Kiosks Can Add Flash And Dazzle
by Gail Walker
Point Of Purchase Magazine, 6255 Barfield Road Suite 200 Atlanta, GA 30328
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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 lions
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." (Editors
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 kiosks 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. Thats 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 theres 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 dont 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. "Its 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.
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 dont even want to have to
load paper. And in retail stores, with the level of help were dealing
with today, would you want to trust your [kiosk] investment to a high school
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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