Kiosks Becoming the Bridge Between Online and Brick-and-Mortar Retail


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Kiosks: Becoming The Bridge
Between Online And
Brick-And-Mortar Retail
They can present significant time and cost savings for retailers while enhancing
the customer’s perception of the store’s brand, image, and service.

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Kiosks Becoming the Bridge Between Online and Brick-and-Mortar Retail

  1. 1. FEATUREKiosks: Becoming The BridgeBetween Online AndBrick-And-Mortar RetailThey can present significant time and cost savings for retailers while enhancingthe customer’s perception of the store’s brand, image, and service.BY MARC CHRIQUI AND MELANIE TABET“No thanks. I’m just looking.” Today’s Kiosk Applications If these words don’t make a brick-and-mortar retailer cringe, Retail kiosks currently make up the largest segment of deployedthey should. kiosk applications, with analysts estimating that they comprise 2 Chances are, the customer uttering them has unanswered at least 30% of the entire self-service kiosk market. Kiosksquestions and a need for more information, but feels that include such varied functionality as self-service, bridal and giftasking a salesperson will lead to unwanted sales pitches and registry, information lookup, access to additional productbiased opinions. Often, they may also be reluctant to share options, promotions, account management, way-findpersonal information, preferences, and budgets with a stranger. directories, employment opportunities, product lookup,A study conducted by The Wharton School of the University of company information, Web site access, and digital signage.Pennsylvania concluded that 30% of customers were really Their vast capabilities mean they can be found in everythingbothered by, and would likely not return to, a store where they from department and big box stores to grocery and conveniencefelt the sales associate was following or pestering them when stores, making kiosks a viable option for the majority of retailers.they preferred to browse the store on their own. However, thesame study also found that having access to product Please Help Yourselvesinformation and location increased the frequency of future The rising popularity of do-it-yourself thinking has spilled over 1store visits. Therefore, leaving the customer to navigate the into the way people shop. Easy access to a wealth ofstore without guidance could also result in relinquished sales information means consumers are much better informed thanand missed opportunities for building customer loyalty. in the past. They know what their needs are and often prefer In addition to the challenge of satisfying existing in-store to educate themselves on a topic rather than trusting salescustomers, the prevalence of online storefronts is presenting personnel to provide them with information.other obstacles for brick-and-mortar retailers. Although online Today’s rampant dependence on computers, the popularitybuying offers convenience and variety, many still enjoy the of video games, and reliance on ATMs are only some of thetangible practice of walking into a store and actually shopping ways that consumers are experiencing interactivity on a dailyfor merchandise. basis. Although not for everyone, many people have come to However, as customers grow increasingly accustomed to expect and even demand a dynamic self-service option thatmaking online purchases, their in-store expectations are provides them with an alternative to waiting for service tochanging accordingly. If brick-and-mortar retailers are to come to them.successfully compete with their online counterparts, they must Kiosks are the ideal venue for empowering customers tooffer customers incentives to visit their stores rather than retrieve detailed product information, discover additionalpurchase similar items from a Web site. Often short on time services, and access the company’s Web site directly from theand looking to make the most sensible purchase, customers are store. No longer exclusively relying on sales associates for thismore likely to shop in stores that optimize their experience-to- function reduces the odds of customers receiving inaccuratevalue ratio. information, allows for better control over product messaging, So how can a retailer solve the dilemma of providing and guarantees the consistency of sales presentationscustomers with an interactive, informative in-store shopping throughout the chain.experience that will leave them feeling inspired rather than This feature also eliminates the frustration that customersirritated? The answer lies in interactive digital retail kiosks. associate with not being able to find a sales associate when they30 The Retail Solutions Update
  2. 2. FEATUREThe information captured through digital kiosks helps retailers gain aclearer understanding of purchasing behavior, allowing them to bettersegment and target their customers.need one. The Wharton study found that not having access to, Rewarding customers with personalized gifts and promotions obtained through the kiosks results in better data capture for the retailer, aor being ignored by, a sales associate had a significant impact on more satisfying shopping experience for the customer, and,customer loyalty. With kiosks equipped to execute many of the ultimately, increased sales and loyalty.functions traditionally performed by sales personnel, the risk oflosing customers due to insufficient staffing and uncontrollable reciprocation. The theory is that human beings feel obligatedfactors, such as personnel’s interpersonal skills, sales approach, to repay, in kind, what others provide for them. For example,and presentation styles is greatly reduced. using a “pick up your gift here” sign to lure customers to a kiosk and presenting them with a personalized offer for using itI Won’t Have What She’s Having increases the probability of receiving accurate information fromAware of the importance of market segmentation, many them as well as increasing their allegiance to a store that isretailers struggle to collect accurate customer and demographic rewarding them for shopping there. Discovering that their offerdata that will allow them to create targeted promotions. will be redeemed automatically at the POS, they areBombarded with countless advertisements on a daily basis, encouraged to buy more during the current visit instead ofconsumers are likely to ignore or even avoid any messages that receiving the promotion after they are done