September 14, 2010

Research - Self-service kiosks will see $740 billion in transactions this year

New research report from IHL puts $740B number selfserve transactions this year.

Self-service kiosks will see $740 billion in transactions this year: Study | SelfServiceWorld | Self Service World

Burney Simpson Editor
• 13 Sep 2010

Consumers have made self-service kiosks a part of every day life and will transact $740 billion in business through the devices this year, according to a new research study conducted by the IHL Group. However, while the use of kiosks has risen tremendously in recent years that growth rate will slow as consumers turn to their mobile phones for certain transactions.

That massive transaction figure includes certain airline tickets, DVD rental, transit, self-checkout at retailers, food orders, bill payment, hotel check-in, cinema tickets, and other transactions, according to Lee Hohlman, co-author of the “2010 North American Self-Service Kiosks” study from Franklin, Tenn.-based IHL Group.

The $740 billion represents growth of 9 percent from $678 billion in 2009, with self-checkout and ticketing kiosks accounting for the great majority of that value. DVD kiosks may be highly visible to the general public but transactions through these devices account for less than 1 percent of the value conducted through all kiosks. That’s because the value per transaction, often just $1 per DVD, is so low.

Retail self-checkout continues to grow. IHL has reported that major supermarket firms like Kroger and Albertson’s have seen consumers use the self-checkout kiosk for “anywhere from 15 to 40 percent of the daily transaction volume and 12- 30 percent of the daily dollar volume.”

Airline use is solid too. At Southwest, Northwest and Delta, as much as 70 percent of flyers at domestic check-in use the kiosks, IHL found. For many passengers there isn’t much choice whether they want to use the device. Still, IHL finds that some airlines report check-in can take as little as 30 seconds when done through a kiosk.

Airlines are an industry where kiosk use has paid off with benefits for the customer and the company. Checking in so quickly leads to great customer satisfaction, and delivers to a company a “significant return, whether in financial or customer appreciation/loyalty terms,” according to the report.

In the report Hohlman and co-author Greg Buzek put self-service kiosks in six major categories:

• Self-Checkout, such as that seen at grocers and convenience stores,
• Ticketing Kiosks, which covers airports, amusement parks, parking, movie theatres, and public transit,
• Check-in, such as hotel and motel registration,
• Food Ordering, at quick-service, take-out and casual restaurants,
• Postal kiosks, located in the U.S. Postal Service,
• Other Retail, which covers DVD rental and other retail and hospitality kiosks.

The report lists the number and type of kiosks shipped historically and provides forecasts for each type of kiosk, both in terms of units shipped and revenue transacted. The report also details best practices and best-in-class machines for each class of kiosk.

Most of the six categories continue to grow in consumer use and value of conducted transactions. One apparent failure is the U.S. Post Office.

In 2004, the post office made plans to install about 2,500 kiosks and study their adoption by the public, according to Hohlman. Though some postal purchases require the assistance of a clerk, about 80 percent of the transactions conducted at the window could have been done with the kiosk, he says.

Despite this, kiosks at the post office never gained wide acceptance, and there was no follow through on plans about two years ago for further expansion, Hohlman says. Today, self-service kiosk use at the post office has dropped to virtually zero, he says.


Put the kiosk transactions at top of bellcurve and points to mobile as new growth mechanism. No news there. Interesting on the categories the IHL people seem to have looked at major press releases and feature stories and then skimmed off the top to come up with their categories.

Most people know what categories are constantly called out on media sites: self-checklout, ticketing, check-in, QSR, Postal & DVD. Appears to be driven more by audience expectation than by actual revenue numbers.

Generally reports like these tend to disappoint us and this one doesn't cast any new light.

Self-service kiosks will see $740 billion in transactions this year: Study | SelfServiceWorld | Self Service World

Posted by staff at September 14, 2010 09:03 AM