E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Shining a light into the kiosk market; how one retailer made kiosks work
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.
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.