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| Kiosk.com By Ann Silverthorn, contributing editor February, 2005 Is there a business owner on earth who doesn't want to decrease overhead and increase customer satisfaction? The two concepts seem at odds. But are they? For business owners who have contemplated putting a kiosk on the floor, now is a good time to look at the possibilities. It's true that the major selling points of kiosks are that they can lower overhead and increase customers' satisfaction. But that's not all. A kiosk can be an additional revenue generator. When nobody's using the kiosk, it can be a billboard. It's a digital sign for whatever you want to promote. It can call your customers' attention to coupons or sale items. It can run advertising and dispense coupons for the restaurant next door (for a fee of course). Turnkey kiosk solutions can make the entry into this type of venture less complicated. This is especially attractive to the small- or medium-sized business. This article will look at the major issues surrounding turnkey kiosks today. It can serve as a resource as you consider a turnkey kiosk. Turnkey kiosks - One-stop shopping The word turnkey is supposed to generate visions of turning a key as you would in your car and having your machine come to life instantly. According to Hamed Shahbazi, chairman and CEO of InfoTouch Technologies, that is one of the biggest fallacies in the industry. "Sure it may be mechanically turnkey, but there's a lot that has to be done on the back end." Imagine if everything that has to be done on the solution's back end were left up to you. Are you technically savvy enough to design your own kiosk down to hardware, software, and connectivity? You are? That's great! But if you're not, and you'd rather concentrate on your core competencies, like serving your customers, a turnkey solution might be for you. A turnkey kiosk to Tom Weaver, vice president of sales and marketing for Kiosk Information Systems (KIS), means a sort of vending product, a combination of software and hardware. It shows up at your location, you provide connectivity, and it's ready to go. If connectivity makes your head hurt, many vendors that provide turnkey solutions will do that for you, too. For Robert Giblett, director, North America Sales and Marketing for King Products & Solutions, a turnkey kiosk solution is a single source with all of the required resources to meet the total needs of the client. It could range from a single standalone, informational unit with minimal software requirements, to a complex deployment of thousands of kiosks distributed over a large geographical area. The idea here is that turnkey kiosks will vary in complexity, and no matter how simple the kiosk looks when it's delivered, there is a certain amount of custom engineering that occurred before it left the assembly area. Kiosks can consist of many components, plus software. The software, which is the beating heart at the center of the machine, is critical. Some business owners are brave enough to coordinate the hardware, software, design, deployment, and maintenance of a kiosk solution. They deal with different suppliers with ease and enjoy getting their hands dirty, so to speak. Others do not have the time, expertise, or inclination to bring all of the pieces of the puzzle together. They know that kiosks can lower overhead and increase customer satisfaction. Their competitors already have a kiosk solution, but still they hesitate. Actually, those who have hesitated may have been wise. As the kiosk market matures, turnkey kiosk offerings are becoming more plentiful. So turnkey kiosks are not cookie cutter machines, forcing the business owner into a mold that may not be a good fit. As mentioned earlier, a tremendous amount of customization can be done on the back end. Applications in the kiosk can be one or several. The biggest point to consider with turnkey kiosk solutions is that there is only one phone call to make should something go wrong. Or here's a concept that Analyst Francie Mendelsohn, president of Summit Research Associates, favors, "There's one throat to choke. If anything goes wrong, you go to the vendor who sold it to you, no matter whose fault it is." What's out there? Without a doubt, photo kiosks are the most popular turnkey kiosks out there today. Digital cameras have outsold film cameras for the past two years. The problem with them has been printing photos on a home printer. The results have been less than satisfactory. Photo kiosks can be placed in any business and offer photo lab quality prints, something that's difficult for customers to duplicate at home. Also popular are pay-for-use Internet kiosks. Or if there's enough advertising revenue, sometimes it's not necessary to charge a fee for Internet kiosk use. These kiosks may also include bill payment functions, gift card purchases, and VoIP (voice over Internet protocol) service. Bill payment kiosks are increasingly popular, especially considering the large number of unbanked and underbanked customers in the United States. It's difficult to pay bills without checks or credit cards. Most bill payment kiosks accept cash and allow customers to pay bills, such as utilities. Those bill payment kiosks can be turnkey, but they won't be cookie cutter kiosks. The vendor has to work out agreements with billing entities so that the types of bills to be paid coincide with the geographical location of the kiosk. This is