Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
Multi-channel merchants recognize they’re sitting on another bought and paid for property that they can re-deploy in a new channel. That asset is the content they’ve already developed for their web sites and the new channel is in-store kiosks.
In the early days of e-retail, site owners and operators talked about monetizing their asset-code for generating sales from consumers who flocked to sites for deals, data, and a host of other reasons. Today, that term has taken on a different shade of meaning as multi-channel merchants recognize they’re sitting on another bought and paid for property that they can re-deploy in a new channel. That asset is the content they’ve already developed for their web sites and the new channel is in-store kiosks.
“Most retailers have call centers and many other ways through which their customers can access them” says Robert Ventresca, director of marketing of Branford, Conn.-based Netkey Inc., a provider of kiosk software and solutions. “Kiosks are another channel for doing that, but a very specialized one that gives marketers the opportunity to leverage investment they’ve already made in a lot of other technologies.”
Take Seattle-based Recreational Equipment Inc., for instance. It bought into kiosks early on, installing its first one in a store in 1996. Today, it operates 160 web-enabled kiosks in 160 REI stores across the country. In aggregate, the sales from the kiosks will equal the sales of on average 25,000-square-foot store “on a fairly regular basis,” says Brad Brown, Seattle-based REI’s vice president of information services.
“It was a great way to leverage something we already had,” adds an REI spokeswoman. “The purchase of outdoor gear is information-intensive, and we looked for a long time at how we could get product information to our store employees to share with customers. The cost, until we had REI.com, was fairly prohibitive. But with REI.com in place, we had a resource.”
Indeed, “Now that they have the content and infrastructure in place, they can shift what’s been aggregated on the web into the store environment fairly simply,” says Heather Dougherty, digital commerce analyst with Jupiter Media Metrix, New York. But while web assets such as product images and content can make the leap, retailers who simply plunk their web sites into store kiosks without making adjustments for the store environment may not gain much, for the online home shopper behaves differently at a web-enabled store kiosk.
ADD at the kiosk
“Web browsers are well named for what they do,” says Doug Peter, president of Toronto-based St. Clair Interactive, a provider of technology and solutions to support self-service at kiosks and other media, such as digital T.V. “But that’s not what happens at a kiosk.” The average store kiosk session lasts less than 3 minutes, and the store shopper’s average attention to any piece of information viewed at a kiosk is only about 9 seconds, Peter says. “The presentation at the kiosk has to be much more visual, with fewer choices, offering immediate communication of what the user can do. It’s got to be fast and on demand, with no waiting.”
Jupiter estimates that kiosks will generate sales of $6.5 billion in goods and services by 2006, and influence an additional $77 billion in offline sales. And vendors of kiosk hardware, software, services and peripherals are gearing up to meet the growing demand. Netkey, for example, estimates that its inquiries from retailers and from systems integrators that assemble kiosks for retail have grown about 200% over the past 18 to 24 months. Richard Banzaca, sales and marketing director at Milford, Conn.-based Practical Automation, a provider of printers for kiosks in retail and other industries, says retail has added significantly to the demand for his company’s product. “Retail may be the single biggest segment of the kiosk marketplace at some point,” he says.
Where’s the ROI?
But kiosks aren’t only about increasing sales. Some retailers are now pushing kiosk functionality far beyond its earlier limits, finding new ways to make this new medium pay off. At Staples.com, for instance, kiosk users can compare product specs on kiosk screens, determine availability from off-site inventory of products they don’t find in the store, purchase at the kiosk and pay online or at store cash register with receipt printed at the kiosk. But the kiosks also are helping in inventory management and employee communications. They’re even being used for brand building.
While importing web content to store kiosk screens to provide pre-selected product information or promotional deals has become, relatively speaking, a piece of cake, integrating the kiosk with other systems such as inventory systems can present a huge systems integration issue, Dougherty says. But as multi-channel merchants broaden their metrics for what constitutes ROI, kiosks at every level of functionality are getting more attention from retailers. They’re leveraging expanded kiosk functionality not only to boost sales in-store, but also to acquire online customers, forecast and manage inventory needs, even to experiment with smaller-read less costly-store formats in some cases.
“Starting from the back end and making sure all the systems are integrated into the kiosks can be expensive,” says Dougherty. “But in that case you can’t really allocate all of that cost to a kiosk strategy. Because not only will it be helpful in the store, but also to shoppers looking online. And it will make a more efficient inventory system for the retailer in the long run.”
But not without overcoming some challenges first. As with many business initiatives, the path from concept to execution is strewn with potential pitfalls. The finished kiosk product presented to shoppers in-store may be an amalgam of hardware, software and components assembled from a variety of different vendors and OEM suppliers. And unless they work together seamlessly, reliability issues that dogged kiosks’ earlier days remains a problem, says Joe Trobert, president of Sparta, N. J.-based Instruments & Equipment Co.