THE CASE FOR KIOSKS

Are kiosks right for retailers? The answer is a resounding “yes.” Data tells us that a new kiosk comes online every 11 minutes. This growth is no surprise since kiosks have proven to increase customer satisfaction and improve sales.
The popularity of kiosks is helped by the greater confidence people have today in using smart-phones and tablets. With kiosks in place, shoppers now have self-service options at checkout and throughout the store as they shop. This lets them quickly and easily check prices on their own. In addition, customers who are part of a loyalty program can scan their rewards card to get coupons based on past purchases.

If you are considering a kiosk system in your store, OPI’s experience in implementing hundreds of systems can help you with planning and decision-making. In this document, we will examine some of the key issues in kiosk implementation.

DO KIOSKS BENEFIT RETAILERS?

Developing a kiosk system takes time, effort and money. A retailer will naturally want their investment to pay off. As these statistics indicate, the value of kiosks is undeniable:

• 88 percent of best-in-class operators improved customer satisfaction with kiosk systems.
• Customer conversion rates increased by 63 percent with kiosks.
• 100 percent of retailers who used kiosks reported a decrease in labor costs.
• With kiosks in place, customer satisfaction increased by an average of 58 percent overall.

BEFORE YOU BEGIN

As with any major project, a retailer should understand what is involved with kiosk implementation. For example, it typically takes at least a year for a kiosk project to go from planning to implementation. In addition, to maximize value, most kiosk applications should integrate with existing in-store systems. This takes time because kiosk applications and development environments are often very different from legacy retail applications.

An important initial step is for retailers to ask their team a series of questions. Focusing on these at the start can eliminate surprises later. In addition, the answers to these questions will help determine a retailer’s readiness to undertake a kiosk initiative.

• Who will design and write the application? Who will design and build the kiosks?
• Can your existing systems integrate with a new, third-party kiosk system for features like customer loyalty, POS and inventory management?
• Who will be responsible for tech support, software maintenance and hardware repairs?
• How will kiosks be promoted to customers?
• How much time and resources will be required to train staff on the kiosks?
• How much staff time will be needed for routine maintenance and troubleshooting?

GETTING STARTED

When determining development needs and capabilities, it is helpful to break a kiosk project into three categories: Software development and integration, hardware design and daily operational requirements.

SOFTWARE

Improving customer satisfaction is the top priority for any new kiosk system. Retailers usually customize the software for their kiosk application. Off-the-shelf software is only used in about one out of five kiosk projects, and even then it is often customized.

• Integrating kiosk and back-office systems.
  An effective approach is for retailers to use an ISV to develop the customer-facing kiosk application and to work collaboratively for integration with legacy enterprise systems. Kiosks are often networked (either by cable or wireless) and many applications are Web-based, which enables centralized management and synchronization between central information systems and remote kiosks. IT staffs will probably possess the skills needed to support networked and Web-based systems, but companies should take care to ensure that the kiosk can support remote management for hardware and software maintenance and troubleshooting.
• Security and reliability.
  As with any retail system, security is a concern. Kiosk network connections and Web access provide entry points for hackers. Therefore, kiosks must support enterprise security standards and are subject to PCI regulations. In addition, software must be reliable. A major reason behind kiosk use is so customers do not need to work with store associates to complete transactions or get the information they want. They will not be happy if the kiosk crashes or runs so slowly that it does not save time or improve convenience.
• Solution providers.
  Reliability and proven success in the kiosk environment should be guiding factors when evaluating providers. These companies typically make recommendations or have preferred vendors and products they work with.

HARDWARE DESIGN

Customers typically receive minimal instruction on how to use a kiosk system. Since the guidance often comes from the kiosk itself, the interface must be very intuitive for consumers.

• Kiosk design and components.
  While software is an important component to providing reliability, the kiosk design and components are the most important factors. Retailers rarely design and build their own kiosks. Instead, they provide input on the desired functionality to developers who then design a product that optimizes performance, power usage, space efficiency and reliability. Each project calls for its own blend of kiosk form and function.
• One size does not fit all.
  Kiosk solutions are increasingly common, but they are almost always custom. Retailers rarely have the luxury of buying an off-the-shelf kiosk application. A major reason is because the kiosk design, user interface and application must all be carefully developed to support specific business goals. Kiosks can be used to improve customer convenience, drive incremental sales increases or reduce labor requirements, but a single system is seldom called upon to do all these things.
• Targeted solution.
  Sometimes a targeted kiosk solution is the most effective. For example, a client wanted to improve its coupon use rate, and a kiosk system was designed to do this. The kiosk developer was able to successfully integrate the kiosk application with the retailer’s existing loyalty program, increasing coupon use rates to more than 7 percent.
• Be user friendly.
  Kiosks are used to improve customer satisfaction, improve staff productivity and reduce operating costs. During the development process, retailers must do all they can to optimize the user friendliness, reliability and total cost of ownership of their kiosks. Doing so requires careful consideration of myriad details and decisions and frequently involves working with specialized solution providers.
• Be intuitive.
  Retailers usually have limited or no opportunity to train their customers on kiosks, so applications must be as intuitive as possible, and help should also be quickly available either via on-screen instructions or a nearby employee.

DAILY OPERATIONAL REQUIREMENTS

While software and hardware support can each be contracted separately, retailers are more likely to contract for hardware maintenance.

• Daily performance.
  Monitoring can be enhanced with kiosk features that support remote monitoring, management and troubleshooting, along with easy on-site care. These features include network connectivity and the ability for printers, processors and other internal components to issue alerts when there are error conditions.
• Kiosk compatibility.
  Kiosks that are compatible with applications used to monitor point-of-sale (POS) and IT assets are valuable because they allow the organization to leverage its legacy assets and have the convenience of checking multiple devices with a single system.
• Staff training.
  Retailers should commit to staff training to facilitate successful kiosk deployment and ongoing use. When applications warrant, kiosks should also integrate tightly with information systems and software applications.

PRINTERS ARE KEY

Printers are a vital component within kiosk applications. Most staff interactions with the kiosk will be with the printer, and nearly 30 percent of kiosk field service calls are due to printer problems. Here is why it is important to look closely at printer performance characteristics and features: First, printers provide the most features, options and performance capabilities within a kiosk solution, and, second, printer design and features contribute directly to reliability and support requirements.

• Larger is better.
  The larger the printer media capacity, the less frequently paper has to be replaced, which reduces the chances of frustrating a customer because the kiosk is out of paper. Larger media capacities also promote better labor efficiency because less staff time is required to load media.
• Printer performance.
  Direct thermal is the dominant print technology used in kiosks because it is extremely reliable. Direct thermal printers require no moving parts to create an image. They do not use toner or ribbons, and thus do not experience the ink spills or ribbon jams and tears that cause downtime. Paper is the only consumable, so thermal printers are restocked much less often than printers that also require ink cartridges.

CUSTOM ENCLOSURES

Retailers might want to consider going with a provider who can offer a custom enclosure. These should feature bar code scanning technology and a printing capability in a kiosk that is visually appealing, easy-to-use and fully branded for the retailer’s store. This should include labels and coupons that show the store logo and message.

PROMOTING USAGE

Retailers have more opportunities to encourage their customers to use kiosks than to train them on the kiosks themselves. Promotions and signage should set clear expectations for what the kiosk can and cannot do and articulate the benefits of using it. Promotion, signage, demonstrations, kiosk placement and having staff available to help are all resources that retail organizations can use to increase kiosk usage.