats off to Lids

One retailer standing head-and-shoulders above the crowd in crediting employees with online sales is Boston-based

By the end of 2001, Lids plans to install its e-Center kiosks in all of its stores, according to Steven Murphy, Lids' vice president of e-Commerce and business development. The kiosk will link Lids shoppers to the store's Web site and an expanded choice of merchandise. Products can be shipped back to the store for customer pick-up or to the customer's home for a nominal fee.

Lids sales associates receive bonuses based on personal and storewide sales. e-Center sales are recognized at the individual store level, added to the store's sales quota and credited toward the bonus of employees.

"I think a big reason why it works for us is because we don't carry the entire inventory in the store. It kind of behooves the store associate to get people over there to make the sale," Murphy said. "If we were a big warehouse and we carried most everything we have in the store and we had a kiosk sitting there, then I think it would be a little bit more competitive in nature for the sales person."

Murphy, who refers to the in-store kiosk as a "virtual sales associate," said the e-Center was created in response to the needs of customers. Since Lids stores typically have small staffs, sometimes with a single associate working, the kiosk provides customers with merchandise information when the on-site staff is busy.

"The Web site is nothing more to us than another store. That's how it's been set up even internally in terms of how we do the replenishment," Murphy said. "For us, really the focus was on making sure we could maintain strong synergy between the site, the kiosks and the (bricks and mortar) store."

Local and National Inventory

A typical Lids store stocks 5,000 hats. But its online inventory is 10 times that number, representing every professional and college athletic team in a number of styles. So beyond a small number of national teams, Lids stores stock hats for local and regional schools and teams.

But the appeal of the nine-year-old chain, Murphy said, is to be able to provide hats from any team at any store. He said, for example, that a store in Madison, Wis. serves a lot of Green Bay Packer fans. When someone goes to the store looking for another NFL team, like the Kansas City Chiefs, there's not likely to be a Chiefs hat in stock. In fact, he said it might be hard to find a Chiefs hat in the city at any retailer.

"A quick and easy solution for us was to investigate the opportunities for kiosks," Murphy said. "What we found was they were an extremely cost-efficient alternative and open up our assortment from about 5,000 in our stores to about 50,000 skews online."

Ahead of the Game

With a keyboard, mouse and card swipe, the e-Center has the appearance of a jazzy home PC - a look not likely to intimidate Lids' "Gen Y" target audience of 12- to 34-year-olds. The kiosk is amped with a satellite Internet connection, faster than DSL, but not quite T1 speed. The satellites are being installed on the roofs of malls with Lids stores nationwide.

"They've got the keyboard and the mouse and they navigate just like they would if they were sitting at home on the Web site," Murphy said.

There is still a learning process involved for customers and employees to use e-Center, Murphy said. The kiosks at Lids, however, are gaining popularity among both customers and in-store associates.

"The more our sales associates and customers become more comfortable with the e-Center, what it can do for them, the technology, and just ordering on the Web, the more we see them and the more we see our sales increase weekly," Murphy said. "From that standpoint, it's been a phenomenal success."