KIOSKS

Web-enabled kiosks made their debut in 1996. One of the first retailers to make extensive use of instore kiosks was outdoor sports retailer REI (Recreation Equipment Inc.), which had kiosks in 58 stores by fall 2000. Its in-store kiosks provided customers with access to 78,000 products available on its Web site.

At the end of 2000 kiosks were not widely deployed. Those that were installed seemed to attract little consumer interest. Forrester Research estimated that there were as many as 15,000 Internet kiosks internationally at the beginning of 2001, with some 100 companies planning to use them in retail settings. Forrester found that 80 percent of all major retailers planned to install kiosks by 2002.

It was reported that kiosks were beginning to make an impact in the retail sector at the beginning of 2001, albeit slowly. Among the issues retail stores needed to consider were whether the kiosks would be self-service or assisted, where they should be located, and what products and services would be listed on the kiosks.

Kiosk basics include a personal computer, a telephone connection, speakers, and a printer. By adding a credit-card reader and a touch screen, the kiosk becomes a sales channel. Additional features include scanners, which can be programmed to read a product's bar code and to provide additional information about the product.

Typically, kiosks link to the company's Web site but not to the wider Internet. They often have customized features. Retail applications and benefits include being able to list a wider range of products without having to add shelf space. Kiosks let customers find information on products and make comparisons. They can provide gift registries and credit applications as well as speed up customer service and help sales associates close a sale.

The content that a retailer puts on a kiosk can include more than a Web connection to the company's Web site. Kiosks are capable of carrying sound and video in addition to an Internet connection, thus making them potential multimedia displays. They have the capability of carrying multimedia presentations about the company, its stores, and special promotions and events.

KIOSKS OFFER BENEFITS TO CONSUMERS AND RETAILERS

Kiosks are used to offer information, provide Internet access, and allow customers to shop online. Web kiosks enable retailers to bring the Internet into their stores. While in the store, customers can shop online at the kiosk at the store's Web site. In-store kiosks can help sell a retailer's Web site and direct traffic there. Kiosks can also be a way to introduce non-Internet users to the Internet and encourage them to do more online shopping.

Kiosks are also a cost-effective way to increase the number of products available. They help retailers capture sales that might have been lost due to out-of-stock merchandise. If kiosks became widely accepted by consumers, retailers would be free to build smaller stores and let the kiosks provide access to a wider range of products.

Within the store, kiosks must be strategically placed and user-friendly. It is also helpful if they provide more information than is available at the retailer's Web site. They can be used as a source of additional product information, both by sales staff and by shoppers.

Compared to online shopping from home, kiosks offer several unique benefits to both consumers and retailers. Using an in-store kiosk allows customers to still touch and feel merchandise. At the same time, retailers can keep smaller quantities of merchandise in stock and let the kiosk offer customers access to products in a range of sizes and colors. For large items that are difficult to ship, such as furniture, customers can see floor samples in the store and order the merchandise online through the kiosk. Kiosks also offer more payment options than shopping online from home. Customers using an in-store kiosk are often given the option of paying for their order with cash or a check at the register.

RETAIL AND OTHER APPLICATIONS

Retailers with in-store kiosks included Bloomingdale's, where kiosks gave shoppers information on hot-selling items and prompted them to buy. The kiosks also displayed and sold catalog items. For the 2000 holiday shopping season, Bloomingdale's added second-generation software that enabled the company to produce its own editorial content and promote special events through live chats and other multimedia presentations. Bloomingdale's kiosks also had an e-mail feature that allowed customers to send e-mail postcards to their friends and attach digital photos of children with Santa Claus taken at the store. The kiosks also included store maps and could be customized for a particular location. Bloomingdale's considered its "eOsks" as empowering the consumer by providing them with convenience and expediency.

