MARKETING TECHNOLOGY: Checking out kiosks

Mar 01, 2000 10:30 PM  By

Electronic kiosks provide a new channel for sales and service

Electronic kiosks are branching out from their roots as gift-registry applications in department stores. Today, some catalogers are using kiosks as another way to reach customers, provide additional product information, and enhance customer service.

Plano, TX-based cataloger/retailer J.C. Penney is testing four kiosks at stores in Texas and Florida. “The kiosks help in building brand awareness and offer another way to serve customers,” says spokeswoman Stephanie Brown.

For instance, one kiosk is placed between the juniors’ and young men’s departments. While their parents shop, teenagers can use it to view an electronic version of Noise, Penney’s teen magazine. Another kiosk in the home goods department lets shoppers check out a wider assortment of products than is displayed on the floor.

When customers approach the kiosk, its screen says, “Touch me.” From there, customers can go directly to the J.C. Penney site or first complete a customer survey. Once at the site, customers with e-mail addresses can place orders; the company is working on a program that will let customers without e-mail addresses also make purchases.

The company’s kiosks went up in November, and sales results are not yet available. But Brown says that data from surveys completed by about 700 customers indicate that most were “very receptive” to the kiosks.

Statistics on the number of electronic kiosks currently deployed are difficult to come by. But industry observers agree that they started to come into their own over the past holiday season. “Last year was a critical turning point,” says Peter Wolf, vice president of targeted marketing with Bristol, PA-based Stores Automated Systems (SASI), which sells hardware and software solutions for retailers.

For instance, Federated Department Stores, a Cincinnati-based cataloger/retailer that includes Bloomingdale’s, Macy’s, and The Bon Marche, launched its kiosk program in November. Selected Federated stores offer the kiosks, through which customers can electronically buy men’s and women’s gifts, fragrances, jewelry, watches, and home and office products.

Each division’s kiosks offer different functions. Visitors to Bloomingdale’s 12 kiosks (at New York, Chicago, and Los Angeles stores) were able to view the entire Bloomingdale’s holiday catalog, find gift suggestions, and make purchases. Customers who use the three kiosks that Macy’s installed in its flagship New York store in December can use the product locator function to find their way around the store in addition to purchasing items.

Catalogers without retail locations can reach new customers by placing kiosks in high-traffic locations. For example, a cataloger that sells products for businesspeople may rent space to put a kiosk in an airport to gain exposure to business travelers.

As a result, catalogers can gain a physical presence more quickly and less expensively than they could with full-blown stores, says S. Berton Hensley, cofounder/vice president of business development for eOSK.com, a New York-based provider of kiosk hardware and software. “The time and dollars are a fraction of what it would take to create a brick-and-mortar operation.”

Vendors’ estimates of the cost for kiosk hardware range from $3,500 to $7,000; usually, the cost per kiosk decreases with volume. Software cost estimates are harder to come by, as they depend on the complexity of integration with a cataloger’s other systems, as well as the number and type of features desired. For instance, kiosk software with a specialized function, such as printing labels for customers who drop off film for developing, will cost more than software that only provides information. Some vendors recommend a software budget at least equal to the cost of the hardware. So a rollout of 10 kiosks might cost $70,000-$140,000.

Most kiosks are intuitive touch-screen applications. To place orders, customers swipe their credit cards through magnetic readers similar to those found at gas stations with pay-at-the-pump capabilities. Typically, a kiosk application mirrors a company’s Website but is a separate program. After all, the objectives of a Website and a kiosk are different, says Des Martin, vice president of general merchandise industry marketing with NCR Corp., an Atlanta-based provider of kiosk software. For instance, Websites encourage browsing, while kiosk visitors prefer to quickly find the information they need.

Kiosks can take up surprisingly little room – about 12 inches-14 inches across – and can be mounted on a post, a wall, or a shelf, says Robert Kramer, an NCR spokesman. Kiosks built for public areas require more room, as they come with a rugged outer shell, much like that of an ATM.