Kiosks in Retail 101 SPECIAL REPORT

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1 SPECIAL REPORT Kiosks in Retail 101 Self-service kiosks increasingly are becoming a fixture of the retail landscape. As they become more and more popular, the devices are changing the way retailers serve their customers. DEVELOPED AND PUBLISHED BY: SPONSORED BY:

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3 SPECIAL REPORT Kiosks in Retail 101 SPONSORED BY: Self-service kiosks increasingly are becoming a fixture of the retail landscape. As they become more and more popular, the devices are changing the way retailers serve their customers. By Richard Slawsky Digital Signage Today Introduction History books peg the first vending machines as being developed by the Greek engineer and mathematician Hero of Alexandria in the first century. The device he invented poured holy water after users inserted a coin, automatically shutting off the flow after the proper amount was dispensed. Today, the concept of Hero s holy water dispenser has been transformed into a plethora of devices that dispense everything from cupcakes to ipods. In addition, they allow users to ask questions, develop photos, fill out forms and pay for their purchases. Self-service kiosks are changing the way retailers serve their customers. Kiosks help handle the mundane chores customers would rather handle on their own, such as flipping through a catalog or checking the price of a product, freeing salespeople to engage in deeper and more complicated interactions with those customers. The place self-service kiosks have taken in the retail industry was highlighted by a survey commissioned by Chicago-based Retale, developer of a mobile app that connects shoppers with major retailers. The survey examined consumer self-service checkout adoption among brick-and-mortar retailers focusing on factors including convenience, challenges and desired improvements. More than 1,000 adult men and women across the United States were polled for the study. 3

4 The survey found that the overwhelming majority of shoppers (85 percent) had used a self-service checkout kiosk, with just 15 percent never having done so. But while two-thirds (67 percent) of all respondents said that self-service kiosks are convenient versus 33 percent who said inconvenient, many of those people said that despite the convenience the experience could be a lot better. Another study, conducted by Albany, New York-based Transparency Market Research, indicated that the global kiosk market is expected to top $1.2 billion in Clearly, then, self-service kiosks will play an ever-increasing role in retail going forward, taking on a wider variety of roles and serving customers in ever-increasing ways. In this mini-guide, we ll look at some of the obvious uses of kiosks in a retail environment, some of the not-so-obvious uses and some of the ways kiosks may be used in the future. The navigation tools within the units are designed to complement how consumers shop naturally, and the vast array of information that is available will enhance the shopping experience. Jim Ward, vice president of brand development at CBL Properties Show me the way For the customer, the retail experience is part of a journey. The customer leaves home or work, travels to the chosen retail location, makes the purchase and travels back from whence he or she came. More and more, the customer encounters a kiosk at each stage of the journey, beginning with one that provides direction to the desired item. Many of us, for example, have had the experience of visiting a mall or shopping center and searching for the store directory signage to point us in the right direction, only to find that signage to be outdated. The property simply hadn t yet gone through the costly process of having the signage updated. Some shopping center operators are looking to replace that bland directional signage with interactive kiosks. In addition to showing the quickest route to the shoppers desired location, the kiosks can display up-to-the-minute information about sales or other events at the center. When the kiosks aren t being used to answer customer questions or give directions, they can help generate incremental revenue by displaying advertising or other messaging. The kiosks can serve up ads for tenants of the center as well as third parties such as nearby restaurants and bars or hotels. In addition, those kiosks can interact with customers phones to provide QR codes for special offers and NFC tags to tap for discounts or sales info. 4

