September 30, 2009

Self-service kiosks boom, saving time for shoppers and costs for stores

Great writeup on Dallas News complete with data on self-service kiosks. The writer emphasizes the deli and dining market as emerging (another way of saying disappointing so far...).

07:46 AM CDT on Monday, September 28, 2009

Source link on Dallas News

By MARIA HALKIAS / The Dallas Morning News
[email protected] / The Dallas Morning News
Bryon Wiebold does self-checkout at the supermarket, self-check-in at the airport and self-banking at ATMs.

And last year, when the 43-year-old McKinney resident discovered self-service DVD rentals for $1 at Redbox kiosks, he was all over that, too.

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"Anything I can automate, I do for the sake of time," Wiebold said. "It's not that I want people totally eliminated, but I appreciate the option if I'm in a hurry or in a bad mood."

Do-it-yourself customer service continues to creep into everyday life via kiosks, smart-phone applications and the Internet. Consumers are using touch-screens everywhere from supermarket delis to hospital check-in stations. There are even machines that give vision exams and scan feet to produce custom insoles.

Kiosk transactions are expected to surpass $775 billion this year, up from $607 billion in 2008, according to IHL Group, which tracks the self-service industry. The total could hit $1.6 trillion by 2013.

It's not surprising that kiosks are rapidly taking hold in the movie rental business. Six years after the first Redbox test in Denver in 2004, kiosks could account for nearly 30 percent of the U.S. market in 2010, according to NPD Group. Dallas-based Blockbuster Inc. said this month that it would close as many as 960 unprofitable stores by the end of next year and install 10,000 kiosks in their place.

The tipping point for kiosks came in 2001, when Kroger and Home Depot installed self-checkouts, said Lee Holman, lead retail analyst for IHL Group. "After some hand-holding, consumers have embraced it. Now there's a perception ... that 'I can do this quicker.' "

In a 2008 IHL survey, almost 90 percent of consumers said they used self-checkout "even if they don't like it," Holman said.

But it took a long time for Americans to make the leap, starting with ATMs and paying at the pump in the 1980s.

Airports were next. Today, 77 percent of Southwest Airlines passengers obtain their boarding passes online – 13 percent via airport kiosks and 64 percent from as they turn their own computers into kiosks.

Hertz first put a kiosk, fluent in several languages, at Orlando International Airport in 2007, and now about 80 percent of the car rental firm's transactions there take place at kiosks. More and more, consumers are coming to prefer self-service, say retail anthropologists.

"People want control, and self-service gives it to them," said Marcia Crossland, who uses her doctorate in engineering psychology to tell kiosk maker NCR Corp. whether people will use a technology.

Kroger has installed 10 kiosks at Dallas-area deli counters. Consumers use a touch-screen to select the product, thickness and quantity, then keep shopping until they're ready to pick up their items. On average, about 400 people per store use the service each week, said Gary Huddleston, a Kroger spokesman.

"It's awesome," said Mary Skyrde, 40, of Irving, a busy mother of three.

For stores, the self-checkouts cut costs, with one associate able to monitor up to six scanning counters, Huddleston said.

To be sure, self-service options are adding to the millions of jobs already lost to automation. The average Blockbuster store has 10 employees, so the mass closures will have an impact, even if the company shifts some workers to other locations.

More broadly, U.S. statisticians forecast that ticket agent employment will rise only 1 percent from 2006 to 2016, even as a growing population travels more. And they expect the number of cashiers to decline 3 percent over the same period as online shopping and self-checkouts increase.

'Human judgment'
United Food and Commercial Workers spokeswoman Jill Cashen said the effect on cashier jobs is gradual.

"As cashiers retire, their positions aren't being filled," she said.

"We believe human judgment can't always be replaced," she said, citing scrutiny over whether minors are using self-checkouts to buy alcohol.

Before companies can benefit from self-service, consumers must accept it. Women tend to lead the way, said Paco Underhill, shopping behavior expert and chief executive of the research firm Envirosell Inc.

