December 29, 2008
Walmart iPhone Kiosk Look
 Digital City correspondent takes some shots of the new iPhone kiosk in Walmart (which is more specifically a POP fixture). The brand of Apple and the iPhone is in the class of Disney and it's a little odd to see their units in what can only be termed a bland design at best. Dan Ackerman of Digital City. Also related story "Consumers now can avoid 'snooty Apple stores' and get iPhones at Walmart". |
Brief encounter with the Wal-Mart iPhone display
Posted by Dan Ackerman
Owing to, as Tom Lehrer would say, nepotism and intrigue, I found myself in the small town of Brenham, Texas, this Sunday on the very day that Apple's iPhone was to go on sale at the Wal-Mart mega-chain (an outfit that I, as a native New Yorker, have had very little experience with).
Popping in to check out the action and snag some photos, I found a single iPhone display -- it would be generous to call it a kiosk -- with an activated iPhone and a handful of brochures. The price tags on display gave both the new customer/upgrade price, as well as the full retail price. A small paper sign taped to the wall announced that iPhone sales would commence at 9:00 am, and that customers should line up for access to limited stock.
I asked a sales clerk about first-day sales, and she said as far as she knew they hadn't sold a single unit so far, "but maybe if they had started selling it before Christmas..." There was, however, a steady stream of gawkers checking out the display unit in the 10 or so minutes I spent in the electronics department.
Herewith some photos of the in-store Wal-Mart display:
RELATED STORY
Consumers now can avoid 'snooty Apple stores' and get iPhones at Walmart
So much for $99 iPhones. And do you think we will see any Sprint Instinct kiosks sprouting inside the stores of the nation’s, er world’s, er universe’s largest retailer anytime soon?
Starting Sunday, Walmart indeed will begin selling the Apple iPhone.
“Walmart is excited to announce the availability of the iPhone 3G at nearly 2,500 Walmart stores beginning Sunday, December 28, 2008,” the world’s largest retailer announced today.
As speculation of this development emerged in recent weeks, some suggested massive price breaks – even a sub-$100 iPhone. Consumers patronizing the home of everyday low prices will get a break, but not one that goes below $100.
“The retailer will offer the black 8 GB iPhone 3G model with the every day price of $197 and the 16 GB black or white model for $297, with a new two-year service agreement from AT&T or qualified upgrade. As America's price leader, Walmart's price match policy also allows stores to match the price of any local competitor's advertised store price on the same item within the same promotional period,” Walmart stated.
Gary Severson, a senior vice president at Walmart, said his company was excited about the development. Walmart clerks have been working for many weeks preparing to help new customers learn more about the “features and services that make the iPhone unique.” Consumers can visit “Apple iPhone 3G kiosks located at the Walmart Connection Center.”
The company called the devices revolutionary and able to tap third-generation networks twice as fast as the original iPhone, but the twice as fast claim was accompanied by an asterisk stating that “Actual speeds vary by site conditions.”
Wow. So much for the Christmas spirit. Sure seems like a slam at AT&T, the exclusive U.S. carrier for the iPhone.
Fortune’s Apple 2.0 bloggers said this development is a coup, for Apple and AT&T.
“The move represents the fourth major expansion of the iPhone’s retail presence outside Apple’s own 200-plus stores,” they stated. “The phone was sold first at AT&T’s 2,000 retail outlets, then at nearly 1,000 Best Buy outlets, and then at the tens of thousands of points of sale (many of them no more than mom-and-pop kiosks) that carry iPhones for Apple’s overseas partners. Piper Jaffray’s Gene Munster has estimated that Apple could easily sell as many iPhones through Wal-Mart stores in 2009 as it sells through its own Apple Stores — about 4.5 million units, by his calculation, or more than 1,200 iPhones per store.”
Pricing trends will be worth watching.
Walmart prices will start out at $197 and $297, a whopping $2 off current prices. Buzz, buzz, buzzing lately had speculated about a possible $99 iPhone.
As Appleinsider suggested, maybe an iPhone price fight could break out.
“Wal-mart also announced that its price match policy allows stores to match the price of any local competitor's advertised store price on the iPhone should one of its rivals announce lower pricing,” Appleinsider stated.