shopping and onlyare not directly linked to their wants and needs. By arming redeeming it upon their next visit. Offering customized andconsumers with tools such as kiosks that generate information, time-limited promotions (for example, valid today only) whileinterest, and promotions, retailers are combining traditional the customer is still shopping counteracts any dissonance orpush strategies with pull strategies. This lets customers create hesitation they may be feeling about making the purchase,the demand for products through interactivity rather than since there is a powerful enough reason to buy now.passively accepting what is offered to them. The information captured through digital kiosks helps While POS software is sometimes equipped with data retailers gain a clearer understanding of purchasing behavior,capture and promotions functionality, customer reluctance to allowing them to better segment and target their customers.openly share personal details, combined with cashier errors This introduces a new dimension to targeted promotions bymade when entering information, often produces skewed granting true value to the overall customer experience. Kiosksresults leading to incomplete and inaccurate customer provide the ability to instantly customize promotions accordingdatabases. Furthermore, offering promotions at the register to demographics, browsing patterns, and purchase history,when the customer is ready to pay and eager to leave is a making them the perfect portal for supporting such initiativesmissed opportunity for enticing them to select additional items as personalized loyalty programs. Using a card or loginbefore they head for the cash. Finally, capturing data at the credentials for authentication, customers can create and accessPOS leads to longer queues, which are the single largest drivers their accounts directly from the store, building anticipation asof negative word-of-mouth. to the type of promotion they will be receiving on this Using kiosks for data capture can help enhance the particular visit and giving them a reason to return. Offeringstore/customer relationship by allowing customers to provide bonus loyalty points for feedback on products, service, and theinformation on their own terms. By offering exclusive, in-store kiosk itself generates incentive for customers to use the kiosk,incentives for using the kiosk, retailers simultaneously reduce promotes the loyalty program, and supplies the retailer withthe probability of data entry error and encourage repeat store additional, valuable data that would otherwise be nearlyvisits. In his bestselling book, entitled Influence: The Psychology of impossible to gather.Persuasion, Robert B. Cialdini discusses the powerful concept of Since new promotions can be evaluated using Web The Retail Solutions Update 31
  3. 3. FEATUREcatalogue browsing statistics, business intelligence analytics,and data mining, kiosks present a low-risk testing channel, aspromotions and campaigns can be altered quickly should theynot be producing the desired ROI. Being able to promptlyexamine responses to marketing campaigns helps quantify andvalidate promotional initiatives, providing a solid basis forfuture programs.Making More, Spending LessOther major aspects in the competition between online andbrick-and-mortar operations are the high costs and limitedhours of operation associated with maintaining a physical store.Overhead and inventory costs associated with brick-and-mortarretailing cut into profit margins and ultimately affect the Logging into the interactive kiosk using a loyalty card providesbottom line. As well, limiting selling time to the hours when customers with access to their accounts, product and browsing history, and personalized promotions while allowing the retailer tothe store is open creates constraints for both the retailer and track the data.customer. Kiosks help retailers cut down on overhead costs andexpand their selling capacity by performing many functions the ideal channel forpreviously conducted by sales associates, lowering the cost of offsite or after-hourspromotions and marketing campaigns, expanding product sales and increasingofferings beyond store confines, and executing HR functions. overall market exposure. With an abundance of information, such as product and Kiosks also reducepricing information, in-store product lookup and location, marketing costs andtransactional capabilities, and so much more now available increase returns bythrough the kiosks, retailers can focus on providing more in- presenting the idealdepth training for fewer staff members, teaching them how to setting for supportingwork in conjunction with the kiosks to add to the overall dynamic advertising,customer experience. Armed with knowledge of the customer’s cross-selling, and up-profile and interaction history, the sales staff is empowered to selling efforts. Usingtailor their approach and suggestions according to customer product details, demo- Interactive retail kiosks support cross-preferences, leading to a more focused sales process, graphics, and purchase selling and up-selling efforts. For a example, the kiosk may suggestdiminishing the impression that the sales associate is ill- and browsing histories, matching hat and gloves to a customerinformed or uninterested, and generating higher sales for the suggestions can be made browsing scarves.retailer. for complementary or Although kiosks reduce the amount of personnel required in upgraded items. For example, if a customer is browsing aa store, retailers still need to hire staff. With high turnover rates particular coat and their historical data indicates that they haveand inventory shrink linked to low employee retention in the spent more money on coats or browsed more expensive coats inretail sector, recruitment and training remain large expenses for the past, other coats at higher price points may be suggested,any retailer. Kiosks present the opportunity for on-the-spot along with matching scarves and hats. Also, using communitycollection of job applications from people already interested in tools and suggestive selling to provide expert and consumerthe store and familiar with the merchandise. As well, they reviews, as well as to notify customers that others with similarreduce training costs since customers can obtain most of the browsing and buying patterns have purchased an item, mayinformation they need straight from the kiosk, transforming it persuade those who are reluctant to finalize a purchase tointo a sales aid and shifting