where the back end development comes in and simplifies matters for the business owner. Other types of popular kiosks are building directory, horse racing and betting, and even donor recognition kiosks for nonprofits. Just entering the market now are music downloads and ring tones for cell phones. Weaver said if you're pumping gas before a road trip, a music download kiosk might entice a customer to download some tunes and burn a CD for the road. How about DVDs? One turnkey kiosk actually acts as a movie vending machine. Best locations for turnkey kiosks Is there a bad place for a kiosk? Only if customers can't find them, it seems. Where ATMs have reached their saturation point, kiosks have a long way to go before that happens. It is necessary to identify the customers' needs before you decide on what type of kiosk to place in your business. Twenty years ago, the idea of an ATM in a convenience store was unheard of. Now they are commonplace. And interestingly, many of those ATMs are placed there by ISOs (independent service operators). ISOs are looking for ways to increase profitability, and there are hybrid kiosk/ATMs available today that add value to the traditional ATM. Shahbazi sees ATMs "cross-pollinating" with some kiosk functionalities. Multi-functional ATM/kiosks will become more common, allowing customers to do their banking, purchase pre-paid top-ups for their cell phones or phone cards, and even purchase money orders. Those popular photo kiosks are best placed in areas where there is repeat traffic. Convenience stores and pharmacies are good examples, although you may want to situate the kiosk so that the customer has a bit of privacy. This way he won't have to worry about displaying his Hawaii pictures to all the customers who are in line with their milk and bread. Anyone with a digital camera can find value in a photo kiosk. Photo kiosks can accept different types of digital media, offer different sized prints, and may have editing capabilities. Customers may be able to add captions, borders, or frames on their prints. Tourist areas are also prime locations for photo kiosks. Surprisingly, turnkey kiosks are well suited for government agencies. The government deals with a variety of people and has to be consistent with all of them. InfoTouch's Hamed Shahbazi sees killer applications for government, such as drivers' license renewals, payment of fines, and fishing and hunting licenses. Kiosks also solve the problem of limited hours of operation at government offices. What's the catch? If a vendor tells you that if you deploy a kiosk solution for $15,000, you'll never have to do a thing to it, six months later you'll make your money back, and within a couple of years, you'll be able to retire, will you believe it? At the very least, you'll be skeptical. Vendors who have over-promised have set a negative tone for kiosks, said KIS Exec Tom Weaver. King Products' Robert Giblett commented, "Some businesses hesitate to deploy kiosk solutions because they have a limited understanding of the technology. They get confusing messages from suppliers that try to sell them one part of the solution and not a turnkey solution." Many business owners are not up to the challenge of identifying all the bricks they need to build their solution and do not have time to coordinate the product. And they may also be fearful of maintenance issues down the road. No one wants a dead kiosk taking up valuable floor space, as Analyst Francie Mendelsohn observed when she was on a cruise recently. During her trip, she kept an eye out for kiosks so she could evaluate them. She didn't have to look far. She spotted a very attractive kiosk onboard the ship. Unfortunately, it was dead. It was nothing more than an attractive piece of hardware that took up space. Had it been working, it could have directed passengers to activities throughout the ship or advertised for pay services. Had it been working, passengers would have used it, and other passengers would have seen them using it and might have become curious. The passengers who used it would have told other passengers, and so on, and so on. The kiosk on Mendelsohn's ship took up space and helped give kiosks a bad name. For retailers, giving up even a square foot of floor space can mean lost revenue. They may be hesitant to devote floor space to a kiosk, especially if they've had experience with kiosks that don't work. Another consideration: As popular as they are becoming and as promising as the technology seems to be, kiosk solutions are still rather expensive, usually $10,000 or more for each kiosk, depending on the application and the hardware. Do your homework Savvy business owners know that there has to be a compelling reason for customers to use the kiosk. They won't use it just because the business owner has installed it. Mendelsohn advises business owners to sit down and figure out what the kiosk is supposed to do for their customers. It should not be a solution in search of a problem. "In the end, your customer will tell you by voting with their fingers whether the kiosk is useful to them or not." Read what the analysts are saying. Summit Research (www.summit-res.com) offers Kiosk and Internet Technology and the Kiosk Industry Directory which lists 550 companies in the industry. It also helps to talk to other business owners who have deployed kiosk solutions already. You can visit Kioskmarketplace.com to gather information on vendors. Make sure your vendor is well