March 22, 1999
Quickgifts without hassle
Austin business to put kiosks offering gift certificates to local retailers in HEB stores
Marla Dial Austin Business Journal Staff
Automatic teller machines have become familiar sites in grocery stores, but an Austin startup company is tweaking that concept -- just a little -- and bringing gift certificates to an HEB Grocery near you.
Quickgifts Inc. has signed a deal with the grocery chain to place a dozen gift certificate-generating kiosks in HEB stores -- eight in Austin, including Central Market, and four in San Antonio. The deal has no financial pinnings as yet, but will be rolled out for a 120-day test period beginning May 1, says Quickgifts President Eric Hansen.
"If we can hit the goals we and HEB are looking for, the discussion with HEB is that we can expand to other cities and more locations," Hansen says.
The deal is the biggest for Quickgifts so far, but not its first. The kiosks were beta tested at Robert Mueller Municipal Airport and high-traffic office building One American Center, beginning Dec. 1.
The touch-screen kiosks operate on a simple concept: making it easy to buy gift certificates from a number of local and regional retailers. More than 30 vendors provide certificates, including Shoreline Grill, Jean Luc's French Bistro and several other restaurants, Clarksville Pottery, Alamo Drafthouse, Kruger's Jewelers, Book People, Terra Toys and Tower Records.
The process of getting a certificate is similar to working an ATM: a user touches the screen and sees the logos of participating vendors. Choosing one, he or she types in how much the certificate should be for, who it's to and from, and then swipes a credit card. The credit card company then automatically dials up the participating retailer and pays the retailer's cut, and the kiosk spits out a personalized gift certificate.
The technology is a marriage of off-the shelf software and proprietary connectivity code, Hansen says.
Kiosk technology belongs to a growing market. According to the National Retail Federation, the highly fragmented gift certificate market was worth an estimated $10 billion in 1997, and it's growing by about 10 percent a year.
Research firm Frost & Sullivan estimates the interactive kiosk market, valued at $369.7 million in 1996, will increase to $2.94 billion by 2003. The growth is being fueled in part by companies like Quickgifts and another local startup, AIM Technologies, which operates a kind of "frequent flyer program" for sports fans through kiosks at sporting venues.
"Kiosk technology is very commonplace in Europe," Hansen says. "You can walk into a bank, and there will be one teller and 10 banks of kiosks to handle all banking functions, and the teller is just there to answer questions.
"We in the industry believe kiosks are going to be prevalent in handling functions that are being done right now," he says.
Quickgifts' optimism is based in part on its beta test results. During the Christmas season, the two beta kiosks averaged more than 10 hits per day and about $48 per gift certificate.
Hansen says the company has identified more than 20 holidays throughout the year -- in addition to birthdays and anniversaries -- that are good times to buy gift certificates.
Robert Gaston, senior property manager for Equity Office, says tenants in One American Center have taken a shine to the Quickgifts kiosk there.
"They're so enthusiastic about it, they want [Quickgifts] to expand nationally," Gaston says.
Quickgifts is negotiating to place kiosks in more high-traffic office buildings downtown.
The company, which employs seven people, was founded by Ben Marz of SVP Prime One and attorney Edward Berliner. Hansen recently took over as president from August Petersen, an accountant, real estate broker and former Highpoint Technologies executive.
Quickgifts received an undisclosed amount of seed funding from angel investors to get it running.
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