Touch Screens: Not Just For Hospitality Anymore

Not too long ago, the only market a VAR could really count on for touch screen hardware and software sales was foodservice. Fast-food establishments, in particular, justified the expense of the touch screen, benefiting from the easily navigable user interface it offered. The touch screen offered the perfect solution for expediting transactions and cutting the learning curve in high employee turnover environments like quick service restaurants. Because this was the most feasible market for them, software developers focused on perfecting fast-food touch screen applications. While other retail environments weren't completely ignored, vendors and VARs concentrated on the bird in hand rather than hunting for the two in the bush.

But now, as touch screen prices continue to fall and software developers expand their horizons, touch screens are becoming more prevalent in other POS (point of sale) and point of service environments.

Retail POS Opens To Touch
Because people have grown comfortable using touch technology to withdraw money from ATMs and navigate their PDAs (personal digital assistants), it's no surprise to find self-checkout kiosks with touch screens set up in retail establishments. The POS kiosks adopted by large retail chains like Kmart are a fine example. The screens walk customers through the entire checkout process in a nearly foolproof, step-by-step manner. "The common thought process in retail was that if cashiers could scan merchandise, they didn't need a touch screen. But you can't bar code a burger," says Elo TouchSystems (Fremont, CA) Marketing Director Steven Abromovich. This was further justification for the expense of touch screens in hospitality. But self-checkout has changed the perception retailers had about touch. Customers who choose to conduct their own transaction need the straightforward interface a touch screen provides.

Elo reports that The Home Depot is another hard goods retailer to recently adopt touch screens at the point of sale, or more specifically, the point of return. Abromovich says that with touch, returns at Home Depot are processed 50% faster than they were with keyboards. However, an increase in payment options has slowed the transaction, he contends. "The financial transaction is complicated by different forms of tender, like credit cards, debit cards, gift certificates, and checks," he says. "It's beneficial to use touch to assist the process - it provides better customer service and gathers data quickly and accurately." He points to another customer, The Men's Wearhouse, as further evidence that touch benefits retail. The men's clothing store uses a large monitor that displays a touch-navigable split screen, one that shows the current transaction and another that shows the customer's buying patterns and recent transactions. The software program was developed in-house by the retailer.

Almost A Commodity, But Still Distribution Dependent
Because touch screen vendors are creating such similar products, touch is beginning to lose its specialty pricing, says 3M Touch Systems (St. Paul, MN) Marketing Director Larry Loerch. Commoditization has not only acted as a catalyst for touch in retail, it has opened the sales door to smaller hospitality environments that formerly couldn't capitalize on the technology because touch screens were cost-prohibitive. But despite touch screen technology's approach to becoming a commodity, touch screen vendors still rely heavily on the distribution channel to disseminate the product. Loerch estimates that 70% of 3M's touch business is done through distribution. But he admits that the long distribution chain can sometimes result in a garbled message. "It's almost as bad as the childhood game where you sit in a circle and whisper a message from one person to the next, and you don't recognize the message at the end," he says. "We sit around a table and determine how we want to portray our product and our capabilities, but it's difficult to get that message to the end user because there are so many filters." One way vendors attempt to ensure the integrity of their messages is to collaborate with distributors on VAR-targeted marketing campaigns. "At the end of the day, the VAR is the one deciding which monitor is going into which system. The VAR is the key to our success," Loerch says.

Flat Screen Demand Causes Price Fluctuation
Abromovich sees the future of touch sales going flat - flat screen LCD (liquid crystal display), that is. "Even though from a worldwide standpoint, monitor sales still outpace LCD sales five to one, in the POS vertical it's probably closer to an equal ratio. Acceptance of LCD flat screens has accelerated quickly at the POS, due to falling costs and less space and power consumption." But, Loerch says now that demand for LCDs has outstripped capacity, pricing on LCDs is beginning to creep back up. He says CRT (cathode ray tube) monitor sales are still strong and that CRT isn't going anywhere, especially now that LCD prices are rising. "In large rollouts, the cost difference between CRT and LCD is quite significant. If you're rolling out 1,000 to 10,000 units and you're looking at a $300 to $400 price variance between the two technologies, the buyer has to decide if the look, size, and convenience of LCD is outweighed by the savings on a CRT."

Elo recently broke a price barrier with the launch of an entry-level LCD touch monitor that the company is pitting against those sold in the $300 range at stores like Circuit City and Best Buy. Abromovich says the company sacrificed some of the product's panel luminescence and viewing angle to bring the price in line with those available over the counter. But the company plans to sell the monitors through POS distribution alone, offering a pedestal mount designed for the point of sale and what it calls "configuration control," or guaranteed form factor. "You can go to Best Buy and purchase 20 or 30 of the same monitor today, but you might be out of luck if you need 10 more next month. It might look different, it might be wired differently, and the documentation might be different," says Abromovich. With the company's new product everything will be identical to the original specs. "You can swap them from location to location, and they're at the same price point as the models that the mass merchandisers are carrying," he says.

The Interface Of Choice?
It is agreed that touch screens have lost some of the luster they had when they were a specialty product, but they will maintain visibility and continue to gain acceptance because of their unique user interface. According to Loerch, touch will proliferate in healthcare, education, and voting applications while continuing to solidify itself as the POS interface of choice. Like its evolution at the POS, the acceptance of touch by other verticals will depend greatly on the development of software applications that match its benefits with the market's needs.