January 29, 2006Multi-Channel Shoppers Create Opportunity for Self-Service Kiosk Providers
Ask Alex: Expert Says Kiosk Execs Must Adapt and Innovate Meeting Demands of Multi-Channel Shoppers Create Opportunity for Self-Service Providers What should kiosk-related companies be focused on in 2006? There�s no better expert to answer that question than Alex Richardson, former CEO and Founder of Netkey and currently managing director of a consulting firm, Selling Machine Partners. Richardson has followed the fortunes of various self-service technologies for two decades, and is frequently sought out as an advisor by companies considering self-service initiatives. KioskCom.com picked his brain on a variety of issues facing kiosk executives in 2006. KC: What should kiosk executives do to accelerate business in 2006? AR: Turn off your computer, get out of your office and visit at least 25 different retail and public locations. Refresh your memory about what it feels like to be a customer and observe the Customer Experience at a variety of retail locations.
What I left Netkey in the fall of 2003 to start Selling Machine Partners, I made it a point to do all the grocery and holiday shopping for my family and visited about 50 retail locations (and Web sites). I observed how frustrated consumers are as they walk down the grocery store aisle, looking for a can of lime juice. Count the number of seconds it takes for the average coffee and doughnut shop to deliver a simple cup of coffee. See if the checkout clerk makes eye contact, smiles or complains about a co-worker. The Net-Net was that the consumer experience for both online and bricks & mortar merchants is dreadful and still ripe for rapid improvements through the use of the industry�s self-service solutions. After this experience, you�ll find you�ll be much better at technology innovation. Instead of creating another useless cool feature, trumpeted by your engineering staff, you�ll learn how to focus on a higher priority key customer problems. Your development costs will be lower and you�ll have a much better value proposition for your customer. Watch out for endless feature comparison charts between your offering and your competitors. Just think about how many features you really use on commercially available software products such as Microsoft PowerPoint, Word or Excel (I bet it�s less than 10 percent). Focus on low-cost high-value solutions. Know your market niche better than any other competitor in the marketplace. KC: What happened on this year�s Black Monday in retail, and what does it mean for the kiosk industry? AR: Black Monday this year showed the growth of the multi-channel shopper. People got out to stores and shopped, then went back home to buy on the Web. Customers are doing more on the Web. So the stores� advantage of simply getting customers in stores is being taken away, because they�re not always closing sales. And when a customer goes online, they might not buy from the same retailer. For stores, knowing the Web people will use a kiosk can help in closing the sale in the brick and mortar location. If they can lure the multi-channel shopper to use the kiosk, they can close the sale at the retailer. The kiosk must facilitate closing of the transaction at the store � that�s the opportunity to innovate. Some retailers are still living in the 20th century. What does the next generation shopper want? They�re a multi-tasking generation, they�ve got the Web, instant messaging, television, cell phones and homework all going at the same time. They�ve got to innovate and reach this new generation.
KC: What changes do you see in how large customers create and deploy kiosk solutions? AR: In the last few years, I�ve worked with a lot of top retailers, including Home Depot, Ticketmaster, and Ahold Giant Foods. Kiosks are becoming just another customer-facing technology, integrated with CRM. Demand is picking up because C-Level executives are seeing self-service in a variety of locations, from airports to stores, and they want self-service incorporated into their own businesses.
In 1998-2000, big companies were hiring fancy Web firms to develop Web sites. Now those companies and gone and they do it themselves. The large retailers are bringing software development in-house. That�s good for software-enabling companies. Most of the �plumbing� is managed by in-house staffs, though the creative design and advertising strategy is contracted outside the firm.
Large firms will continue to use large system integrators. I�m seeing more and more projects being developed in-house by the Web development teams.
Larger projects require more robust software, and the stakes are higher. There�s a big difference between a hundred kiosks and 10,000. Security is a big issue. It may take eight weeks to get a project through the legal department.
KC: What industry seems ripe for change in 2006?
AR: Certainly, the photo industry appears to be the largest deployer of consumer kiosks. I was at Wal-mart recently and there were 10 people in line at the Kodak machine. When is someone like Kinko�s going to wake up and put 20 photo kiosks in the store?
I�m convinced that Kodak will be sold within two years, probably to Hewlett-Packard or 3M. They�ve lost their focus. They�re a great company, but won�t survive as a stand-alone company. Their investors are impatient.
KC: What segment is ready for rapid growth? AR: I�m surprise at the pace of adoption in all levels of government. You�ve got state, local and federal governments, departments like Social Security, Passports, and Motor Vehicles, which are still very much available for self-service. They will accelerate and have capital budgets. The problem is the government agencies are so fragmented. Take voting. The obvious problem is finding the solution that works best, but every town has a different method, so it�s hard for everyone to agree on a technology solution. KC: You say digital downloads of media content will grow in retail settings. Why do you think so? AR: Shopping is a social experience, and it is part of the reason for getting out of the house. People will want to download media in a store, with their friends, not in front of their home computer. That�s why you�re seeing companies having success with it. Retailers will use it to drive traffic. For Starbucks, it�s a way to get you in the store.
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Interview with Alex Richardson on the next wave of opportunities for kiosk deployers. Government, Voting and yes, Multi-channel retail returns...