E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
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Chaffin also notes that the kiosk can serve as a store operational tool as well as a customer service point of access. “We are working on integrating our warehouse and store operations systems with the kiosks,” he says. “We could issue product rain checks on the kiosk once that is done. In terms of keeping items in stock, we could even use the kiosks to sell smaller electronic items such as MP3 players instead of keeping them in the stores.” Those products, he says, would be fulfilled through BlueLight.com.
The largest U.S. retailer, Wal-Mart, also is deploying kiosks. The discount chain store will have 3,000 NCR kiosks deployed in every Wal-Mart store and Supercenter by the end of May. The kiosks, called Automated Customer Service Machines, will be near the jewelry department of each store where customers can use them for personalized gift registry. Shoppers will be able to create bridal, baby and birthday registries by scanning items they want with a handheld bar code scanner that they will check out at a Wal-Mart counter. KPMG’s Hardy say consumers already are motivated to use gift registries via kiosk because they are used to looking up product information online.
The retailer developed the registry kiosk software with NCR Corp.’s Human Factors Engineers, a department that determines which technical configurations consumers respond best to, such as ease of use of a keyboard and screen, among other details. Wal-Mart officials would not comment on plans for the kiosks or the cost, although they expect the kiosks to enhance customer service.
Yin and yang of kiosks
NCR also is touting a dual-use POS-terminal/kiosk for department stores. During off-peak times, when use of the POS terminal is lower, the device could be configured in such a way that customers could use it as a kiosk. The display could face the customer and the keyboard, which is usually on the clerk’s side of the counter, could be moved to the customer side. The store could also add easily removable wraps around the device. “A department store has 200 terminals for Christmas shopping, but they have a low percentage of utilization the rest of the year. This is a way to leverage an asset,” says Tracy Flynn, vice president of product and solution marketing for NCR.
While some retailers just now are jumping on the kiosk bandwagon, some early adopters have known the benefits of kiosks for some time. REI stores have been using kiosks to expand their breadth of product selections for consumers, especially in its smaller stores. REI has 45,000 pages of content online to help customers find information about products and activities. With 65 stores, a worldwide catalog business, as well as three web sites, REI has a real-time inventory warehouse system.
REI began implementing in-store kiosks in 1997 and finished its rollout in 1998. REI now has 115 kiosks in 60 stores, which REI says generate sales equal to the average sales for a 25,000-square-foot store. In 1999, REI began upgrading its kiosks to increase their speed and stability. REI now is integrating Fujitsu’s POS Internet enabling system that will allow kiosk users to access real-time inventory information as well as allow cashiers to order online from their checkout terminals, two functions that analysts say will be the status quo for kiosks.
Analysts say the price of kiosk installations can vary significantly from hundreds to thousands of dollars each depending on the extent of the infrastructure. Prices can go up if a kiosk application is wrapped around a browser and web site versus using proprietary development software. And the network under which the kiosk operates can be costly if a retailer has to install a T1 or other high-bandwidth connection to link to the web.
Training bridge builders
While kiosks can provide a bridge between retail channels, getting store customers to use the kiosks for more functions is the challenge for retailers going forward, Hardy says. Training employees to use the kiosks is an important element that several retailers are incorporating.
“Consumers also need to see sales associates using the kiosks,” because that will help them realize it can be a useful shopping tool, Hardy says. “Making it worth the customer’s time to use the kiosk also is an important factor to consider.” Some retailers may consider using greeter kiosks that can entice shoppers to stop at the kiosk upon entering a store to download personalized coupons or get daily specials. “From the retailer perspective, if you’ve got the consumer in your store, the kiosk can be a great way to get information about what they’re looking for,” Hardy says.
Nelson Gomez, web kiosk business leader at NCR, says more than 80% of retailers will use kiosks within the next two years. He notes that future applications for kiosks in retail stores, besides tying kiosk software into a store’s inventory and POS systems which will allow store shoppers to order an item, may very well include allowing consumers to check if services such as prescriptions, photos or car repairs are ready. l
Chapters’ kiosk users
- 57% male; 43% female
- 90% have Internet access at home or work
- 50% have used the kiosks to make online purchases
- 63% had never used an Internet kiosk before
- 37% visit Chapters specifically to use the kiosks
- 80% will visit the store again to use the kiosk
Source: Chapters Inc.