News

Made for each other

April 18, 2006

This article appeared in the Retail Self-Service Executive Summary, Spring 2006.

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Should gift registries and gift card kiosks be combined? Well, sometimes. There are plusses and minuses to consider when deciding to integrate the two, but the final answer ultimately depends on the deployment.

In 2004, the National Retail Federation tallied Christmas gift card purchases at $17 billion — 15.6 percent of America&rsquo's total Christmas spending. Because of this profitability, Ben Wheeler, product marketing director for I-Engage Kiosk Solutions, thinks selling them through a kiosk that also fields a gift registry is a bad idea.

"I think a gift registry on a gift card machine would be a mistake," Wheeler said. "You don't want people who would put money into your machine slowed down by people browsing products."

In Wheeler&rsquo's logic, and personal holiday experience, customers often buy gift cards on the fly — they run in and run out, not wanting to deal with long lines and holiday fuss. But National Retail Federation spokesman Scott Krugman said lines at the kiosk shouldn't be a problem.

"I don't see what the down-side (in combining gift card and gift registry kiosks) would be," Krugman said. "I think seeing (gift cards) move to gift registries would make sense. The whole idea of a gift registry is so you're not getting the same items, so you're not making returns, and I think gift cards play into that kind of ideal."

Krugman said as self-service areas become more popular, it&rsquo's inevitable that customers must wait in line, but the benefits of waiting for kiosk convenience still outweigh the time cost.

The right combination

There are times when gift registry and gift card kiosks should be combined. For example, in an off-site, out-of-store venue, Wheeler said combining the two is a good idea.

"Most of the retailers in the world are looking to add to their footprint. If you put a Target kiosk at Churchill Downs (a high-foot-traffic destination), who&rsquo's to say that's a bad idea? (Customers) have money in their hands."

Wheeler said the key to moving the kiosks off-site is to locate them in popular destinations, like the Transamerica Center (San Francisco), or Chicago&rsquo's John Hancock Building. He said placing the units in a shopping mall is harder to do because if the deployer doesn't have a store located there, retailers on the site will fight to keep the machines out.

"In the store, they need to break (gift registry and gift card kiosks) up, because it&rsquo's a line buster," Wheeler said. "Outside the store, they need to add functionality."

Forrester Research analyst Tamara Mendelsohn said either strategy can be correct, depending upon deployers' situations. She said gift registries and gift cards are very different in terms of the consumers' goals, but they can be integrated depending upon the deployment.

In the end, she said, it&rsquo's about the customer&rsquo's needs.

"I would always shift the conversation back to consumer goals," she said.