A fork in the road for traditional kiosks
Traditional electronic kiosks have gone the way of ubiquity or obsolescence.
Some kiosks drew too much traffic, requiring busy individuals to wait in line. Financial services solved this problem by scaling up–there are now nearly 500K ATMs in the US. Airlines solved this problem by bulking up–there are now commonly dozens of ticket dispensers in airport check-in lines.
Other kiosks drew little traffic, yielding added space and maintenance costs. As a result, kiosks providing entertainment, health and beauty information have diminished in mass merchandise retailers like Walmart and Target.
These were great first generation devices that unfortunately produced problems at both extremes. Now the “information function” of kiosks is shifting to mobile. Most notably, this has occurred with building directories, wayfinding and product information.
Hello automated retail
Witness several recent announcements:
- Coinstar and Seattle’s Best roll out thousands of new Rubi Kiosks
- Best Buy uses kiosks to sell upscale devices at c-stores
- Mini-stores win in Brazil
The momentum of automated retail is being driven by new technology, marketing, and distribution trends
Current generation kiosks leverage cellular an Web access to maintain inventory, as Nikki Baird, Managing Partner, RSR Research, points out. These kiosks have the capability for 24/7 delivery and uptime, unlike traditional stores. They solve the brick-and-mortar problem by replacing high cost in-person service with automation. This includes the e-commerce practice of replacing on-site troubleshooting with more efficient centralized call centers.
Automated retail enables new marketing experiments, such as testing new products and sampling for consumer products manufacturers. They also can test demand before opening up a full store.
Automated retail fits conveniently into multi-channel strategies. These include solving out-of-stock problems by buying a sold-out item through the unit and shipping it to your home (which also solves the packing space problem for travelers). In addition, consumers can buy an item online and save money by shipping to machine
Marketers are already playing with new forms of promotion. Elevate Digital in Chicago uses a touchscreen that allows customers to get exclusive daily deals. Daily deal email lists can provide the instant gratification of immediate pickup (assuming machines are distributed–see below). Promotional tie-ins provide codes to save even more pre-transaction as well as bounceback coupons post-transaction
Automated retail enables unprecedented product availability. They embody the Coke promise of refreshment within arms’ reach. But in this case the vending machine is extending from coffee to electronics to entertainment.
These solutions go beyond pop-up stores to deliver new forms of seasonal placement. Both Best Buy Express and Coinstar Gizmo machines can generate even higher sales around holiday, back-to-school/college, Fathers’ Day, and other electronics occasions.
Solving a need
As the traditional model of kiosks as information wanes, the new model of kiosks as connected commerce rises. Think of them as smart boxes. When PDAs disappeared, smartphones took their place, creating entire new categories of products and services.
Most of all, automated retail is driven by consumer pull–the categories, choices and locations buyers want–rather than traditional retail push.