Stand-Up Performers

Kiosks are becoming familiar merchandising fixtures in supermarkets, and their presence is expected to grow.

Nobody likes to wait in line, which is a primary reason for the steady increase of kiosks in supermarkets.

As Tommy Woycik, president of Troy, Mich.-based Nextep Systems, puts it, "Blow-by at the deli can cost a busy grocery an incalculable amount of money, as customers who do not have the time or prefer not to stand in line at a busy deli counter cruise by and settle for lower-margin, pre-sliced deli items from the cooler."

Woycik says Nextep's Deli 1-2-3 kiosks capture lost sales while increasing order size through companion product up-sell, and provide a better customer experience that can lead to increased return customers and sales. He says the most popular Nextep model for grocery stores is the Model ML free-standing kiosk that features an ultra-small footprint with a 19-inch touchscreen, an integrated printer and large surfaces for maximum branding. This kiosk is most commonly used for deli and prepared food ordering. Among the company's retail customers are Harris Teeter, Randazzo's, Schnucks and Heinen's.

Customer interaction is another factor in the growth of supermarket kiosks, according to Frank Olea, CEO of Cerritos, Calif.-based Olea Kiosks Inc. "I believe grocery really sees kiosk technology as an opportunity to interact with their customers more than they ever have in the past," he says.

Olea has kiosks installed in Whole Foods, Kroger, Ralphs and Fred Meyer, among other retailers. The company's latest model is the Milan, which Olean says features the ability to hold a large-format multitouch LCD in both portrait and landscape mode in 32-, 42-, 46- and 55-inch sizes. The kiosk can also accommodate a thermal printer, barcode reader and credit card swipe.

Scott McInnes, founder and CEO of Vancouver, British Columbia-based DVDNow Kiosks, says competitive pressure to keep up with other supermarkets and convenience stores is another reason for the increase in supermarket kiosks. Further, he asserts, movie and video game rental kiosks increase customer traffic in supermarkets. "This also results in increased customer loyalty to the store hosting the kiosk, and more frequent and larger transactions as consumers buy items on their trip to return the movie, and extra items to go with the movie," McInnes says. "More and more consumers expect to be able to pick up a movie at their grocery store."

DVDNow produces the S-250 Kiosk, which features a glass front with movies and video games in their original cases, permitting revenue from sales as well as rentals, and the kiosk allows for video advertising on flat-screen panels perched on top of the machine, for cross-promotional revenues, McInnes notes.

"The grocery and supermarket industry has seen a sharp increase in the introduction of self-service kiosks and digital signage due to the high volume of in-store shoppers that these businesses attract, as well as the high return on investment that self-service technology offers," observes Kristen Proctor, marketing director at Gas City, Ind.-based Zivelo.

Proctor says the presence of self-service technology is rapidly increasing in all retail environments, as people have become so comfortable interacting with touchscreen kiosks to access products and services quickly and conveniently that they're demanding the ability to do so.

Touchscreen Opportunities

Supermarkets, Proctor continues, have unique challenges that can be turned into opportunities to increase business through the use of such kiosks as customer loyalty kiosks that allow customers to print coupons to receive discounts and promote repeat business; self-checkout kiosks to reduce the time customers spend waiting in lines; price-checking kiosks that allow customers to easily check the price of an item by scanning a barcode rather than waiting in line to speak to a cashier; information kiosks that allow customers to access information relevant to their shopping experiences, such as recipes, wine and food pairings, and nutrition and diet facts; digital advertising that allows supermarkets to generate revenue from vendors by displaying their interactive product advertising in stores; HR kiosks that allow supermarkets to offer associates access to HR benefits, scheduling and payroll information; and employment application kiosks for new hires to apply for open positions.

Zivelo offers more than 100 kiosk models with various desktop, floor-standing and wall-mounted chassis available, and screen sizes ranging from 19 to 90 inches. Additionally, the company recently launched the i Series line of public-proof iPad tablet enclosures, which Proctor says are becoming increasingly popular for the retail industry.

Steve Bartomioli, national account manager at Long Island City, N.Y.-based Redyref, says, "As with most facets of society, I think we are seeing a trend where everyone has a tendency to move toward digital outlets like tablets and smartphones, and kiosks have a strong resemblance to these types of personal devices, and, as such, they are something that people are becoming more and more familiar and comfortable with."

Redyref makes 28 standard kiosk models with hundreds of variations, Bartomioli notes, based on sizing of monitors, and the modular nature of the design work allows for dozens of components to be employed. "We are also able to provide customized solutions based on our clients' detailed specifications or on discussions we have with clients describing their needs."

The company's most popular kiosk is the TK-4050 Razor, based on its flexibility and slim, sleek design.

Maria Stipp, chief customer officer at Bellevue, Wash.-based Coinstar Inc., sees the increase in supermarket kiosks as due to the fact that they easily enable retailers to add products and services and compete more effectively with specialized competition, they have a small footprint but are one of the most profitable areas in a supermarket, they can scale to meet retailers' size and space, and they offer consumers convenience, simplicity and value. Examples are Coinstar's new Rubi system, which serves freshly brewed café-quality coffee starting at $1, and its well-known Redbox, which rents movies for $1.20 a night.

Last fall, Redbox began a regional test of Redbox Tickets, which sells tickets at face value or below, with a $1 fee per ticket. Coinstar has also entered into a joint venture with Verizon Communications in which consumers can instantly view popular entertainment content anywhere, anytime, using the devices they prefer with a Redbox Instant by Verizon subscription and video on-demand streaming service. Coinstar is currently conducting a pilot with PayPal that enables Coinstar customers to put their coins in a PayPal account.

Coinstar is also currently testing Orango, which sells high-quality, refurbished and closeout electronics discounts of up to 50 percent; Alula, a kiosk that lets people redeem gift cards for an instant cash payment; and Star Studio, a photo booth with digital prints that can be shared via social media.

The future of supermarket kiosks? Nextep's Woycik says: "In examining some higher-end groceries, you see their development toward offering more and more prepared products that cater to an eclectic clientele. Kiosks are a perfect way for these customers to order multiple and prepared items, and then just make a few stops around the store to pick them up while they shop for traditional items."

Olea offers: "I think we'll continue to see a ride in self-checkout, health care-related kiosks, loyalty, and customized gift card or gift card on demand, as well as some new ideas that have not yet been widely publicized."

McInnes says: "In an industry with as thin margins as supermarkets, any edge that increases customer traffic, return visits, loyalty and cross-merchandising of items is certainly a winner. Combine these attributes with the excitement and attractiveness of new-release movies, and you've got a long-term winner with movie rental kiosks. Our growth numbers prove the truth of these assertions."

Stipp cites IHL Group data in noting that the market for self-service transactions was nearly $777 billion in 2011, and is expected to surpass $1 trillion by 2015.

"The future of supermarket kiosks is looking very, very bright," Zivelo's Proctor concludes. "I'm willing to bet that within five years you won't be able to find a supermarket without a kiosk or two in it somewhere."

"Grocery really sees kiosk technology as an opportunity to interact with their customers more than they ever have in the past."

—Frank Olea, Olea Kiosks

"I'm willing to bet that within five years you won't be able to find a supermarket without a kiosk or two in it somewhere."

—Kristen Proctor, Zivelo