Reprinted from National Petroleum News
The convenience and petroleum retailing industry
begins to explore digital kiosks as brand enhancement and profit centers.
By Keith Reid
Digital kiosks have been around for a number
of years, typically providing information services and customer surveys
in a variety of applications. With the rise of the Internet, and increased
Internet connectivity at retail sites nationwide, digital kiosks are seen
as providing new opportunities to add profit centers and improve customer
service. Radiant Systems, Inc., headquartered in Alpharetta, Ga., believes
that digital kiosks are going to become commonplace in the retail environment,
and that 75 percent to 85 percent of all retailers will have a kiosk integrated
into their bricks-and-mortar sites by 2003.
A Radiant kiosk helping speed up the order process in a foodservice
Supermarkets, movie theater chains and the hospitality industry have
received much of the early attention. Now, convenience stores and petroleum
retailers are being looked at as potential benefactors of this technology.
MEI, the leading provider of cash payment systems for the kiosk industry,
envisions a bright future for kiosks in the c-store environment.
"Kiosks are a natural revenue-generator for the c-store industry
because they enable customers to get products and services more quickly
and efficiently," said
Otto Lohse, industry market manager, retail
cash management for MEI. "They also help generate traffic and attract
new customers without the expense of additional personnel."
Virtually any online application that can be delivered to the home or
office PC can be ported to kiosk hardware with an Internet connection. Potential
offerings include e-tickets for entertainment and travel, Web shopping and
even Web surfing and e-mail access, either for a nominal fee or as a free
In a similar, but decidedly separate application, digital kiosks can
facilitate a variety of site-specific functions, such as ordering food at
a quick-serve restaurant, facilitating a car wash, taking care of utility
bill payment in areas where this is common, and purchasing lottery tickets.
With this approach, digital kiosks do not unnecessarily create new profit
centers, but rather lower the overhead associated with existing profit centers
while hopefully adding greater customer convenience.
A hybrid approach where the kiosk becomes an ATM, or the ATM becomes
a kiosk (depending on the developer's traditional business) is also being
explored. In addition to dispensing cash, the ATM could also dispense concert
tickets or discount coupons for in-store items and anything else offered
by a digital kiosk (see article on page 30 for more information). Although
they will not be covered in this article, specialty kiosks that facilitate
such activities as photo processing and change counting/cash redemption
are also being developed as drop-in profit centers. And self-checkout technologies,
which also tend to fall into the kiosk category, will be covered in next
While many of these approaches promise value to both customers and retailers,
they are all in their infancy -- particularly where the convenience channel
is concerned. Some approaches will undoubtedly work better than others,
and others may work well but not in the c-store environment.
BP Connect tests the waters
London-based British Petroleum, which is undergoing some aggressive re-imaging
at its sites throughout the world, has let it be known that BP will take
a leading position on technology.
The BP Connect site has been designed as a hub where busy motorists can
stay connected with the world though Internet access to information both
at the dispensers and in the shop.
The fuel dispensers are Internet-enabled to provide customers with traffic
reports, weather reports, news headlines, special store promotions and general
information about BP -- particularly its environmental-focus message. The
information is updated every 15 minutes so that it remains fresh and useful.
From the dispenser kiosk, customers can also order food and drink combinations
at the dispenser from BP Connect's QSR, The Wild Bean Café, while
they fill their tanks. To get around the fulfillment and time issues associated
with this concept in previous efforts, the menu is limited to selected morning
and afternoon offers. While the external design is universal, BP works with
Fort Wayne, Ind.-based Tokheim and Austin, Texas-based Wayne Division, Dresser,
Inc. to provide units featuring each company's Internet-linked internal
A Netyou Internet services and telephony kiosk, typically found in
For the customer who is seeking more information than that provided at
the pump, the BP Connect site is equipped with two Internet kiosks inside
the store. While the dispenser-based and in-store kiosks offer some of the
same information, there are differences. In order to avoid slowing traffic
through the islands, the material presented at the dispenser tends to be
more limited than that found inside the store. For example, the dispenser
may only display news headlines, while the store kiosk provides access to
the full article. Likewise, the store kiosk provides a traffic map with
high congestion routes highlighted in red. The in-store kiosks also offer
the most popular service, which is step-by-step directions to a location
that can be printed out with a map. The in-store kiosk facilitates the traditional
kiosk roles of providing information, with news about BP's environmental
initiatives and a survey for the customer to rate the experience, note any
problems or provide comments.
BP works with a variety of partners to provide these services, including
Accu-Weather (weather), Traffic Station (traffic), Vicinity (directions)
and Yellow Bricks (news).