We were kind of wondering whether the typical iPhone consumer would be interested in leaving the mystical environs of Steve Jobs’ aesthetically pleasing Apple stores, or even an AT&T outlet, to pick up one of the mobile phones sure to fill one with a sense of childlike wonder.
Apparently, however, this new move could add another demographic of customers carrying the iPhone.
“guess i’ll be cruising by Wallyworld this weekend to check out the action,” stated a commenter on the Barrons’ Tech Trader Daily blog. “i’m telling you, there are lots of people who will want the iPhone but don’t want to go to some snooty Apple store because they don’t think they are cool enough….like the millions of people who have bought a Wii.”
June 26, 2006
Electronic Gadget Vending Kiosk
Zoom Systems has three kiosk vending systems in trial across the US. One of them is at the Flatirons Mall in Broomfield, CO (outside Boulder). I went over and took a look at the kiosk.
Here is picture of main self-service vending kiosk unit outside Nordstroms. The Sony Access sells all types (and form factor) of products. Rather than the oldstyle whirly hoop dispenser, these kiosk units employ robotics that move over and "take" the merchandise so to speak from the kiosk.
Zoom kiosks generate about $1,000 to $15,000 in revenue per square foot a year, compared with about $300 to $500 per square foot for most traditional retail stores, said Zoom chief executive Gower Smith.
He said the kiosks selling consumer electronic products tend to generate the most sales, from $6,000 to $15,000 per square foot annually.
May 16, 2005
Customer Survey Kiosk Start-Up
THE CHALLENGE: Building a successful business by connecting retailers with their customers.
THE STRATEGY: Place touchscreen terminals and kiosks in public spaces to gather feedback and e-mail addresses from consumers.
Small Business: The other side of the dialogue
Larry Werner
May 16, 2005 SMALLBIZ0516
THE CHALLENGE: Building a successful business by connecting retailers with their customers.
THE STRATEGY: Place touchscreens in public spaces to gather feedback and e-mail addresses from consumers.
Phil Hotchkiss said his latest start-up, a consumer-feedback firm called Talkingpoint, isn't that different from the company he sold in 1999 for $6 million in cash and $160 million in stock. He said his new company is a mirror image of his first big idea, which was called BigCharts.
That company, which provided online company information to individuals for their investment decisions, was sold to CBS MarketWatch and turned the young Bloomington native into a wealthy young Bloomington native with a reputation for a golden entrepreneurial touch. His new company uses technology to provide companies with information about their consumers.
Given his success with BigCharts, it wasn't surprising that the founders of his current company asked Hotchkiss to take their concept from the idea stage to the venture-capital stage.
Two years ago, Hotchkiss became the CEO and largest shareholder of a start-up company called iCount, which he renamed Talkingpoint. The company places touchscreens in retail spaces to gather feedback from customers. This year, Hotchkiss persuaded some venture capitalists in Seattle to invest $1 million in the idea.
As Hotchkiss sees it, he's turning his first business plan upside-down.
"With BigCharts, it was delivering [business] content to individual investors," Hotchkiss said over coffee near a Talkingpoint kiosk in Maplewood Mall. "Here, the consumer is providing the data that we deliver to the business user. It's kind of inverted."
The pitch apparently made sense to Maveron, a venture fund that includes Howard Schultz, CEO of the Starbucks coffee chain. Although Talkingpoint has no revenue to speak of and is in the pilot stage with a handful of Minnesota-based clients, the company appeared on the list of Minnesota companies that got venture investments last quarter. That list is dominated by companies from the medical device industry, which got 44.7 percent of the $56 million in venture funds invested in Minnesota companies, according to the MoneyTree report released quarterly by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.
One of the smaller investments of the quarter went to Talkingpoint. Ben Black, a Maveron partner, declined to reveal how much of Talkingpoint his firm got for its $1 million.
"We don't comment on ownership and valuation in our investments," Black said in a telephone interview. "We're the largest institutional investor. We believe in Phil. There will likely be additional investment behind him. He came highly recommended."
That's quite a compliment from a national venture-capital firm for a 36-year-old English graduate of Gustavus Adolphus College.