qualified. Pick a company that can design, engineer, manufacture, service, and maintain the units that they build. Make sure that the software included has been tested thoroughly. Software is critical in a kiosk situation. Giblett advises that software should be stable, flexible, and well-integrated with the hardware platform. It should be open, allowing for customization, and state-of-the-art reporting features are a must. If you've identified a niche and decided to invest in a kiosk, first figure out the best location for it, considering factors such as traffic patterns. Of course you must have a power source nearby. Shahbazi recommends that someone knowledgeable about your business needs to be present when the electrician comes, so that the plug is installed in the correct location. The same goes for networking and Internet access. As with real estate, location is paramount, so figure out where the kiosk will be the most successful, and then make sure that location is reasonable. If not, you may have to reconsider that location, or reconsider whether you want to deploy a kiosk solution at all. When deciding on Internet connectivity, Weaver advises against dial-up. Dial-up is too slow, both from a usage and connectivity standpoint, especially if the kiosk payment system requires credit card authorization. DSL is a better bet, but you need to make sure that DSL is available in your area. Most importantly, make sure from the beginning that you'll have a good maintenance plan so that if something goes wrong, it can be repaired almost instantly. Be ready for upgrades and enhancements After you've deployed your kiosks in one or more location, you may find that your customers are asking for another feature or two. If the kiosk has built-in modularity, adding another component should be relatively easy. If it is not a modular design, it may be expensive. Some vendors will build in functionality that the business owner might not perceive a need for yet. Six months to a year later, he may change his mind and it will be relatively simple to enable that functionality. Software upgrades can be relatively easy, provided the kiosk is connected to the Internet. If so, software upgrades can be pushed out to all kiosk locations at the same time. Remote monitoring is a feature that will help in this situation. It can alert you if your bill acceptor is full or your printer is out of paper. What's down the road? Turnkey kiosks offer quicker deployments and they are more cost-effective because no technical or business application experience is required from the client, commented Giblett. "The cost of ownership will be lower, because only one company needs to be called if the kiosk needs modification or maintenance." Weaver sees a bright future for turnkey kiosks. "As the country's population matures, the people who spend money are going to be the people who grew up with technology." They are not computer phobic, and many actually prefer interfacing with a computer. Weaver said that as more types of applications become available, kiosks will be popping up in unconventional places. He sees the combination of more applications and the younger generation as major factors in the future success of kiosks. Shahbazi sees smoking hot applications in the near future. Digital photo kiosks will continue to be popular, along music downloads, financial services, and bill payment services. However, he cautions that product mixes might be popular depending on region. He said, "Business owners must do their homework and align with the right industry so they don't have to go through all the development by themselves." Turnkey kiosks are making it easier for small- and medium-sized businesses to stay competitive as more customers seek out automation and self-service. Vendors that offer these solutions have the expertise to put them together and can pass the economies of scale onto businesses. As always, business owners should not go into any new venture blindly. They still need a solid business plan and must objectively evaluate the offerings of the vendors they are considering working with. Turnkey Kiosk Vendors In addition to the behemoths IBM and NCR, there are many companies offering turnkey kiosk solutions today. Many turnkey solution providers used to be known as enclosure manufacturers, but are now providing the entire solution because of customer demand. Following are some of the turnkey kiosk providers, a sampling of the solutions they provide, and their Web sites. Top Ten Reasons Why Kiosk Projects Fail Hamed Shahbazi, chairman and chief executive officer of InfoTouch Technologies Corporation, developed the following ten reasons why kiosk projects fail. Turn these reasons around and you'll increase your chances of success with turnkey kiosk solutions. 1 -Lack of a detailed business plan (kiosk does not fit into the business strategy). 2- Lack of intelligent signage (kiosk's intent is not communicated). 3- Lack of robust kiosk management/security software (in order to maximize up-time). 4- No management buy-in. 5- In-store staff lack training on kiosk's benefits/limitations. 6- Poor placement on retail floor. 7- Absence of a good, field service maintenance program. 8- Content not engaging/too boring. 9- Too complicated (doesn't pass the "Can My Grandmother Use It?" test). 10-Not architected into retailer's consumer service strategy. (Never forget: It's all about service.) | |
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