There are currently kiosks at 20 BP Connect sites in the United States,
with sites in the Cleveland area, Indianapolis, Atlanta and one in suburban
Chicago. Of these, seven have both dispenser and in-store kiosks, while
13 have the in-store kiosks only. The plan is to have 300 BP Connects deployed
by the end of the year. All of the current stores are company-operated,
though BP is considering ways to offer this design to other members of its
"So far, the reaction has been positive," said Phil Bartholomae,
innovation manager for BP Global Retail. "There are generally two types
of customers using this technology. The first are the technically adverse
who are not interested in what the kiosks have to offer. From the beginning,
we were concerned about creating an offer that would drive these customers
away. We've avoided that, and there's no Web interaction required to do
a gas transaction. The second group, which has been about 30 percent of
our customers, is more than willing to take advantage of what the kiosks
have to offer."
BP Connect's new look, in this case a site in the United Kingdom.
BP Connect's U.S. digital offerings differ somewhat from those being
explored at the U.K. sites, which lack the dispenser kiosks but provide
added kiosk functionality inside the shop.
Two kiosk concepts, eKiosk and Giftshop, are offered in the U.K. store.
The eKiosk is used as a Web surfing and e-mail platform. The Giftshop provides
access to Internet-based retail partners that deliver a variety of gift
items to the recipient's home after the order is placed online. Each new
BP Connect store will typically have two eKiosks and one Giftshop kiosk.
By inserting 1 pound into eKiosk, customers receive 10 minutes worth
of Internet access to browse, retrieve and send electronic and video mails.
Prepaid cards can also be used at the kiosks, and BP is planning to give
away 50,000 cards that will give half an hour of Internet access time free
"A pound for 10 minutes is the right pitch for the right market,"
said Drew Davy, BP Connect's U.K. e-business manager. "Business people
are a core part of our business and our pricing is highly acceptable for
the value they receive from the service. Accessing the Web at an Internet
cafe can be quite cheap at non-peak times, but that's hardly practical for
the mobile professional. In some hotels, a pound will only get you five
minutes, which is quite expensive."
While the customer can browse with some freedom, a content filter keeps
users from accessing material that would generally be considered offensive.
This helps protect BP's image, and should not pose any significant inconvenience
for the target user taking advantage of this service.
The separate Giftshop kiosks allow customers to select from a limited
variety of on-route gift choices centered on alcohol, chocolate and flowers.
For a more adventurous gift idea, customers can find out more about a local
balloon trip. If the customer decides to buy the product or service, the
kiosk will ask for address details and the chosen date of delivery. This
information can be typed in using the onscreen keyboard. Swiping a credit
or debit card can process the payment.
"They use the touchscreen kiosk to place the order and there is
a limited but good range of gifts to choose from, so that they can get their
task accomplished and get on the road," Davy said. "I like to
say that the concept is designed for the 'forgotten or feel guilty' occasion."
Differences in the general state of Internet connectivity, and the nature
of the business professional and commuter customers, tend to make Web/e-mail
access, and perhaps general e-commerce, less desirable in the U.S. market.
"The fundamental difference is the needs of the customer in the
United States verses the customer in the United Kingdom," said Bartholomae.
"The U.S. customer is typically a busy commuter who most likely has
Internet connectivity at home or work. A high percentage of the market will
not be people who hang out in the c-store for any period of time surfing
or checking e-mail. This is not to say that sites on a turnpike motorway
will not find these services useful, but it is not an offer BP has today
in the United States. The same holds true for e-commerce applications such
as the Giftshop offer. The kiosks have card readers built-in, but we're
not doing it at this point."
BP's position on surfing access is supported by John Neumann, marketing
manager for Orlando, Fla.-based Netyou Computer Communication Corporation,
a company that provides Internet connectivity and telephony services for
travelers through the kiosk platform. Netyou offers Web phone, Internet
access and e-mail at tourist and traffic locations such as truck stops and
Radiant's Beacon kiosk offers retailers a small footprint.
"Any model based on selling Internet access to a customer in a c-store
is probably not going to do that well," said Neumann. "A person
in a c-store is not going to want to pay 25 cents a minute to access the
Internet. These tend to be local customers who stop in for something to
eat or drink, and fill up on gas. Internet access has to be pretty low on
the list of things they want to do in the store. If they want Internet access,
they likely just turn on their computer when they get home. However, if
they are traveling it's a different story. The c-store chains that have
shown interest in what we have to offer, see it as being potentially useful
in their sites located near interstates where there are a lot of traveling
customers who will pay to access the Internet when they're on the road."
Neumann noted that a successful advertising-based model, where Internet
access could be offered free to the customer, with an outside revenue source
paying the bill, could make this service more acceptable in the c-store
environment. This could be particularly useful in underdeveloped areas.