5 For example, in 2014, Edmonton, Alberta-based interactive technology provider Visionstate Inc. signed a deal with mall operator CBL & Associates Properties Inc. to implement a network of interactive kiosks throughout retail centers across the United States. Plans called for the companies to deploy as many as 90 kiosks at 30 CBL properties. CBL owns, holds interests in or manages 150 properties in 29 states, including 88 malls and open-air centers. The kiosks are designed to help shoppers find what they are looking for at the shopping centers, including products, shops, services or other amenities. In addition, the kiosks are being outfitted with large LCD screens for thirdparty advertising and situated in high-traffic areas. CBL is always looking for new technology partners and business platforms to provide our shoppers with greater convenience, functionality and point-ofsale communication, Jim Ward, vice president of brand development, said in an announcement. The units will provide our shoppers with customized real-time information directly from retailers, advertisers, local emergency officials and other related parties, Ward said. Additionally, the navigation tools within the units are designed to complement how consumers shop naturally, and the vast array of information that is available will enhance the shopping experience. Depending on the size of a particular store, kiosks can be used to point the way to different departments as well as to provide product and other information. Earlier this year, North American boating and accessories retailer West Marine began deploying West Advisor kiosks throughout its stores to provide product details and video-based buyer s guides. West Marine, which operates more than 300 stores in 38 states, chose the SA3000 digital signage appliance from DT Research combined with 24-inch touchscreen displays as a way to deliver dynamic and interactive product and educational information in a way that was efficient to update. Customers can use West Advisor kiosks to access more than 75,000 products and an interactive store map. The media players also are connected to 32- and 55-inch displays installed throughout the stores, displaying seasonal advertising and promotional and lifestyle videos at key traffic areas. The world s largest boating supplier retailer now has a dynamic system to educate customers to stores on their vast product offering, DT Research said in an announcement. 5

6 Montreal s World Trade Centre deploys wayfinding kiosks Montreal s World Trade Centre has installed wayfinding kiosks throughout the complex to guide visitors. The kiosks were developed by igotcha Media, developers of digital signage, video walls, kiosks and content. The 47-inch kiosks are interactive touchscreen stations aimed at improving customer experience and guiding visitors to the Centre, a unique complex spanning an entire city block that consists of several restored historic buildings under a glass roof. Home to dozens of boutiques, restaurants, services and more than 50 offices, the wayfinding kiosks help visitors find their way, inform them of promotional opportunities and simplify access to on-site services. The kiosks provide merchants an interactive platform for video and text communication, data catching through newsletter registration and a cloud-based content management system. Given the size of our facility and its unique layout, providing directions can be challenging, said Jacques Rajotte, property manager of World Trade Centre Montréal. Our kiosks are strategically positioned in high-traffic areas and enhance the customer experience by providing a wealth of information with an intuitive interface. Providing your favorite products With economic factors such as rent overhead and staffing always a concern for retailers, in-store kiosks are serving as silent salespeople, maximizing square footage by offering products not carried in the store. In addition, they allow operators to expand their offerings light years beyond the capacity of their physical location. Endless aisle kiosks can let shoppers browse inventory in the back storeroom, at other stores or at the warehouse, allowing them to purchase the item for home delivery. Stores are extending their inventory beyond the four walls by offering a full e-commerce site within the store, said Brad Fick, president of Chanhassen, Minnesota-based retail systems integration service provider Direct Source. When inventory is unavailable, out of stock or damaged, store associates can help shoppers order the item within the store, Fick said. Retailers can also carry more styles, colors or sizes that are only available online. 6

7 Leveraging endless-aisle kiosks can help brands reduce the size of the physical store and the amount of inventory each store needs to carry. For example, [our] stores may not carry a wide assortment of baby gear beyond apparel, such as car seats, cribs and strollers, but we have a much wider assortment available online, Janet Schalk, CIO for retailer Kohl s, said in an interview with the news website Retail TouchPoints. Our shoppers can purchase those items via kiosks while they are in the store. Inventory can be managed on a regional, national or global level, offering the ability to turn inventory faster for short-lifetime products such as fashion trends and reducing leftover inventory at the end of the season or when a fashion goes out of style. In addition, those kiosks can provide in-depth information about a retailer s products. Customers often want to find out more details about a product, but many retail stores are short-staffed, said Brian McClimans, vice president of global business development for Aurora, Illinois-based technology solutions provider Peerless-AV. Kiosks can give customers the ability to scan the barcode of a product, and it will immediately display additional information about that product. Stores are extending their inventory beyond the four walls by offering a full e-commerce site within the store. Brad Fick, president of Chanhassen, Minnesotabased retail systems integration service provider Direct Source. Those kiosks can even let shoppers design or customize their own products in their desired styles and color combinations. In 2013, for example, athletic shoe brand New Balance teamed with shoe-and-apparel chain Foot Locker to launch the New Balance customization kiosk in the chain s Times Square location in New York. The kiosk allows shoppers to interact via touchscreen digital signage to design a customized pair of New Balance 574 sneakers. According to Foot Locker, shoppers can select the colors for various segments of the shoe upper, pick from various materials and even opt for custom writing on the shoe s heel. The company estimated the various options made for 48 quadrillion, or 48,000 billion, combinations. And kiosks are being added to the fitting-room area to suggest add-ons and allow the customer to try on a wider variety of items. Shoppers simply scan the barcode of an item, and the kiosk displays a list of accessories designed to match that item. In some solutions, the kiosk detects an RFID tag mounted on the item and displays a list of potential add-ons automatically. Shoppers scan the items they want to try on, and those [add-on] items pop up on the display, Fick said. They can then view complementary items or press the service button to request new items or different sizes to be brought to the dressing room, with those alerts possibly coming to an associate s 7