"The ATM was embraced by the pink-collar woman as a way to save time over the lunch hour," he said. "Putting a kiosk holding basically the new-release wall of a Blockbuster in the front of the supermarket saves time and money."

Dining next?
Dining self-service counters and tables could be the next frontier.

It's a rare family whose members all want to order from the same vendor at a food court, so NCR is pushing touch-screen tables that let each person order from a different eatery. The family then picks up all the food and pays in one transaction at one place in the food court.

Efficiency aside, some will always prefer people to kiosks, Underhill said. "That face-to-face interaction is a way that many deal with loneliness. Getting a newspaper from a vending machine may not be as satisfying as buying it somewhere that you can say hello."

Some of the new restaurant technology will reduce, but not eliminate, human contact.

Dallas-based TableTop Media is testing a "Ziosk," an on-table device that allows casual-dining patrons to read the news, order dessert and pay with a credit or debit card.

"We're trying to support the server," said Jack Baum, chief executive. "One of the most frustrating things to people is when they want to pay" and the server isn't around.

Almost 900 self-service kiosks selling everything from iPods to skin care products to language instruction software have popped up in airports and malls since 2005.

Dallas/Fort Worth International Airport has 15 ZoomSystems Inc. kiosks, with more coming as the San Francisco company adds categories and brands.

ZoomSystems founder and chief executive Gower Smith said kiosk sales have grown even as airport and mall foot traffic have fallen by up to 25 percent.

Mini-electronics stores
Macy's Inc. uses ZoomSystems' kiosks in about 400 stores to sell electronics, including PlayStation Portable gaming consoles and Sony eBooks. Branded as eSpots, the kiosks put the chain in the electronics business in 28 square feet per store, said Roger Zuberbier, corporate merchant over the kiosk business. Kiosk transactions have risen as overall sales have declined.

But Smith admits that not all merchandise is right for kiosks.

And Underhill, the shopping behavior expert, agrees."It can't just be technology in search of a customer," he said. "Saying, 'We can do this, and isn't it cool?' alone won't work. It's not ready if it doesn't result in money or timesaving."

Staff writer Karen Robinson-Jacobs contributed to this report.


•Check in for a mammogram at Centennial Medical Center in Frisco or Lake Pointe Medical Center in Rowlett.

•Weigh a letter or package and buy postage at the post office.

•Call home or play a video game after a day of soldiering in Iraq and Afghanistan.

•Turn a piggy bank's contents into a gift card at a Coinstar machine.

•Get a free vision exam and eye-care referral at one of SoloHealth's EyeSites.

•Buy movie, ski lift, museum, train and bus tickets.

•Apply for a job at Walmart or Target.

•Print documents at Staples.

•Browse additional, off-premises inventory at some J.C. Penney stores.

•Research and buy a camera at a Macy's eSpot.

•Pay utility bills at 7-Eleven.

•Rent a car from Hertz.

•Reload prepaid phone cards.

•Flash a prescreened passport after entering the country at Dallas/Fort Worth International Airport.

•Buy and load a game card at Dave & Buster's.

•Get directions and a directory at a mall or office building.

•Check out at a grocery store.

•Rent DVDs.

•Get cash or deposit a check at an ATM.

•Pay at the pump for gas.


•Best Buy and Walmart are testing kiosks that will buy used video games.

•Blockbuster plans kiosks that will rent video games and DVDs.

•Sam's Club is testing a kiosk that scans feet and either produces or orders custom insoles.

•Google and OnDemandBooks are teaming up on paperback printing/vending machines.


Coinstar Inc. is holding "The Next Big Idea Contest" to find other promising uses for kiosks. The deadline to enter is Oct. 8, and the prize is $10,000. For more information, visit

SOURCES: NCR Corp.; IHL Group; Conifer Revenue Cycle Solutions; Dallas Morning News research

Posted by staff at September 30, 2009 07:46 AM