"My core competency is to help lead product-design strategy and bring all that together and bring it to market," Hotchkiss said. "I began as an entrepreneur at 25."
He was convinced that providing company information to individuals at their personal computers was a good idea. And he said he is just as convinced that it makes sense to provide feedback from individuals to businesses. But he thinks the process should be easier than logging onto a retailer's website from a personal computer. So his company has worked with 3G Cellular to create touchscreens that are placed in stores or malls to ask customers what they think about different products and services.
The devices use wireless technology to deliver the feedback to Talkingpoint's computers. From there the information is made available to clients through the Internet. In return for participating, consumers get a reward, such as a coupon for a Blizzard at Dairy Queen or a 15 percent discount on Sun Country Airlines. The company gets the feedback and the consumer's e-mail address, which can be used for follow-up marketing.
"Multi-channel selling is important -- the customer who interacts with your website and your store is a better customer oftentimes than one that only interacts with your store or your website," Hotchkiss said. "If you interact here and register and then you go to a computer and you engage again and it takes you right to the website, we've just created a cross-channel connection. That's a really core premise of Talkingpoint."
He said the process of getting information through the Talkingpoint kiosks might resemble market research that could be criticized as anecdotal information that cannot be projected to a larger population, as is done with random-sample polling. However, he said, there is value in knowing how a customer feels about a store when he or she is shopping in it. But the real value of Talkingpoint, Hotchkiss said, is its ability to connect retailers with shoppers electronically.
"It really is an interactive marketing application, not a market research application," Hotchkiss said.
The expert's opinion: Kevin Upton, a senior lecturer of marketing at the University of Minnesota's Carlson School of Management, said the Talkingpoint service is interesting "but presents any number of problems."
One problem with immediate-feedback mechanisms, he said, is they attract extreme views from customers.
"You get the lovers and the haters," Upton said. "The takeaways are limited from the perspective of the merchant."
Also, he said, the customer information is going to Talkingpoint before it's shared with the client. Even if the data are simply being transmitted by Talkingpoint, he said, retailers should be very protective of customer information.
"If I was a merchant, I wouldn't be sharing my database with anybody," Upton said. "If there is valuable information to be gained, why would I let a third party do this? Ask your customer questions."
December 31, 2003
Simon Malls To Italy
Simon closes on $227.3 million Italian mall partnership
Simon Property Group closed on a $227.3 million (182 million euro) deal today through which it will own and develop malls in Italy.
The payment gives Simon a 49 percent interest in the 38-mall portfolio of Italian developer Rinascente Group. Simon has also acquired a similar-size stake in Rinascente�s future development opportunities under the joint venture, which is called Gallerie Commerciali Italia. Those new developments could total up to 6 million square feet over the next five years.
The centers, which range in size from 35,564 square feet to 547,840 square feet, are in various Italian cities and mostly anchored by Auchan hypermarkets. A joint venture of Auchan, a French company, and The Agnelli Group, an Italian investment firm, controls Rinascente.
Simon's equity investment was funded by a three-year, unsecured term loan at LIBOR plus 60 basis points, provided by Bank of America, Citicorp, J.P. Morgan and UBS. Simon is the largest U.S. mall owner, with 245 retail properties in the United States. It also has holdings in nine Canadian, French and Polish centers.
Simon is not the only U.S. developer to recently make a foray into Europe. The Mills Corp. opened the 1.4 million-square-foot Madrid (Spain) Xanad� in May. Mills is also looking for development opportunities in Italy.
November 25, 2003
Hobbyists Get Kiosks
Woodcraft offers digital 'Toolbox' -- Crafty types can find over 14,000 products
PEORIA - The Peoria Woodcraft store has been chosen as one of just six Woodcraft stores nationwide to pilot a new kiosk program.
Company executives chose Peoria to debut the program mainly because of an intense interest in woodworking displayed by Peoria area residents, company officials said.
The new fast-service kiosk, offering more than 14,000 products, has been installed in the Peoria Woodcraft store, located at 4530 N. Brandywine Drive.
Woodworkers, craftspeople and hobbyists in the area now will have more tools and supplies available than ever before, said Phil Fifield, store owner.
"The new touch-screen kiosk triples the amount of woodworking products available to our customers and makes it easy to special order custom items," Fifield said.
