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THE PROOF IS IN THE PUDDING

The publisher of KIOSK Magazine set out last month to investigate five companies and their high-profile kiosk projects. Are customers using the kiosks? Have the kiosks seen a return on investment? Read below for our findings.



CINGULAR



Cingular Wireless burst on the scene with a revolutionary new brand message in the wireless industry, focusing on human communication and self-expression instead of technology or lifestyle. With its new prototype retail stores, Cingular Wireless and Callison Architecture, Inc. have ensured a unique store environment that delivers the message.



"Our goal is to create an emotional bond with customers," describes Burton Phillips, Director of New Store Development for Cingular Wireless. "We know from our research that people are intimidated by the wireless buying experience. So we decided to redefine how the wireless industry approaches the shopping experience, from customer service, to visual merchandising, to the store environment."



Step one was an atypical process to prototype design that brought together Cingular's regional, corporate and management teams with the store designers for intensive goal setting. While Cingular's advertising firm, BBDO, was creating the multimedia campaign to promote the new brand, the store concept design team was devising experiential goals that also linked directly to the critical aspects of the brand.



"As soft goods retailers know, if the shopping experience is pleasurable and entertaining, you promote brand loyalty," states Paula Stafford, Design Principal at Callison. "We decided that if we could put the human and the fun back into a technology product selling environment, Cingular would dispel the negative perception of the wireless buying experience and deliver on their brand promise."



The prototype store concept is founded on the principle that people shop in different ways. By designing a space that gives people the freedom to do that, the shopping experience itself becomes one more channel for self-expression.



Three key elements link to three distinct customer types and shopping patterns: the self-navigator who knows what she wants and demands convenience; the inquisitive shopper who wants to experiment and access information as needed; and, the non-technology savvy customer who desires a lot of interaction with the sales staff.



A curved product wall attracts the self-service shopper. Using the open sell concept borrowed from cosmetic retailing, Cingular's take on the typical merchandise wall improves on what is commonly found in wireless stores, locating products and accessories together in merchandise stories rather than by merchandise type.



To satisfy the curious shopper, the Live Bar, an "interactive café" type element featuring live phones, accessories, wireless data devices and Internet access, offers a highly interactive play station. There are no glass cases creating barriers to what are only "dummy" products. The customer is not dependent on waiting to be helped, but for those that need and want help, the Live Bar facilitates interaction with the sales staff and hands-on product experimentation.



"Through actually exploring and testing the attributes of the products, customers learn what best expresses their personality," explains Phillips. "Ultimately, that's how we deliver on our brand promise in the store and makes for the "wow" shopping experience."



And when it's time for the sales transaction, gone is the imposing sales counter, replaced either by seating areas where customer and sales associate can spend time in comfort, or conversely, take the Express Service route.



In keeping with the goal to create an enjoyable experience, the look of the store is high-touch; it is warm, welcoming and comfortable. Designed to have a café-like ambiance, the store uses upholstered chairs, multiple settings for customers to sit and relax or meet with a sales associate, softer, residential lighting and wood finishes.



"For Cingular, the goal isn't technology; it's communication," adds Stafford. "Technology is integrated in to the store environment, rather than imposed. We designed the space to facilitate interaction, to bridge the gap between technology and people."



Technology tools are used to support the experience too. At the New Feature area, the place to go to learn about new products and ideas, shoppers access information on touch screen kiosks. At the Live Bar's e-Station, Cingular customers can access personal account information on-line.



Peregrine Marketing Research conducted customer intercept surveys in all three prototype retail stores as well as in the prototype kiosk. The overall goal of this research was to obtain Customer reactions to the new store design for Cingular Wireless Stores and Kiosks. The research consisted of 210 interviews with Customers who visited a Cingular Wireless Store/Kiosk with the new design.



The vast majority of respondents gave the new design extremely high ratings with nearly all Customer rating the design an 8,9, 10 on the 10- Point Scale. 96% of respondents who visited one of the newly designed stores gave it an overall rating of excellent. 82% of respondents who visited the new kiosk gave it an overall rating of excellent.



Customers found the new design to be eye-catching and bright, yet warm and comfortable. According to the respondents, this new, open and accessible design provides for a store that is well organized and allows customers to interact with the products. When asked, approximately three-fourths of the customers did not mention anything that they disliked about the new design and did not mention any suggested changes or improvements for the design.



