February 4, 2004, 12:00 AM

Kiosks finally get some respect

Web-based kiosks have progressed far beyond serving as quirky machines for various purposes, emerging as a key ingredient of multi-channel retailing.

Web-based kiosks may not be the ideal tool for every retailing purpose, but the utility and convenience they bring to merchants is placing them front and center in more retail strategies. They’ve progressed far beyond serving as quirky machines for various purposes, emerging as a key ingredient of multi-channel retailing. “The implementation of kiosks in retail operations is increasing as retailers realize the multiple functions kiosks can accommodate,” retail research and consulting firm LakeWest Group LLC says in its 5th Annual POS Benchmarking Survey.

LakeWest notes that 33% of the 100 specialty retailers it surveyed are using in-store kiosks to serve customers, up from 25% a year ago. More than half, or 56% of the respondents with kiosks, are using them to let store customers place orders online, LakeWest says.

Staples Inc. is one of those chains that have made good use of kiosks. Speaking to the NRF’s annual convention, The Big Show, in New York last month, Joe Doody, president of North American delivery for Staples, said Staples has used kiosks to replace SKUs that stores could no longer stock after remodeling that reduced some stores by 4,000 square feet. “For the few SKUs we did take out, customers can order them online in the store and get them delivered,” he said.

Staples spent about $400,000 per store reducing its size from 24,000 to 20,000 square feet, then added the kiosks. “It was definitely worth the investment,” Doody said.

Rival Office Depot Inc., though, while operating a very successful web site with $2.5 billion in annual sales, is awaiting the development of web-based kiosks as a way to expand store assortment. “We are looking at what grocery stores and airlines are doing to educate the masses about kiosks,” Monica Luechtefeld, senior vice president of e-commerce, said at the NRF convention She predicted that 2005 will be the year that retailers will have to start deploying web-based kiosks to remain competitive.

LakeWest notes that kiosks are estimated to generate $6.5 billion in retail revenues by 2006. But to get the most use-and revenue-out of kiosks, it says, retailers should also let customers access kiosks for such purposes as researching product information, accessing their entire web site and checking the availability of products in other stores and channels. “Multi-channel retailers who leverage the use of kiosks to allow customers to perform functions other than simply ordering online will capitalize on that growth,” LakeWest says.

LakeWest also notes that respondents rated the ability of customers to search cross-store and cross-channel availability of products as the most important goal of multi-channel functionality, scoring this 4.06 on a scale of 1 to 5.

Putting kiosks to use

(Kiosk functions provided to
customers by % of retailers)

Placing orders on the web 56%

Checking product information 33%

Searching for product availability 22%

Accessing retailer’s web site 11%

Source: 5th Annual POS Benchmarking Survey,
LakeWest Group LLC

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