June 15, 2004

Airline Checkin

Kiosks : Earning Their Wings

June 2004, Chain Store Age Magazine
By Matthew Haeberle

Younger consumers are helping to drive kiosk usage

Kiosks are becoming more prominent in the retail arena. More importantly, they are receiving recognition for their ability to make money for companies. Helping to drive this change is an increase in kiosk usage by younger consumers.

"Tech-friendly consumers, mostly younger ones, are a key component that is helping to drive the change in kiosks," said Robert Goodwin, a VP with Stamford, Conn.-based technology consulting firm Gartner, Inc., who spoke at the KioskCom show in Las Vegas in April. "In addition, more industries are getting involved with kiosks, which means that consumers are seeing them in every area and industry. This is bringing about a good diversified installation base."

One industry that has seen enormous success with kiosks is the airline industry. Most major carriers offer some form of self-service check-in at their counters. According to Goodwin, the time savings and convenience factor of kiosks are boosting usage at airports and making those same consumers aware of the possibilities of kiosks in other applications.

"Kiosks have a fast implementation, which is important when talking about ROI," he said. However, Goodwin also noted that it is of the utmost importance to place kiosks in a prime and prominent location and to have an active staff that brings consumers to the kiosks.

Opportunity for upsells: Critics who complain that kiosks are not a big-time moneymaker should talk with Northwest Airlines. Brian Ficik, manager of e-commerce sales and strategy at the Eagan, Minn.-based airliner, noted during KioskCom that Northwest collected $15 million in upgrading fees in 2003.

"When a customer begins the check-in process, the kiosk is able to see what fare they paid for the flight," Ficik explained. "This grants us the opportunity to offer them either an upgrade to first or business class for a small fee, or a meal voucher to other elite travelers who were not able to upgrade their seats."

To date, 75% of Northwests overall check-ins are via self-service. Of that figure, 85% of the companys passengers use the airport kiosks, while the remaining 15% print their boarding passes on line prior to leaving home. Business travelers also can print out a boarding pass for their return trip on the day of their original departure if the return flight occurs within roughly 30 hours. Northwest currently has 850 kiosks in 190 airports throughout North America.

Another airliner that has experienced rich success with its kiosk application is Houston-based Continental Airlines, which has tried to make its kiosk check-in experience as simple as possible. According to Christopher Frawley, managing director of e-commerce at Continental, you have to have the discipline to know what flows with the business model and when to resist extraneous add-ons.

"It is more about what you can take out of the process rather than what you put into it," said Frawley. "Customers dont like to read or think, so you have to make the screens as intuitive as possible for them. You dont want the customer to have any questions. We want to make the kiosk better than if the customer went to the counter to check in."

When Continental first launched its kiosk application, the machines were used for less than 30,000 check-ins per month. At present, 50,000 transactions are processed each day through 779 kiosks in 130 airports. Unlike Northwest, Continental does not offer its customers the opportunity to upgrade their tickets, preferring instead to give those benefits only to elite members. However, it does give its customers the chance to buy headphones, drinks or pay for excess baggage at the kiosk.

One point of differentiation Continental does make for its elite customers at kiosks during the check-in procedure is to print specialized boarding passes. According to Frawley, this makes other employees aware of the status and value of frequent fliers.

"Personalization expresses the highest level of sophistication," noted Frawley. "We view kiosks not as a way to move tasks away from people, but to make it better than what we could do with a person. We try to tailor the transaction to what the customer needs to make it relevant for them. The simplest point of personalization is to welcome them with their name."

Posted by Craig at June 15, 2004 04:14 PM