Nearly all of the customers who were asked about the Wall of Phones/Accessories in both the stores and kiosk indicated that it would be easy to shop. Those who shopped had an easy time finding the items for which they were looking. Approximately three-fourths of the Customers recognized that the Wall of Phones/Accessories was organized by manufacturer and agreed that this is the best way to organize accessories.



The term "Live Bar" effectively communicated the idea of live phones, live pagers, and the live Internet to almost half of the respondents. Most of the Customers who visited the Live Bar said that they thought it was very easy to use. Signage next to the phones on the Live Bar proved to be easy to read and helpful to most of the people who visited.



When questioned about pricing, respondents commented that the pricing on the displays was easy to find and easy to read. Over two-thirds of the respondents considered the pricing on accessories to be competitive while everyone especially liked the idea of having a lower price alternative - The Cingular Brand.



Furthermore, over 90% of those who went through the sales process felt very comfortable with the overall process. The Cingular Wireless salespeople also gave the design very high ratings and felt that the new design both improves the selling process and is a nicer environment in which to work. The sales staff feel that the comfortable and relaxing environment sets the stage for a more positive interaction, reduces the amount of selling time, and enables customer to experience actual products and services. ∆





REI



Sporting goods retailer REI was at the leading edge of implementing customer empowerment technology, having introduced in-store Internet kiosks back in 1997. To date the company has installed at least one kiosk in each of their 59 stores nationwide, and several stores have 3 or more.



Kiosks are a prime example of how REI has leveraged clicks-and-bricks synergies to better serve their customers and provide a resource for store employees (whether it's information or being able to order for a customer an item that is not in the store).



Via the kiosks, store customers can order any product that REI carries, giving them access to 78,000 items -- the largest selection of outdoor products available anywhere. (This represents twice as many products as a Flagship store and about three times as many as an average-size store.) They also provide access to REI.com's more than 45,000 pages of extensive product information, expert gear advice, "how to choose" instruction and online clinics.



The value of kiosks to the customer is high, based on anecdotal evidence of their use. A representative for the retailer told KIOSK Magazine that kiosk sales are a notable source of revenue for REI. The aggregate sales from kiosks are slightly more than the annual sales of an average 25,000-square-foot REI store. ∆





Federated Department Stores



We asked Larry Lewark, CIO of Federated Department Stores, to make the case for implementing kiosk technology. For those of you not familiar with Federated, they own Bloomingdale's, Bon Marché, Burdines, Goldsmith's, Lazarus, and Macy's. Federated has been one of the most technology-progressive retail groups in the nation.



In May of 2001 Federated bought more than 400 Web kiosks to provide shoppers with easy in-store access to Federated's gift registry. The Federated gift registry integrates WeddingChannel.com, a comprehensive Internet-based wedding planning resource, with Federated's Gift Registry Alliance, which includes their major stores. When a couple registers with one store, their gift registry is automatically available to guests shopping at any other Gift Registry Alliance store or online.



Guests who visit a Federated Gift Registry Alliance store- where they are able to see, touch, and compare alternative gifts- can use the kiosks to access or even print a copy of the couple's registry. Shoppers can then purchase a gift in the store or use the kiosk to make an online purchase and have their selection shipped with a confirmation card in a courtesy gift box.



KM What factor helped Federated determine they needed to explore this gift registry kiosk technology?



LL Federated has had automated gift registry systems for decades, so taking advantage of the new technology to benefit customers was the logical next step. The fact that most bridal customers want to send their gift purchases was a major factor in testing and implementing the gift registry kiosks. It has always been a significant part of the business model.



KM What has been your experience (based on customer feedback) with this kiosk project? Has it been successful? And what are the benefits of this type of technology for customers?



LL The kiosks have been very successful. The benefits are many for the customer -- kiosks allow customers to print or actually complete a Send Sale by selecting a bridal couple, viewing the merchandise on their registry with prices, selecting an item, swiping a credit card and getting a printed receipt. Kiosks give the customer a very fast self-service selling alternative to actually being helped by a sales associate. Of course, associates are always available to answer questions.



From the selling point of view, the benefits for us are strong- kiosks are an alternative option for our Sales Associates to use in addition to the traditional POS terminals. For Bridal, this in effect puts more terminals on the selling floor. ∆



NOTE: Screen images from Federated Department Stores' gift registry kiosk.







AT&T



Early last year AT&T unveiled a new generation of public telephones that combine simultaneous high-speed connectivity to the Internet and other online services, such as e-mail, with voice calling.