Named "The Woodcraft Endless Toolbox," the new touch-screen kiosk allows the option of having selected products delivered to a home or to the Woodcraft store for pickup.
"Interest levels of people in the Peoria area are extremely diverse when it comes to woodworking," Fifield said.
To operate the kiosk, a customer selects the products desired on the touch screen electronic catalog located within the kiosk. A printout then is provided to the customer that he or she takes to the sales register to pay for the product.
"The real beauty of the program is that now we've put more than 14,000 unique products at the fingertips of Peoria-area woodworkers that they couldn't previously get when visiting our store," Fifield said.
In its 75th year, Woodcraft Supply Corp. offers top quality woodworking supplies, materials and tools. The company sells through direct mail catalogs, a Web site store and at more than 60 retail stores nationwide.
November 24, 2003
Verizon sales pitch goes interactive
Verizon Wireless is using the Twin Cities to experiment with a new kiosk display in four area malls that it hopes will put some hip-hop style f'shizzle into the company's sales pitch.
Verizon Wireless' kiosks at Rosedale, Southdale, Maplewood Mall and Eden Prairie Center recently installed several large touch-screen monitors that let passers-by play with the games, ring tones, text messaging and other features Verizon sells through its "Get It Now" brand of data services.
"We were looking at new ways to reach the youth market," said Alex Ross, director of stores for the company's Great Plains region, which includes Minnesota. "Youth are very Internet savvy � they like to try things out for themselves."
The company chose the Twin Cities for its test, Ross said, because it had the best kiosk locations in its malls.
In addition to the touch-screens, the kiosks at Rosedale and Southdale feature 44-inch screen plasma TVs that are designed to attract the MTV generation. Kiosk employees also were freed from Verizon's white-shirt and tie dress code. "Trendy" is how Ross described the way employees are instructed to dress.
If the displays are judged a success at the end of their three-month trial, copies could pop up at some of Verizon's several hundred other kiosks and its 1,200 stores across the country next year.
November 19, 2003
Dollar General to open 675 units next year
Amid rapid growth among dollar stores, Dollar General, the sector�s biggest chain, says it will open 675 stores over its next fiscal year.
Dollar General has maintained a similar pace of expansion this year. The Goodlettsville, Tenn.�based chain is on track to open 660 stores this fiscal year and now has 6,653 units in 27 states. Next year it will enter three states for the first time: Arizona, New Mexico and Wisconsin. The company also says it expects to pursue similar growth in 2005 and 2006.
Deep-discount stores, which sell items generally priced at no more than $10, are among the retail industry�s fastest-growing and best-performing. The sector�s top 10 chains opened nearly 1,800 units last year, bringing their combined units to at least 16,000, according to a report by consulting firm Retail Forward. The two largest chains after Dollar General are Family Dollar (with 5,066 stores) and Dollar Tree (2,511 stores).
Last year the leading names, not including one-price chains, posted same-store sales increases of 6.3 percent on average, to outperform conventional discount stores and supercenters, which saw only a 2.8 percent average same-store sales increase, Retail Forward reports.
Dollar-store chains, which originated in southern states and have targeted shoppers with average yearly household income of $30,000, have begun to expand West and North as they attract a wealthier consumer demographic.
In recent years Dollar General has included more food items in some of its stores. Those stores generate an average ticket of $13.41, compared with $8.42 in its others. Dollar General says it plans to open more such units, but did not specify how many.
UNIQUE TACK PROPELS WALGREEN
A close look at Walgreens and how it grows in world of Shopping Centers.
UNIQUE TACK PROPELS WALGREEN
BY NANCY COHEN
The strategy is exceptionally simple, but the execution simply exceptional.
Taking unwavering aim at being the most convenient drugstore, Walgreen has blanketed the country with branches, selected only the best, most accessible locations and invested heavily in technology that speeds transactions and enables customers to treat every store in the chain as their local pharmacy.
A major component of the company�s convenience positioning has been its systematic shift since 1994 from the in-line spaces (usually in grocery-anchored strip centers) that were once the bedrock of its real estate plan. The move to a street-side location � even at the same shopping center � �gave a great kick,� said William A. Shiel, CLS, the company�s senior vice president of facilities development. The freestanding format contributed to increases of 30 percent �right out of the box,� he said.