8 mobile device. In the future, shoppers may be able to check out by simply scanning and paying right at the display. Eventually, though, it comes time to pay the bill once the shopping spree is over. More and more, that process is taking place at a self-service checkout kiosk. According to the Retale survey mentioned earlier, the most popular reasons for using a self-service checkout kiosk were: I have a limited number of items (72 percent); there was no line (55 percent); I prefer to keep my transactions and financial information private (13 percent); and I don t like interacting with cashiers (12 percent). Among millennials, I don t like interacting with cashiers was 8 percentage points higher than the average. Almost a quarter of all millennials use self-service kiosks to avoid any sort of interaction with cashiers, said Pat Dermody, president of Retale. As a result, there is a growing demand for more automation and innovation throughout the checkout experience, via integrations with smartphones, wearables and other mobile devices. This will add to the convenience factor that already appears to be key to the experience. Staples launches in-store kiosks for endless aisle In 2013, office supply chain Staples launched omnichannel prototype stores that feature endless-aisle kiosks and consultation areas for small-business customers or what the company calls the future of retail. Staples said the stores will allow it to leverage its extensive real estate and digital capabilities. The first pilot stores, located in Norwood, Massachusetts, and Dover, Delaware, also will serve as test labs for new products and services. The move is part of an effort to reduce the size of its stores by 15 percent. In 2014, kiosks at one of its stores were seeing double-digit sales gains. The Staples.com kiosk provides customers with access to more than 100,000 items, including tech products, furniture, school supplies, and cleaning and break room items. Customers can complete their transactions at either the kiosk or the store register, and the retailer is offering free, next-day delivery for items ordered through the kiosks. Our stores make efficient use of space while offering more products and services than ever through our mobile and online features, said Demos Parneros, president of Staples North America stores and online. We also know that shopping is an occasion, and we ve created a fun experience for our customers. We re very proud of our omnichannel stores, and this is just the beginning as we ll continue to evolve our network. 8

9 Give me a reason While in the previous examples a kiosk serves to expand the products a retailer can offer and speed up the checkout process, kiosks also can be used to expand the services a retailer can offer. In many cases, the kiosks allow those services to be offered in an easier and less costly way than having a sales associate perform the task. While those services may not fall directly in line with the retailer s main offerings, they give shoppers a reason they otherwise may not have had to come into the store. Photo-developing kiosks, for example, rode the wave of the digital age, allowing consumers to bring in their cameras flash drives or upload images from their home computers for printing at the store. Rather than having to drop off a roll of film to have it developed, those consumers had nearly instant access to hard copies of their photos in almost any size they desired. First appearing on the scene in the mid-1990s, those devices have become so commonplace they re nearly a given for most big-box retailers. More recently, Boulder, Colorado-based minutekey began offering consumers a quick and easy way to duplicate keys, while allowing retailers to avoid the backup that can occur when someone in the auto department has to stop serving customers to make a key. Like the photo kiosks, the units spare those retailers the investment in training and equipment needed to provide that service in-house. Users select their key using a touchscreen interface and insert their key, and in about a minute the kiosk automatically creates a duplicate. Check-cashing kiosks allow unbanked or underbanked consumers to cash a payroll check, while in-store bill-pay kiosks allow them to take care of the electric or cable bill. Most of us also are familiar with the DVD-rental kiosks at the fast-food drive-thru or near the entrance of many big-box retailers. While some of those services may not generate a massive revenue stream, they serve as ways to attract customers, increasing revenue in the process. Consider, for example, someone who has accumulated a coffee can full of change and wants to convert that to paper. Where better to do so than at the coin-counting kiosk at the front of the local grocery store. And while that person is at the store with a few dollars in hand, it s as good a time as any to stock up on a gallon of milk or a loaf of bread. The type of services those devices offer is expanding nearly on a daily basis. Bellevue, Washington-based Outerwall, which owns the Redbox and Coinstar brands, in 2013 acquired ecoatm, a network of kiosks that accept used 9

