Should You Be Selling Kiosks?

Not too long ago, old-school POS (point of sale) VARs could make a decent living selling and servicing electronic cash registers. Then the PC changed everything. The arrival of the PC-based POS station marked the start of a revolution that has led to the demise of the common POS cash register dealer. And the revolution continues. The proliferation of peripherals and software programs designed to automate nearly every business process, coupled with the declining price of and increased demand for POS technology, has dealt crippling blows to the not-so-technology-savvy POS salesman.

The most recent trend to come along and sink lagging POS VARs and integrators is self-service. There isn't a POS vertical that isn't ripe for self-service kiosk solutions and the improved customer service and increased sales they offer. Even those with seemingly solid PC-based POS systems are feeling the pressure from the top of the channel, where self-checkout and kiosks are quickly sprouting up on the floors of big-box mass merchandisers and grocery stores. Trickle-down is already in effect, with self-service kiosks frequently popping up in convenience stores and quick service restaurants. KioskCom and Summit Research Associates report that the dollar value of in-store kiosk sales is 1.5 times more per transaction than sales through traditional POS stations. Additionally, of the 79% of consumers who have used kiosks, 57% said the kiosk improved customer service. With this kind of end user acceptance, isn't it time you evaluated your plans to offer a kiosk solution?

You'd probably be surprised at how easy it would be to add a retail kiosk to your repertoire. You've already got the pieces of the puzzle. Given the right partner and the right approach, you're only an enclosure away from making your first kiosk sale

You're Already Selling Kiosk Components
Douglas Pearlson, CEO of kiosk solutions provider Pearlson Development Corporation (Miami), sees kiosks as a perfect addition to the POS integrator's portfolio. Pearlson says the POS integrator already provides the key devices that are required for a successful self-service kiosk implementation. A kiosk simply integrates the PC, customer display, printer, and even bill and coin accepters, in an engaging package suitable for unattended public use. "If you're selling POS into retail, you're already providing an assisted "kiosk" solution. It still requires a salesperson, so it's a point of sale solution as opposed to a point of purchase self-service station," says Pearlson.

Many POS software vendors offer kiosk software for CRM (customer relationship management) applications that offer product information, coupons, and loyalty program benefits, for instance. Also popular with retailers and readily available to VARs are gift registry kiosk applications. If your software provider is an exception, CAM Commerce Solutions (Fountain Valley, CA), Kyrus Corporation (Taylors, SC), and Netkey Inc. (Branford, CT) are three software providers noted for their kiosk and self-service programs. Just remember that the application software is the artificial intelligence that transforms a kiosk from a bundle of components into a customer service provider. Therefore, software selection should be made with the kiosk user's ability and experience in mind. "The customer needs to be able to intuitively use the kiosk without special training," says Pearlson. Therefore, a good place to start with retail kiosks is a single function application such as a gift registry, customer loyalty station, or product information/coupon station.

Single Function Kiosks Find Success
"You want the kiosk to focus on as few distinct functions as possible, and do them extremely well," says Pearlson. The adoption of ticketing kiosks by the major airlines is proof that single function machines that don't embroil and slow down a user are successful. Airport self-ticketing kiosks ask standard questions, gather standard data, validate the user, and print out a boarding pass. They are singular in function but very efficient at gathering data and delivering service. Pearlson says VARs should use that same mindset in a store. In a garden center, for instance, a customer might be looking for directions on how to fertilize a specific type of plant. A kiosk in the garden center can be programmed with an application that offers expert advice. The kiosk offers suggestions and tells the consumer where to find the items, then the customer picks them off the shelf and packs them off to the checkout station. Corporate sponsorship, by the way, is a great way to help underwrite the start-up costs of delivering kiosk solutions (the kiosk that offers plant care advice, for instance, could be sponsored by a fertilizer company or nursery).

Pick A Partner, Saturate A Vertical
One thing Pearlson advises against is a hit-and-miss approach to selling kiosks. "In a small pilot project, the software is a huge percentage of the startup cost. It's a proof of concept environment," says Pearlson. "But to prove the concept, the software and back end infrastructure must be substantially complete." In a larger project, he says, the VAR's software, support, and hardware costs are all equally weighted. "Depending on the software investment, you may have to sell five, ten, twenty or a hundred units to break even." If you're fortunate enough to land a chain- or industry-wide rollout, the software cost becomes a very small percentage of cost and the hardware, maintenance and service become your biggest expenditures. "If the software solution is complex, there has to be a fairly significant rollout to justify the initial cost. If the software solution either exists off the shelf or is simple, you don't need very many kiosks to make it profitable," says Pearlson.

Therefore, VARs looking to break into kiosk sales should take a partnership approach. A significant amount of due diligence should be undertaken before a kiosk solution is offered to a client, the focus of said due diligence being identification of a kiosk enclosure partner and specialty software provider. "I would not suggest that a company already in POS is going to be very successful climbing the learning curve alone to get into the kiosk business," says Pearlson. Instead, he says partnering with an established firm that already has retail kiosk expertise and who can help customize a solution for a particular POS vertical, perhaps even private labeling a solution for them, is a VAR's best bet. "A kiosk project can be the tip of the iceberg. If a VAR doesn't see the level of ongoing involvement and support required, the rest is lurking to sink the application. Or, a kiosk can be the horn of plenty." By this, Pearlson means when a kiosk is installed to take care of a specific need, it becomes a resource that creates ongoing opportunities for upgrades. "The kiosk is a long-term asset for the store and a long-term revenue opportunity for the integrator," he says. "A VAR should not look at the kiosk as something to be replaced periodically. He should look at it as something to be upgraded and modified periodically." As a matter of fact, Pearlson says upgrades he's made to kiosks recently include a move from laser to thermal printers, adding keyboards and trackballs to touch screen interfaces, and vice versa. While touch screens are the most popular user interface, in some cases a keyboard and a trackball make sense. Applications that include Internet access (and many do) require a keyboard and a track ball to effectively navigate the small on-screen buttons, for instance. "You can't just put an Internet site on a kiosk. That will fail," Pearlson says. "You have to engineer the user interface on each page specifically for a kiosk environment. Large buttons, clear and consistent navigation controls, and fewer choices on each page are some of the critical items."

It's Not About Replacing The POS
It's impossible to miss the trend of self-service encroaching on the POS, even at the attended station. Consumers are increasingly asked to swipe their own cards and enter their own PINs when they check out. But for now, penetrating retail with kiosks isn't about replacing the manned POS station. "A well-trained representative will always have the capacity to offer better customer service," Pearlson emphasizes. But the capacity to serve well and the reality of finding employees who do it are two different things. Pearlson challenges POS VARs to identify which of their clients' customer service activities could be accomplished more efficiently by the customer directly at a self-service kiosk. "If those POS technologies can be housed and can function reliably with a software application that emulates the specific expertise that a salesman must be trained to provide, [via a decision tree or Q&A in the kiosk application itself] the VAR has a potential kiosk opportunity."