Old Greenwich, Conn.-based Tosco is currently exploring offering its
customers advanced Web access. Although the company is tight-lipped about
the current state of its activities while the merger with Phillips Petroleum
Company is being developed, it planned to offer customers high-speed Internet
access at a significant portion of the 6,000-plus Circle K store network.
C-store shoppers will be able to pay with cash (using a MEI cash acceptor)
or credit card. Access would include e-mail, online shopping, local information
and long distance telephone services. Test marketing is already underway
at several Circle K stores located in Phoenix, where the Internet service
is currently offered free to customers.
Advertising and e-commerce
An offer such as movie tickets or redeemable in-store coupons may very
well justify the floor or wall space used by a stand-alone kiosk, but it's
far more of a reach when an offer such as airline tickets is proposed. All
of these approaches still require far more research and testing before they
are individually validated as a profitable addition to the c-store/petroleum
retailing environment. In the end, the transaction volume and fee scale
have to be sufficient to replace any traditional store products pushed out
by the kiosk's store footprint.
Seemingly more on target, and with somewhat more validation to date,
are direct marketing coupon applications that let the customer decide if
they want a nickel off a can of soda in the store by simply touching the
screen and receiving a printed coupon.
San Jose, Calif.-based Ten Square launched its content network (using
both dispenser-based and in-store kiosks) with a couponing application,
where coupons are generated at the pump or in-store kiosk for store items,
cross-merchandising promotions with local partners, and promotions supported
by national advertisers. In addition, incremental revenues are generated
just by exposing the customer to the offer -- whether or not a coupon is
redeemed. While Ten Square's coupon application has been well received by
the retailers who have tested it, and the company continues to forge ahead
bringing new sites online in a variety of cities, the program has seen slower
expansion than expected. To some extent, it's cited as a "chicken and
A considerable investment is required to get Internet-ready at the pump
or in the store, which can be a tough sell in today's competitive environment.
Marketers generally want to see a concept fully proven in the marketplace
before they spend the money bringing it to their sites. Conversely, proof
of the concept becomes stronger as more retailers adopt the program. To
help overcome this bottleneck, Greensboro, N.C.-based Marconi Commerce Systems
has developed its XMS system that will allow retailers to inexpensively
add an Internet-enabled display to their existing H dispensers and G-SITE
point-of-sale. This should make the Ten Square network more accessible to
a larger number of retailers and increase the installed base.
BP Connect's Internet-enabled dispenser.
National advertisers may also be slow in realizing the opportunities
present with the content network marketing approach. As the network ramps
up in terms of number of sites it will have a more compelling case to offer
national advertisers. The .com bust has hardly encouraged risk taking in
Norfolk, Va.-based Outsite Networks, Inc. is also looking to provide
retailers with similar functionality at the dispenser (promotions and couponing),
though with more of a do-it-yourself format for marketers to create their
own promotions while adding a supporting CNN or Weather Channel feed. The
Outsite approach is centered on a loyalty program approach as well, and
now incorporates RFID for customer identification. While this strategy eliminates
the issues associated with an outside content network and national advertising
arrangements, it does require the marketer to be more involved in the content
development and delivery process. Given the nature of independent petroleum
marketers, this may not be considered a bad thing.
in the store
With all the past hype, and continuing confusion over how e-commerce
will shake out, some companies are concentrating on providing in-store kiosks
that take care of a variety of immediate needs. Radiant sees a primary role
for kiosks in supporting existing tasks that tend to be time-intensive for
employees and less convenient for customers.
In general, these digital kiosks facilitate a variety of tasks that would
otherwise require human intervention. Tasks include ordering food at a QSR
(as realized at some BP Connect sites) or paying utility bills in states
like Florida, Texas, and California where this is a common phenomenon. In
fact, the retail bill payment transaction volume in Houston alone can top
Dave Ritchie, Radiant's vice president of sales, computer products, noted
that in today's conservative industry environment, selling a concept to
retailers that does not provide a clear return on investment when compared
to other products like drinks and snacks, is a difficult proposition.
"A kiosk can offer a variety of services such as venue ticketing,
store merchandise sales, deli ordering, directions, weather and news, and
employee-related applications like multimedia training and access to personal
human resources records," said Ritchie. "Do retailers want to
provide a service like weather, where the return on investment can be hard
to gauge, or they want something that provides a more solid ROI like selling
merchandise or eliminating the line in a customer queue?"
However, as with anything else, kiosks will not be successful unless
they are placed in a good location and promoted.
"How the retailer defines success is critical," said Ritchie.
"If someone says they just want an 'e-presence' they are never going
to be happy -- that is not a goal. A merchant can get a kiosk and put it
in a corner and forget about it, and not get much in return. Or, they can
place it by the coffee center and use it to up-sell, reduce a queue and
take customer satisfaction surveys. They will get out of a kiosk what they
put into it."
Reprinted from National Petroleum News