Since, the AT&T Public Phone 2000i has been rolled out in major U.S. airports and convention centers for use by travelers and tradeshow goers.



The fee to use all of the capabilities is 25 cents per minute, with a four-minute minimum. The unit accepts credit cards or cash - $1, $5, $10 and $20 bills - for payment. Additional features include a 12-inch, touch-sensitive screen and a touch pad integrated into the keyboard.



The terminal represents an evolutionary step from the Public Phone 2000 that AT&T began deploying in 1991, with the "i" in the name indicating an Internet-enabled version of the original device.



The nascent market for the capabilities of the new public telephones is still expected to experience steep growth over the next several years. Some industry experts forecasted last year that the market for public Internet access terminals and limited-functionality Web payphones would grow to more than $1 billion worldwide by 2005. Although the effects of an economic and travel slowdown have been felt, customers continue to frequent these terminals.



Last month we contacted Jim Agliata, Director of Business Development - AT&T Public Markets, looking for feedback on just how successful the project has been since its launch last year.



KM What factor helped AT&T determine they needed to explore this new communication technology?



JA All of last year, there were 16 billion public telephone calls. Just last month, there were 14 billion e-mails. Clearly, there is a demand in various public markets for the ability to send and receive e-mail and access the World Wide Web. As AT&T Public Markets, we are focused on meeting consumer demands relative to available technology - hence meeting these demands with vending data, not just voice.



KM What has been your experience (based on customer feedback) with this project? Has it been successful?



JA We have done several on site promotions and surveys and received mostly positive comments. Yes, we plan to increase deployment this year to 700 devices. We currently have 350 installed.



KM What are the benefits of this type of technology for customers?



JA You can talk and surf at the same time for one flat rate/minute of 25 cents, cash or credit card. You do not need to fumble with a laptop or use the limited capabilities of tiny PDA's and cell phones. It's your virtual office in the airport, resort, travel plaza; wherever you can find a PP200i, you are in business.



KM Do you have any future plans for this technology?



JA In the near future, the PP2000i will have an infrared port so that you can send and receive data, e-mails, MP3's to/from your PDA. In addition, we will have a high-speed Ethernet port to plug your laptop into. ∆




Circle K



Convenience store customers are able to utilize a complete array of new electronic services through ZapLink public access kiosks in selected Circle K locations. Last October Circle K, owned by The Phillips 66 Company, began providing its customers with high-speed Internet access and other services through a network of proprietary kiosks.



These Internet kiosks provide Circle K customers with a greater level of convenience by offering a variety of services, including: voice-over Internet protocol (VOIP) for telephone calls anywhere in the world, video teleconferencing, local news and information, including a locator service for maps and driving directions, bill payment, including cash payments for Internet purchases, E-mail access, On-line shopping, Internet surfing, and entertainment and games.



All ZapLink kiosks offer the SoftwareToGo electronic software delivery system that allows users to burn their own CD-ROMs with software titles from 14 leading software publishers. ZapLink kiosks also feature an Internet Cash Purchase System(ICPS), a unique payment system developed by Stone Mountain Data that allows customers to pay cash for Internet purchases.



The kiosk technology offers Circle K opportunities for customized programs such as in-store or system-wide on-line promotional coupons. In addition, each kiosk provider operates a separate point-of-sale screen at the checkout counter to create ongoing media revenues. Usage fees will range from free to 20 cents per minute, based on the type of technology a kiosk customer chooses.



The company is testing the Internet kiosk service at 75 Circle K locations in two primary markets, Phoenix and Philadelphia. If the kiosks are successful, a larger rollout is planned for this year.



Just recently we asked Jason Broussard, Director of Internet Services for The Phillips 66 Company, to share with us why the company determined that a kiosk strategy was right for their business, and just how much success the pilot program has had thus far.





KM When did the project begin and how many units have you placed so far?



JB The ZapLink project began about a year ago with actual deployment of the pilot being in October 2001. The number of units in the field currently is 36 in Phoenix, and 41 in the Philadelphia metro area. The plan is to have 1,000 units by completion of phase II at the end of 2002.



KM How are the kiosks serving customers?



JB We are committed to making technology convenient for our customers. The Maps & Directions feature is an example of how we can bring service to our customers through ZapLink.



KM Would you consider the project a success so far, based on what you are hearing from customers?



JB We are very pleased with the initial results of the pilot.

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