the sales pressure away from the follow through with the sale. In addition, the opportunity forassociate. digital signage on kiosks optimizes customer exposure to Through kiosks, retailers now can offer customers a broader targeted messaging both when they are using the kiosk andproduct range while actually reducing the high cost of carrying when it is unoccupied, providing variety and personalizationphysical inventory. Customers can easily browse merchandise not possible through conventional static advertising.available beyond the physical restrictions of the store, lowering With their ability to dispense product information; endorsethe risk of the customer leaving to search for the item in cross-selling and up-selling; broaden product offerings;another store, cutting the cost of carrying excess inventory, and decrease overhead, promotional, and inventory expenditures;reducing the need for markdowns due to overstock. As well, and facilitate recruitment, kiosks present significant time andkiosks can be located in areas outside the store, making them cost savings for retailers while enhancing the customer’s32 The Retail Solutions Update
  4. 4. FEATURE perception of the store’s and making them more likely to leave the store and buy brand, image, and ser- elsewhere. Additionally, not adapting the kiosks in response to vice. customer feedback or patterns uncovered through data mining or business intelligence tools could result in the retailer being No Kiosk Is An Island viewed as outdated, actually damaging the store’s image Kiosks must be part of a instead of enhancing it. greater network if they are to truly offer a rich What The Future Has In StoreIntuitive touch screen user interfaces experience and facilitate As consumers continue to demand the ability to control andlead to a more pleasant encounter and the buying process. manipulate what they are exposed to and how they are exposeddiminish customer frustration. Electronic interactive to it, retailers must evolve beyond traditional advertising and kiosk applications must promotional and sales methods if they are to not onlybe connected to, as well as driven from, all customer-facing effectively reach but truly connect with their customers. Whilechannels and touch points, including the POS, Web site, not yet ready to abandon in-store shopping in favor of strictlycustomer service centers, CRM software, and the kiosk itself. online purchasing, the speed and convenience of e-commerceThis means that any time a customer is identified or presents an attractive option for time-starved customers.authenticated through any combination of loyalty card Interactive retail kiosks combat some of the challenges(barcode or swipe), Web site login, name, phone number, retailers are facing when trying to compete with online vendorsaddress, or postal code, the data obtained should feed the by enhancing the in-store experience through more rapid,kiosks to ensure consistency and optimize the level of dynamic, and rewarding options. Quickly becoming the bridgepersonalization bestowed upon the customer. Leveraging between online and brick-and-mortar retail, kiosks are theinformation from e-commerce, POS, business intelligence, and newest channel for those looking to grow their business, andCRM allows for highly personalized in-store kiosks that fully retailers using them to engage customers and offer them anengage customers and supply them with the perfect blend of exciting shopping experience will be the ones to retain theirin-store tangibility and online convenience. loyalty. The success of interactive kiosk applications is dependentupon many factors. Before embarking on a full deployment Referencesthroughout a retail chain, retailers must determine how kiosks 1. Hoch, S., Courtney, P., Parker, J., Price, R. (2008)will fit into their overall business models. Not all kiosk features “What Customers Expect Sales Associates Toare suitable for every type of business, and determining Contribute Toward The In-Store Experience,”functionality based on customer needs will aid differentiation National Retail Federation Conference, New York, NY,and improve competitive advantage. Jan. 16, 2008. Educating both staff and customers on the benefits of using 2. Kiosk Information Systems. Home Page. (2008)kiosks is crucial to deriving maximum return from the [Online]. Available from: Staff must view the kiosks as useful assistants and apps/ taught how to help customers obtain what they need fromthem. Conversely, customers have to be instructed as to what thekiosk offers, why they should be using it, and why they should Marc Chriqui is the CRM solutions manager for Raymark, a leadingcontinue to use it. Without proper endorsement from global provider of integrated retail software solutions. With a degreemanagement all the way through to the customer, long-term in computer software engineering, he has nearly a decade ofsuccess of the kiosk strategy will be hindered. experience building and architecting CRM- and business Making kiosks simple to use and providing value-add that intelligence-driven retail applications. Marc possesses a deep understanding of how retailers can convert the transactional andcannot be found online also are essential to increasing operational data stored in CRM and business intelligence solutionscustomer use. Intuitive touch screen user interfaces lead to a into customer loyalty and increased profitability, and believes that interactive kiosks aremore pleasant encounter and diminish the chances that the future of in-store retailing. Please visit to learn why some of thecustomers will become as frustrated with the kiosk as they world’s most prestigious retailers manage their operations using Raymark’s Xpert-Series.would with an uninformed sales associate. As well, studyinghow customers shop and placing kiosks in prime locations will Melanie Tabet has spent her career researching and writing about how retailers use software solutions to improve business processes, enhance the shopping experience,elevate the frequency in which they are used. and increase customer loyalty. Melanies commerce and marketing background, along Finally, retailers must invest in maintaining and improving with her experience in the retail software industry, have allowed her to examine andthe kiosks’ appearance and functionality. Kiosks that are out-of- document the operational, financial, and CRM benefits of implementing advanced,order reverse the desired effect on loyalty, angering customers, innovative retail The Retail Solutions Update 33