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Next-Gen Kiosks Could Guide You Through Holiday List

Written by Evan Schuman
January 3rd, 2004

Shoppers this holiday season are going to run into a blizzard of next-generation kiosks, about three times as many of the devices as they saw last year, according to a new report from analyst firm Frost & Sullivan.

The report comes as retailers learn that it’s better to give than to receive, especially when CRM (customer relationship management) and self-service are involved.

The kiosks will be hung by the aisle with Care?, in hopes that Mr. Customer soon will be there. The products were nestled all snug on their shelves, with visions of buyers wanting to scan bar codes themselves.

But these are not old-fashioned kiosks. The analyst report is seeing a surge of interest in current-generation PoD (point-of-decision) kiosks, which Frost defines very specifically: a standalone or networked, interactive, self-service device with a primary customer interface in the form of a touchscreen or programmable buttons.

The typical PoD has a diagonal screen size between 5 inches and 9 inches, resolution no less than quarter VGA, and multimedia capabilities including full-motion animation, according to the Frost definition.

Clearly, such units are not destined solely to scan bar codes to reveal pricing, but that’s overwhelmingly (63.4 percent) how they are initially being used, the report said.

In order of popularity, other current retail uses are music sampling (31.4 percent), advertising/promotions, guided selling, contextual product information, loyalty program, store map and brand-specific information.

The potential to use multimedia for sales, demos and creative marketing?and to use these LAN-connected devices to link with inventory and ultimately with CRM systems?is absolutely there, said report author Vineeta Kommineni, a senior research analyst at Frost & Sullivan.

“Most of them are being used for price-checking at this initial, early-adoption stage,” Kommineni said. “The power of CRM has yet to be unleashed. There is so much more customer information to be mined,” she said, adding that she expects greater PoD kiosk sophistication to materialize “in another two to three years.”

Kommineni pointed to the almost tripling of the new device’s deployment?from 12,444 units in last year’s fourth quarter to 36,168 units in the same quarter this year?as proof of a major trend. “To have 36,168 is not a low number at all,” she said. “Remember that this market is in its infancy. Some 70 percent of unit market share is being held by products that were only introduced in 2003 and 2004.”

The Frost & Sullivan report projects a steady?although less-dramatic?growth curve for the foreseeable future, with about 44,000 units projected for next year, about 53,000 units for 2006 and Frost & Sullivan projects seeing about a quarter-million units by 2011.

Guided selling is potentially the most interesting application growth area for these small, portable units. This starts with a customer asking about, let’s say, a printer cartridge. The kiosk would ask questions about the type of printer being used and would respond with a list of appropriate cartridges.

Given that the kiosks are on the LAN (and have relatively little hard-disk capacity), the next step would be to allow that list to indicate which items are in-stock and what nearby stores in the chain might have it. It might ultimately be able to communicate with?or actually to be?a shopping-cart-based mini-kiosk, which could then use a navigational system to bring the customer right to the item. If a large quantity were needed, the kiosk could potentially message workers in the warehouse to send over five cases.

Today, though, Kommineni said she sees PoD kiosks as being in a stage of very early adoption?and perhaps even early experimentation. Kiosk vendors “need to convince the IT folks: ‘Look, this product won’t interfere with your plans. The software is all ready and there’s not much tinkering around needed,'” Kommineni said.

But far removed from yesteryear’s dumb terminals, the new PoD kiosks also are designed to be easy to customize. “The building blocks are right there, should the retailer need a more complicated application,” Kommineni said.

Maybe it’s time to rewrite other holiday classics. Perhaps “Rudolph, with your touchscreen so bright, won’t you scan my Samsonite??” Maybe not.


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