10 mobile phones, tablets and MP3 players for cash, positioning itself as the Coinstar for used devices. As of the end of Q1 2015, the company had 2,140 of its recycling kiosks installed in malls and shopping centers around the country. Over the last three years, the units have recycled or enabled the reuse of more than 4 million devices. Beyond providing a service, in some cases kiosks are being used to dispense a variety of small- and big-ticket products ranging from cupcakes to ipads, allowing retailers to expand their footprints into areas too small or not economical for a brick-and-mortar location. Most of us have seen automated retail stations in the mall selling Proactiv skin care products; those kiosks, by San Francisco-based ZoomSystems, are located in dozens of shopping centers around the country. Zoom also makes kiosks that sell electronics from Best Buy, Kindle readers from Amazon, cellphones from TracFone and cosmetics from Benefit. More recently, Miami-based Pharmabox Inc. has begun rolling out its Automated Drugstore, a self-service kiosk that carries more than 140 items typically found in a local pharmacy. The automated stores offer products ranging from headache medicine to razors and toothpaste. The company plans to place the units in high-traffic locations including airports, hotels, business centers and apartment complexes where it may not be economical to open a physical location. Self-service beer kiosks to intoxicate Boise The Boise (Idaho) TechMall, a hub for businesses and business owners in pursuit of growth tools, has deployed the Boise HotSpot, Idaho s first completely automated self-serve beer and wine kiosk from the Chicago-based company PourMyBeer. The company is a tap solutions provider that distributes mobile self-serve beer tables, fixed beer walls, mobile beer walls, fixed draft beer tables and mobile draft self-serve tables. It seemed appropriate to incorporate the latest technology in hospitality into our very own HotSpot, Mike Fias, owner of Boise HotSpot, said in a statement. The system has been working out great since we opened. Our customers are able to taste different varieties of beer and wine at their leisure. Age-appropriate patrons are issued an RFID Beer Card by our staff. They tap the card next to the brand they want and pour however much they feel they would like to try. The customer pays for exactly what they pour, kind of like pumping your own gas, and for exactly the number of ounces they pour. I m not sure who s enjoying the beer wall more, me or my customers! 10

11 Unlimited applications The potential of kiosks in retail is limited only by the imagination of the developer and the tasks for which consumers will use them. Some retailers are incorporating kiosks in a marriage of online and brickand-mortar retailing. Shoppers order a product online and print a receipt. They then take that receipt to a brick-and-mortar store, scan their receipt at a designated pickup kiosk and have that product brought to them. We re seeing those types of kiosks pop up much more in the retail space, McClimans said. A variation on that system is offered by NEXTEP SYSTEMS, based in Troy, Michigan. NEXTEP has deployed its Deli kiosk-based solution in supermarkets, including the family owned Heinen s Inc. in northeast Ohio. The deli counter typically had been a point of congestion for the company, so the company set out to deal with the problem by deploying touchscreen ordering kiosks. The solution allows customers to place their deli order on a touchscreen kiosk located at the front of the store when they first enter. The order is routed to the deli, and customers are free to continue shopping while it is being prepared. They can elect to be notified via text when their order is ready, or watch order-status monitors located throughout the store. On the other side of the pendulum swing, kiosks can deliver assistance that may be beyond the scope of what a sales associate can offer. For those facing the chore of opening up the backyard swimming pool for the summer, Grafton, Wisconsin-based Frank Mayer and Associates Inc. partnered with Clorox Pool & Spa, a provider of swimming pool and spa care systems, to develop the My Pool Care Assistant Kiosk. Already rolling out in select Walmart stores, the countertop unit allows consumers to test their pool and spa water by placing a small amount on a testing strip. The kiosk then analyzes the testing strip to recommend a product match. And in Virginia, shoppers can create personalized greeting cards via kiosks developed by startup Card Isle. Card Isle was born from a Virginia Tech class project in 2013, according to a report by the Roanoke Times. Customers use one of the company s 10 kiosks located around Blacksburg and Roanoke, Virginia, to select a generic or personalized greeting, choosing from 1,200 pieces of art to add to the card. The company plans to develop an app to allow users to design cards on their computers or mobile phones and print them out at a kiosk. 11

