E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
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Staples store employees, who do not work on commission, learned early on in their company’s kiosk program that kiosks can help fulfill that initiative by improving the shopping experience, Ragunas says. “Store associates have seen kiosks as a great way to satisfy customer needs and make shopping with Staples easy,” Ragunas says.
Gupta notes that retailers generally credit stores for at least part of kiosk-generated sales when store employees get involved in assisting customers at kiosks. Staples declines to say how stores are credited for kiosk sales.
In addition to bringing employees on board with kiosks, Staples says it has had to think hard about how to put kiosks to their best use. “At first, we thought we would just plop Staples.com into stores on kiosks to give store customers the option to order online,” Ragunas says. “We had been making a significant investment in a first-class e-commerce site, and we wanted to leverage that investment to give the same online experience to the people in our stores.”
But Staples was aware that other online kiosk programs had not worked well, so it wanted to make sure its web strategy aligned with store goals, Ragunas says. “A lot of retailers had tried kiosks that were not used much, so we wanted them better integrated with our store experience,” he says. “So we thought about how we could create a different way to shop in our stores, with one of the goals to offer an expanded number of items.”
Management quickly realized that a link to Staples.com could dramatically expand store selection. A Staples store maintains 7,000 to 8,000 items, but Staples.com has about 50,000.
Freeing up floor space
One of the first roles of the kiosks was to help get better use of store space for storing and merchandising products. Merchandise managers dedicated to individual categories, including office furniture, computers and general office supplies, decide which products within their categories sell best in store displays, then work with one another and with buyers to figure the best overall display of merchandise. While store displays are reserved for the most commonly purchased items, including commodities like paper and printer supplies, merchandise managers also consider kiosk sales when planning assortments. “We focus our in-store assortment on the most common items customers purchase, but our merchants do consider kiosk and dot-com sales data in assortment decisions,” Ragunas says.
When Staples reduced the average store size to 20,000 from 24,000 square feet in response to growing demand from shoppers for smaller and easier-to-shop stores, the kiosks made it easier to maintain an effective level of store inventory, Ragunas adds. And a build-to-order feature for purchasing personal computers through kiosks not only provided a new level of customer service, but also cut store PC inventory. “It’s allowed us to reduce our store inventory of pre-configured PCs, which in many cases are not what customers are looking for,” Ragunas says. “And we’ve been able to drive strong sales of PCs as a result.”
Letting store customers customize PCs online has not reduced the amount of customer interaction with store employees, Ragunas says. In fact, it has increased it. “Most kiosk customers work with employees who coach them how to use the kiosk,” Ragunas says. “We train our associates to engage customers to make sure they’ll have what they need when they get home.”
Employee interaction with customers is the primary way Staples promotes its kiosks, which are not promoted in marketing efforts other than store signs, Ragunas says.
Staples has not opted for wireless kiosks as Office Depot has, even though it had to rewire parts of some stores to get all of its kiosks in place. “It’s important that store associates and customers be able to find the kiosks in the same location consistently,” Ragunas says. It does, however, equip store employees with wireless handheld devices that they can use to search merchandise records to assist customers with product information or to place special orders online.
The kiosks also support cross-selling efforts. While shopping online at them, customers will see the usual pop-up windows that suggest complementary PC items like surge protectors. And Staples has designed the kiosk display to encourage users to combine online and regular store shopping.
Since their launch in 2001, for example, the kiosks have offered Staples store customers the option of ordering products online and either paying at the kiosk by entering a credit card number online or paying at a store POS terminal, where cashiers can recommend complementary products.
The option to pay at the store cash register has proven popular with customers, who say they appreciate the convenience of paying only once for products ordered at the kiosks as well as others picked up in the store, Ragunas says, noting that Staples routinely conducts telephone surveys of customers to get feedback on store policies. “We’re always looking for ways to make it easier for customers,” he says, “and this makes it easier for them to have one checkout interaction with us. Most kiosk customers choose to pay at the store cash register.”
In focus groups, Staples learned that many customers wanted a faster way to place online orders at kiosks before paying at the store POS terminal. They wanted to avoid having to completely log on with full account information. Under the initial system, the kiosk required customers to enter extensive personal data to place an order whether they wanted to pay at the kiosk or at the POS counter. “We created a fast-track option for them to just put in basic information like name and shipping address, then print out an order form to take to the cash register,” Ragunas says.
Because the POS software, the kiosks and Staples.com are linked through servers at Staples headquarters, orders placed at kiosks are entered directly into the POS system, letting store cashiers access them through their POS terminal. An alternative method is for the cashier to scan in a barcode on the kiosk-printed order form.