Newsbit

Kiosks Can Add Flash And Dazzle


by Gail Walker
Point Of Purchase Magazine, 6255 Barfield Road Suite 200 Atlanta, GA 30328 Phone: 404.252.8831 or 800.241.9034 Fax: 404.252.4436

Of an estimated 150,000 interactive kiosks sold worldwide last year, 65,000 were used in some type of retail application – and 77 percent of those were sold in the United States.

While other industry applications are growing – particularly in tourism and entertainment with travel and event ticketing kiosks, and for government uses like a drivers’ license kiosk in Toronto or a European employment kiosk that lists jobs – retailing has so far captured the lion’s share of the market. A recent study by Frost & Sullivan estimates that the retail industry will still hold 36 percent of the worldwide kiosk market five years from now. "There are some great applications that kiosks are particularly suited for," says Rufus Connell, Frost & Sullivan industry manager, "and a lot of those are in retail." (Editor’s Note: automated teller machines were not included in the study.)

Connell points out that there are some things interactive kiosks are obviously good at. "A kiosk can run 24 hours a day, seven days a week, and a kiosk always smiles and never has a bad day," Connell says. But he feels one of a kiosk’s best advantages for retail use is an ability to add "flash and dazzle." The market expert has seen one unit used to sell cologne in Europe that dispenses scent into the aisle. "You not only can see the image that the manufacturer wants you to see, but you also can smell it. That’s a lot of information and a great sales tool."

Along with creative ideas for using kiosks in retail, other factors also are driving the market. For one, says Connell, the public is simply becoming more comfortable with using computers. U.S. computer market penetration now exceeds 40 percent, and younger consumers are becoming progressively more computer-literate. "If [a customer] walks into a store and there’s a computer there to take care of the transaction, [they] are more willing to use it now. A gift registry is an example, where you don’t have to wait to have a salesperson look anything up."

Connell also points to the availability of good multimedia content and application software, as well as the developing technology of network bandwidth connections (enabling real-time internet delivery) as market drivers. He believes kiosks may represent a way for retailers that have sunk big dollars into web sites to leverage their investment. "It’s cheap to go ahead and take that web site and make it look good on a kiosk and make it work for you that way," he says, although he notes it may be hard for a retailer to justify the floor space for a kiosk program.

Cost

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Price, however, is the biggest restraint to the kiosk market in general. "When it comes to trying out a kiosk program, people are not too scared of the first trial because there is usually only a prototype. But if you start thinking about doing a huge rollout in multiple locations, then price becomes a real issue," Connell explains. Frost & Sullivan pegs the current worldwide average price for an interactive kiosk at $9,400, including the hardware and operating systems software but not the design of proprietary content. While costs are beginning to stabilize, the range of prices for kiosks is tremendous, from under $1,000 for what Connell calls "PCs in a box" to more than $15,000-$20,000.

"The real dilemma in the kiosk industry is whether to provide dirt-cheap kiosks to get a lot of exposure or to provide robust, extremely durable kiosks that work perfectly every time," says Connell. "There are extreme differences in the level of durability, functionality and reliability," he continues, "and you have to be careful about sacrificing those things for price. The kiosks on the market are totally different depending on the amount of durability you need for the enclosure, the amount of functionality you need and the types of peripherals you want. You can go from a Matchbox car to a Ferrari."

While some trial programs have demonstrated positive ROI, "it has been super hard to prove that kiosks will bring in actual revenues and not just be a cost," Connell explains. Footprints are getting smaller as well, but limited floor space is another stumbling block to kiosk use in retail, as is the complicated wiring some units must have and the maintenance they require. "Not just in retail but across all industries maintenance is an issue," says Connell. "Some people don’t even want to have to load paper. And in retail stores, with the level of help we’re dealing with today, would you want to trust your [kiosk] investment to a high school student?"

For more information on interactive kiosks or information on current technology research, visit the Frost & Sullivan Web site at www.frost.com.





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