A Bright Idea

When Lamps Plus president Dennis Swanson invested in a web site, he saw it start to pay off in online sales. But, as the head of his own $150 million lighting business, which started as a single California manufacturing facility nearly 30 years ago, he figured the web could do more for his business. So since January, Swanson’s web investment has been doing double duty in his 44 stores by putting the same expert systems built for the site out on the sales floor in web-enabled kiosks.

The result: Special orders from the warehouse have increased by a third and Lamps Plus’s salespeople have become more knowledgeable about products and more adept at cross-selling and upselling based on content prompts from the kiosks. Although kiosk technology vendors and advocates of promoting multi-channel shopping have argued for years that kiosks are a logical extension into the store, few retailers have shown a return from kiosk programs. The difference with the Lamps Plus approach is that it leveraged some assets—the web site design and search function; used the kiosks to achieve a specific goal—increasing sales of lighting products; and tied the kiosks, stores and web site into a deliberate multi-channel strategy.

Make sure they work

In concept, kiosks for multi-channel retailers are always a good idea, says Lauren Freedman, president of consultants The E-Tailing Group Inc. , noting that store kiosks can offer utility as shelf extenders and as a way for customers to research products or even resolve some customer service issues on their own. Whether the concept executes successfully, however, depends on a number of factors. “It’s a question of, can you encourage the customers to use them,” Freedman says. “It comes down to use—what percentage of the time are the kiosks up, and how well trained are store personnel to use them.”

The lighting products business and the scope of Lamps Plus’s offering-—more than 10,000 products—make the web’s site search function particularly useful in the stores. Unlike purchases of products such as electronics, consumers generally shop for lighting products by product attribute rather than by brand, and the search functionality built into the web site by vendor EasyAsk Inc. supports that process. Within the broad category of lighting fixtures, for example, the site lists all the major attributes that Lamps Plus knows from experience customers are interested in, such as style, finish, price range, intended use and others.

The kiosks are tied into Lamps Plus’s mainframe computer, so they not only provide a quick reference for what’s available in store inventory but also significantly extend store inventory by displaying additional products for quick shipment from the warehouse. Initially, the web-enabled kiosks displayed only in-store merchandise. But that left the kiosks with the same problem found in the stores: when a customer didn’t find what he wanted in the store or on the kiosk, customer and store associate ended up digging through supplier catalogs to find other choices, resulting in a certain loss of control and sometimes lost sales when customers picked out something that might require months for delivery.

A greater selection

“Now, the kiosks show hundreds of SKUs that the stores don’t carry, but which we could guarantee quick delivery on from the warehouse. Essentially, the kiosks provide a much greater selection of products, but customers only have to wait two days to two weeks for delivery,” Swanson says.

Since rolling out five to six kiosks in each store, special orders from the warehouse have increased by a third. Lamps Plus has realized additional benefits in the form of more effective store sales associates who depend on the kiosks for updated product information. The kiosks also have become vital to sales associates helping customers on the phone in the company’s web-enabled call center.

“We found our top salespeople know the product attributes, and they use them to drill down with the customer to help them narrow their selections. EasyAsk simulates that process on the site,” Swanson says. Instead of initially roaming the store, customers can get started by picking out at the kiosk the attribute most important to them—price, for example—which narrows the assortment.

Internet Retailer Top 500 Guide

Subsequent choices further reduce the field, winnowing thousands of possibilities into a manageable handful. Shoppers with no set notion of what they want going in can get started with ideas from additional categories on the site, including best sellers and new products, as well as interactive tools that let them perform tasks such as matching lamp bases with different shades or mapping out a lighting plan.

Store visitors frequently use the kiosks by themselves to search, but if that sounds like self-service, Swanson says the kiosks are an aid to rather than a replacement for store salespeople. “We definitely want customers to work with a salesperson. What we want to do with the kiosks is just to speed up the process,” he says. “Customers find it a far easier way to start finding what they want in the store. And the salespeople have found it is also easier for them when working with a customer to show them the product,” he adds. “The thing about the Internet is everybody used to think it’s a different business. But it’s not a new business. It’s just a better way of doing the old business.”

No coupons or maps

One of the few differences between the closed-system site as accessed from the kiosks and the web-wide LampsPlus.com is that the kiosk site doesn’t offer the same coupons and maps. “We don’t put the maps and coupons to bring customers into the store on the kiosks because the customers are already there. Otherwise, if you looked at the two sites, you’d say they were identical,” Swanson says.

As Lamps Plus already pays for software licenses and maintains an IT staff of 20 including eight full-time programmers for its web site, the kiosks leverage those resources in the stores at only a slight additional cost. The kiosks use a Dell computer and flat-screen monitor like those already in use elsewhere in the company. The store display group at Lamps Plus built and installed the kiosk enclosures at a cost of a few hundred dollars each. Adding to that the cost of the additional hardware, putting five to six kiosks in each 11,000- to 15,000-square-foot store cost less than $8,000 per store, says Swanson, who estimates the kiosks paid for themselves in incremental sales within a few months of installation.

For online customers, Lamps-Plus.com already has been built to load in and update coordinating items and add-ons for every product, accessible through a click on a button. Pushing that functionality out to the kiosks has helped increase such cross-sells and upsells in the stores, Swanson says. Trying to remember all the related items for each product is challenging even for top salespeople, but now, for each item a customer selects in the store, the associate accesses a list of related items through the kiosk.

Customers get another look at coordinating items when Lamps Plus sends them an e-mail thanking them for their purchase and a product warranty. They’ll also get an e-mail when there’s a sale or a new product related to their purchase. “We track online sales on those items and they are significant,” says Swanson. “If we assume this is just as effective in the brick-and-mortar world as it is online, it’s pretty effective.”

10% and rising

Online sales at Lamps Plus have doubled in the last year, aided by special orders of warehouse inventory accessed at kiosks, as well as cross-sells and upsells prompted at the kiosks, and they now represent 10% of sales. Swanson expects that percentage to increase when Lamps Plus makes the store kiosks fully transactional on all of its products, a capacity it’s now developing. That will allow store customers to place an Internet order on the web site from the kiosks, input their credit card information to purchase, and arrange for store pick-up or delivery.

Through the kiosks, that feature will bind the retailer’s online and offline operations together even more tightly. And Swanson says that’s improving results in both. “Our success in the online world is created by taking our success offline and interpreting it in a way that works online,” he says. “What we learn online we then bring back to the stores, so the stores improve, too. We keep tying what we do in the Internet world to the brick-and-mortar world.”

mary@verticalwebmedia.com