In its second-largest acquisition, Amazon buys the company for $970 million.
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The kiosks cost about $15,000 and up to $150 a month to operate. Global Access says its devices could drop below $6,000 as the kiosks become more popular. Consumers pay 19 cents a minute for all services on the Info Touch kiosks and $1 for five minutes of usage on the Global Access kiosks. Templeton says 40% of the income from the ZapLink program will come from advertising that appears on the screen and on electronic tickers on the devices. The other 60% will come from sales of kiosk services. Circle K is in a revenue sharing agreement with both vendors, which own the kiosks and the technology, says Jason Broussard, director of Internet services at Circle K. Circle K has already determined from its testing that the kiosks need to run for three hours a day to meet expenses.
Target: Connected consumer
Unlike an earlier test of web kiosks in which the target market was the unconnected consumer, these kiosks are aimed at experienced Internet users. “They are mobile. They use e-mail, PDAs, cell phones and other technology devices because they want convenience,” Templeton says. The sort of consumers that Circle K is targeting are not tied to one place all day, such as construction workers, salespeople and college students. In fact, there are two ZapLink kiosks on the Arizona State University campus, Templeton says.
Circle K is promoting the ZapLink web kiosk program through its web site, which provides a kiosk locator, while the stores are promoting through signage and brochures at the kiosks. Circle K also plans to distribute 100,000 free 15-minute web surf cards to customers by the end of March to get customers to try the kiosks, Broussard says.
While Circle K is focusing on hot, new technology, 7-Eleven is building its kiosk strategy on its already established foundation of providing financial services to customers. 7-Eleven’s 100-store test is expanding on its ATM capabilities. Working with leading ATM manufacturer NCR Corp., 7-Eleven is branding its kiosks as Vcom devices.
The interactive kiosks, owned by 7-Eleven, are provided in conjunction with Certegy Check Services, American Express Co., Verizon and Western Union and include ATM cash dispensing, check cashing, money order purchases and money transfers. The web capabilities will initially allow users to access travel directions and maps, weather, news and winning lottery ticket information. “We’re already in the financial services business because we provide ATM access through American Express and we sell more money orders per year than most other stores,” a spokeswoman says. 7-Eleven sells more than $4 billion in money orders per year and has ATM transaction volume of 100 million per year.
Unlike Circle K, which targets experienced web users, 7-Eleven is catering to new and current customers who may already have online access but want access to the financial services offered by the Vcom kiosks. Current functions available include money order purchase, wire transfers and traditional ATM services. This summer, 7-Eleven expects to offer check-cashing services as well. 7-Eleven is promoting the kiosks through point-of-sale signs. The kiosk monitors also have information on the services. Other marketing includes radio and television advertising and publicity and promotions with local radio stations.
The company says Verizon will eventually provide telecom services. But 7-Eleven is determined to go the financial services route first. The company says it plans to offer other types of banking and insurance services before adding web-accessing services. “We’re looking at that but we’re far from adding the ability to make online purchases,” the spokeswoman says. “We have success selling financial services so we’re starting with that.” Future applications include bill payment, event and transportation ticketing, advertising, loans, accepting bank deposits, lines of credit, insurance, credit card sign up, stored-value services and eventually telephone services and online shopping.
Although the web access services may be a long-term goal for 7-Eleven, the company understands that there is a variety of possibilities with that technology. Future applications could allow customers to tap into 7-Eleven’s daily distribution of fresh food and even hot-off-the-press magazine issues. “We have thought about bundling an Internet service as part of our convenience retail strategy,” the spokeswoman says. “We could leverage our distribution infrastructure and combine that with an online shopping option so customers could have a choice of what they want, when they want it and where they want the items delivered.”
Readying a rollout
So far, results for the web kiosks show customers are responding well but 7-Eleven says it’s too early to say how the Vcom program will develop. Still, 7-Eleven is optimistic that web kiosks will make sense as a convenience service and expects to do a national rollout to 5,200 remaining U.S. stores later this year.
Circle K is similarly positive about the future of kiosks because an earlier test proved the concept could attract good users. Templeton says the strategic goal of Circle K’s first kiosk test, e-place.com, which ran just over two years ago, was to give customers that may not have access to the Net a way to get online. “What we found, however, was that the unconnected crowd was not the crowd using the kiosks,” he says. “Most of the people using e-place.com had more than three years of Internet connectivity. They had credit cards and they knew how to shop online. More than 70% of the traffic was from people checking e-mail.” That bodes well for the future of the ZapLink program, he says.
Circle K has tweaked its program based on early results. “We found out that Thursday was the highest day of usage in the Phoenix area because users were checking the lottery results,” Templeton says. “So we repositioned the lottery information so now it reports the results on the track loop that shows advertising and messages.”
Furthermore, advertising tests have proved to be fruitful as well. “There is a strong correlation between those who advertise with us and the web links that ZapLink users connect to,” he says. The stores did a promotion in which consumers could buy a 20-ounce Coke and get one free with a ZapLink coupon. Templeton says well over 70% of the coupons were redeemed.