And collectively, the company�s efforts have garnered it undisputed market leadership. Walgreen Co., based in Deerfield, Ill., just concluded its 29th consecutive year of record sales and earnings. In the fiscal year ended Aug. 31, 2003, comparable-store sales were up 8.6 percent and total sales rose 13.3 percent, to $32.5 billion. (Second-ranked CVS has roughly the same number of stores, but about three-quarters of the sales.) Its assets include some $3 billion in owned real estate and more than $1 billion in the bank.
With 4,227 stores now in operation in 44 states and Puerto Rico, the company plans to expand beyond 7,000 stores by 2010, a net increase of nearly 500 units a year. For fiscal 2004, Walgreen, which funds its growth through revenues, not debt, has budgeted $1 billion for developing stores, distribution centers and systems.
Walgreen has come by its achievements by literally minding its own business, observers say. In sharp contrast to other drug retailers, it eschews acquisition, and it recruits and develops its management from the ground up. Employees stay with the company for decades. Its 16 top executives have collectively logged 476 years with Walgreen, averaging 30 years apiece.
�They�ve always been seen as the innovator in the industry, and one of the key strengths is the company over the years has developed its strategy internally, without outside influence,� said Derek Leckow, an investment analyst at Barrington Research Associates, Chicago. That insularity has lent a clarity and discipline to its planning, a consistency to its culture, operations and approach to the marketplace, and a quality to its real estate that have set Walgreen at the forefront of its industry for decades.
Since its founding in 1901, the company has pioneered innovations � from computerized systems for filling prescriptions and point-of-sale scanning to the freestanding store format � that have redefined drug retailing.
�Walgreens figured out earlier than anyone else that convenience would drive the industry,� said Andrew P. Wolf, a retail analyst at BB&T Capital Markets, Richmond, Va. �Now they�re the most convenient purveyor of health and beauty mass merchandise, and that is a major currency.�
A number of trends undergird the company�s strategy:
� The proliferation of prescription drug plans with set co-payments, making proximity more important than pricing;
� The boom in consumption of prescription drugs, whose U.S. sales increased 11.3 percent to $183 billion in 2002 and are expected to reach $446 billion by 2012;
� The need to avoid direct competition within shopping centers, as discounters and supermarkets add pharmacies, and drugstores expand their selections of food and mass merchandise;
� An increased demand for quick, one-stop shopping, given the metamorphosis of supermarkets and discounters into mammoth supercenters and the demise of the five-and-ten.
At 14,500 square feet (11,000 of that is selling space), a Walgreens is a fraction of the size of a supercenter and easier to navigate. The typical Walgreens stocks some 20,000 items � not just the prescription drugs that account for more than 60 percent of sales, but everyday necessities, from lipsticks to tortilla chips, carpet cleaners to crayons, computer mice to mousetraps.
�You can get in and out of Walgreens in seven minutes,� said Wolf. �It�s an antidote to the very large box stores.�
With a trade area of just 20,000 people (a fifth of the population that supercenters require) Walgreens stores are closer to more homes, too, Shiel points out. The stand-alone stores occupy either a pad at a shopping center or a site across the street from one, at high-traffic, signaled intersections. Today 80 percent of the chain�s stores fit this model. The freestanding sites enable the chain to offer easy access, dedicated parking, 24-hour service (offered in about 900 stores) and, perhaps most important, drive-through pharmacy windows, a service the company considers integral to its positioning.
�Patients really appreciate the convenience of picking up a prescription without getting out of the car,� Shiel said. While a drive-through transaction precludes add-on purchases, it ultimately builds loyalty. �A busy mom with a sick child may not be in the mood to buy a greeting card or a six-pack of Coke anyway.�
Benefits accrue to the rest of the shopping center too, even if, on a given visit, a Walgreens shopper never leaves the car, much less cross-shops, said Johnny Hendrix, senior vice president and director of leasing at Houston-based Weingarten Realty.