12 Card Isle is in the process of adding 50 kiosks by the end of 2015, with more than 100 on tap for the following year. Kiosk applications are being driven even by online commerce. Vancouver, British Columbia-based Netcoins provides software to retailers that allows them to create virtual bitcoin ATMs that require only a small retail footprint. Bitcoin ATMs allow users to go to an ATM at a retail location, enter their money and store it in their digital wallets for use on the Internet. The interesting result that early adopter stores have realized is a potential for double-digit increase in spinoff sales for non-bitcoin related goods, Netcoins CEO Michael Vogel said. This is partly to do with the young, high-income, tech-savvy demographic that makes up much of bitcoin s user base. Retailers see bitcoin as a way to bring in this ideal customer demographic, which is especially difficult in an age when most of this demographic shops exclusively online. Although not shopper-facing, some kiosks are starting to be a fixture in the back room. Some retailers are moving toward having employees clock in and out, make shift or time-off requests and other workforce activities on an employee kiosk, Fick said. These portals can do double duty as retailers start to roll out videobased employee training, instructional weekly merchandising and display videos and other digital resources to help employees learn, improve and sell. Credit kiosk co inks deal with retail group Versatile Credit, a provider of kiosk solutions linking lenders with consumers applying for credit in retail stores, has partnered with MEGA Group USA, an organization of retailers focused on delivering excellence in products and service. The Versatile Credit kiosk solution provides a private, secure and fast credit application process for consumers, the company said. Retailers are able to benefit from applications denied by a primary lender being sent instantly to a secondary lender reducing credit denials by up to 40 percent. Retailers using the Versatile Credit solution typically see a 20 percent increase in credit applications; with more credit in consumer hands, the average ticket increases by 15 percent or more, according to Versatile. Our members are most successful when they make it easy for consumers to make purchases, said Mallory Parker, vice president of business services at MEGA Group USA. Versatile Credit s self-service kiosks have an impressive track record of increasing credit applications, approvals and revenue. Our new partnership adds an increasingly important service to our member program. 12

13 Conclusion There s no doubt about it: Kiosks have become a key part of the retail infrastructure, and their importance only will continue to grow. In addition to the uses already discussed, potential applications include functions such as managing loyalty programs and accepting payments for storebranded credit cards. While a reputable partner can be an excellent guide to best practices for a retailer s kiosk deployment, a few things are important to remember. Retailers truly need to realize that a kiosk is an extension of their brand, not just a promotional item. Brian McClimans, vice president of global business development for Peerless-AV. About the sponsor: LogMeIn Central is the IT command center for your retail business. Central delivers powerful remote access that allows you to manage and maintain all of your kiosks through safe, secure connections. Features like Automated Task Management, Windows updates, and alerts and monitoring make it easy to take control of critical IT tasks. Retailers truly need to realize that a kiosk is an extension of their brand, not just a promotional item, McClimans said. They should seek out a company that knows what they are doing, not just someone that will provide them with the least expensive solution. In addition, looking at kiosks as a way to eliminate staff is likely to result in failure. Retailers should use technology to aid them in any pain points they are having in providing a knowledgeable associate, TimeTrade CEO Gary Ambrosino told RetailCustomerExperience.com. TimeTrade recently published The State of Retail, a report designed to ascertain the current perceptions and behaviors that drive retail shopping. TimeTrade surveyed 1,029 consumers. The biggest pain point is making sure that resources are readily available when the customer shows up to the store, whether it be a walk-in or a scheduled appointment, Ambrosino said. Store associates and managers must use technology to help with collaboration to provide superior service. Keeping those things in mind, one of the key pieces of advice experts give is to avoid deploying kiosks or other technology, for that matter simply for the sake of having a flashy new piece of technology. Instead, have a particular function in mind and do plenty of research before committing to a kiosk project. Here s hoping your kiosk project is a resounding success! 13