At the end of 2000 BlueLight.com, Kmart's e-commerce subsidiary, planned to roll out 3,500 Internet-enabled kiosks at about half of the 2,100 Kmart and Super K stores nationally. Customers in Kmart stores would be able to shop online at BlueLight.com and make payments either through a credit card, an alternative payment solution tied to their checking account, or by using a Kmart cash card. The in-store kiosks were located at customer service desks. They were intended to initiate consumers to the Internet. In addition, BlueLight.com passed out CDs that would provide customers with free Internet access. The kiosks represented a way for BlueLight.com to attract new customers as well as a new channel for Kmart to boost revenue. Orders received online and via kiosks were outsourced to SubmitOrder.com for fulfillment. Five months after the 3,500 BlueLight.com kiosks were installed in Kmart stores, the company reported that 20 percent of all BlueLight.com shoppers came from inside Kmart stores.

Kiosks were installed in 91 Store of Knowledge stores by publisher Dorling Kindersley in 2000. The Store of Knowledge retail chain sells educational toys, games, and books. Its kiosks enabled users to search for gifts according to the recipient's age and by type of merchandise. Users could also order gifts online, specify gift wrapping, and then pick up the gifts at a nearby store.

At the end of 2000, Service Merchandise, a discount jewelry and houseware retailer, was installing kiosks in its 220 stores as part of the firm's makeover following its reorganization. The kiosks were designed with the capability of printing coupons for consumers.

At Borders Books & Music, kiosks provide access to some 3 million items, while an individual Borders store could only carry some 200,000 items at a time. The kiosks featured a "Title Sleuth" that found books by title as well as store maps showing where a particular book was shelved. Similar kiosks at rival Barnes & Noble succeeded in driving traffic to Barnesandnoble.com, helping to push the Web site's book sales past those of Amazon.com in the first quarter of 2001.

By February 2001 office products retailer Staples had installed Web kiosks in all of its 954 stores. Staples' in-store kiosks provided customers with access to some 45,000 products listed at Staples.com, compared to 7,500 items carried in a typical store. The kiosks also provided customers with access to 10,000 downloadable software titles and a range of business services. Online purchases made through the kiosks could be paid for by cash, check, or credit card at the stores' registers.

Other retail chains with in-store kiosks included RadioShack, where Web-enabled kiosks provided sales staff and customers with a way to look up products, including many that were not in stock at the store. General Nutrition Center stores had small kiosks that provided information on food supplements.

Kiosks were also being deployed in banks and other financial institutions in 2001. Bank One Corp. installed two types of kiosks at different branches throughout the country. One type of kiosk, made by WingspanBank.com, was intended to attract new customers to Bank One's new Internet-only bank. The other bankone.com kiosks offered customers access to bankone.com 's financial services, including online banking, bill payment, investing, and small business and commercial services.

Gas stations and convenience stores were emerging avenues for kiosks as well. The December 2000 NACS (National Association of Convenience Stores) convention featured a wide range of Internet kiosks. NCR displayed several Internet kiosk systems with different application development partners.

CONSUMER ACCEPTANCE KEY TO WIDER DEPLOYMENT

Experts admit that kiosks often fail for a variety of reasons, ranging from poor in-store location to technical problems with blank screens and printers that don't work. Retailers must be able to articulate why they want kiosks in their stores and integrate them into their retail strategy. After Hallmark installed kiosks that allowed customers to create their own greeting cards, the company found that consumers preferred to purchase stock greeting cards rather than create their own. Other problems included poor management, apathetic staff, and technological snafus.

While there are kiosk solution providers, the kiosk industry was fragmented in the early 2000s. Retailers typically purchased kiosk enclosures from one source, software from another, and possibly required a third vendor to maintain the kiosks. While some retailers successfully installed kiosks and found a profitable use for them, many others needed to develop a marketing plan to take full advantage of the possible benefits of maintaining in-store kiosks, including improved customer service, marketing and promotion, branding, and sales. Retailers needed to carefully plan to maximize the benefits of in-store kiosks. However, the driving force for wider deployment of kiosks remained consumer acceptance, and consumers will be more likely to accept and use kiosks if they are an integral part of a customer-focused retail strategy.