�People with prescriptions tend to be very loyal, so they bring a lot of customers into the shopping center over and over and over again,� Hendrix said. �A customer will go to Walgreens 10 times and every time will see where Hallmark Cards is, will know how to get in and out of the center, where the traffic lights are, that it�s an easy trip. That�s how the synergy works. It�s a long-term benefit.�
Nevertheless, the Walgreens-led exodus to freestanding stores has been a mixed blessing for strip center landlords.
�The community grocery- and drugstore-anchored shopping center doesn�t exist anymore,� said Glenn J. Rufrano, CEO of New Plan Excel Realty Trust, New York City, which includes 21 Walgreens in its portfolio.
Not every strip center property is able to accommodate a 14,500-square-foot pad for a drugstore with a broad merchandise mix, whether on account of limited acreage, restricted uses or cost. �The owner has to decide whether to go with them and build outparcels or let them go,� Rufrano said. �Where we could move them, we did.�
Although Weingarten has a few Walgreens on pads, most of the Walgreens in its portfolio are the older, in-line units. Altogether, it has 14 of the stores � �fewer than we once did,� Hendrix said. �They�re such great operators, and it�s great to have another pad user interested in good sites, but I wish we had more great people with 15,000 square feet for the in-line stores.�
Since 1994, Walgreens has more than doubled its store count. The company began ramping up its expansion in 1984, when it opened its 1,000th store, and it has grown exponentially ever since.
�They aggressively built stores through a variety of supply-and-demand cycles, and the reward has been a major position in major markets, as well as increases in comp stores and total sales,� said Rufrano. �Once again they�ve taken the heretics who say, �You�re building too much,� and proved them wrong.�
Few see any risk of overbuilding now, though, considering American demographics, the pipeline of new drugs in the works and the influx of more profitable generics as a host of drugs comes off patent.
�I don�t see a saturation point in the near future,� said Leckow. �In the U.S. there�s lots of opportunity in markets that aren�t fully served because of the explosion in consumption of pharmaceutical drugs, which will continue, especially as the population ages.�
Despite the seemingly endless opportunity in a segment where sales are outpacing store growth, the other leading drug chains � CVS, Rite Aid and Eckerd � have contracted their store counts by the hundreds in recent years, scuttling unproductive or mismatched real estate they had acquired and catching up with Walgreens by relocating to freestanding sites.
�Walgreens took the more financially challenging path by building organically, but made a great investment, ending up with the best real estate in the best markets and on the best corners,� said a New York City-based analyst who follows drugstores but declined to be identified.
Indeed, observers repeatedly cite the quality of the chain�s real estate as a competitive distinction. The fact that it closed only two of the more than 3,000 stores it opened over the past decade attests to its talent for site selection.
�They take only the best corner,� said Dennis Tracy, a regional vice president at Commercial Net Lease Realty, Orlando, Fla., whose transactions with Walgreen have largely been land sales. �They want to know that no drugstore will come into the market and outposition them in the future.�
The vast majority of Walgreens are leased, most of them turn-key, build-to-suit arrangements, Shiel says. (The company�s $3 billion in real estate holdings include its warehouses, distribution centers and corporate offices.)
The average store racks up annual sales of $7.1 million, or $654 per square foot. Sites that can reap those kind of results demand not only premium prices, but patience and effort, says Alan Kahn, president of Kahn Development Co., Columbia, S.C. His company, one of many that develop stores for Walgreen, opened four of the stores in the Carolinas in August.
�It�s harder and slower to do these deals today, because there�s frequently something else on the site, a service station or other buildings with tenants,� he said. �But they�re willing to wait and take the trouble to get the very best.�
One payoff has been a healthy market for Walgreens leases. Thanks to the prime real estate and the company�s high credit rating � AAA from Moody�s Investors Service and A+ from Standard & Poor�s � its net leases are viewed as sound investments.
�There aren�t many retailers with a better rating,� said Bob Blanz, a senior vice president at Capital Lease Funding, New York City, which has financed Walgreens developers since the mid-1990s. �And they�re opening stores at a prolific rate. Strong credit, strong market position and lots of product � that�s what�s most attractive from our vantage point.�
The challenge of being the market leader, however, is that ultimately everyone else tries to follow. �We have to keep executing better and innovating more,� Shiel said. �Anybody can copy what you�ve already done.