Kiosk Krazy
Yesterday’s vending machines are today’s technologically sophisticated kiosks and, man, are they popping up everywhere. Just look at news from the past week.
While you may have thought there weren’t any more places left in front of retail stores to go and rent a DVD, there now comes the news that Family Dollar is putting Redbox units in front of its roughly 7,200 locations.
"As Family Dollar continues to broaden its assortment and increase relevancy to our customer, Redbox is a natural addition to our growth initiatives," said Michael Bloom, president and chief operating officer for Family Dollar, in a statement. "The Redbox kiosk is the definition of convenience for movie and game rentals and will provide value, convenience and additional reasons for customers to visit Family Dollar stores more often."
Also making news in the kiosk world — Seattle’s Best Coffee. The division of Starbucks announced that it would be rolling out thousands of kiosks to sell cups of its coffee, mochas and vanilla lattes. Seattle’s Best spokesperson Jenny McCabe said that with prices starting at $1, the company believes each unit will dispense about 10,000 cups each.
Seattle’s Best is looking to have 500 "Rubi" kiosks operating by the summer with thousands more located in food, drug and mass merchant locations to come. The kiosks grind and brew fresh whole beans for each single cup. Each unit, according to a press release to announce the venture, "occupies approximately nine square feet and provides increased foot traffic and a turnkey solution for retailers, creating operational efficiencies."
The coffee company is working with Coinstar, parent of Redbox, on the venture.
"This relationship is a logical next step in our strategy to bring great coffee to new and unexpected locations where it’s traditionally been hard to find great coffee," Jim McDermet, senior vice president and general manager of Seattle’s Best Coffee, said in a statement.
- Family Dollar Brings Redbox Kiosks to Its Locations Nationwide – Family Dollar Stores, Inc.
- Redbox Kiosks Coming to Family Dollar Stores – Inside Redbox
- Coinstar, Inc. and Seattle’s Best Coffee Sign Exclusive Agreement to Roll Out Thousands of the New Rubi Kiosks in Grocery, Drug and Mass Channels – Coinstar, Inc./Seattle’s Best Coffee
- Starbucks Unit In Coinstar Kiosk Deal – Bloomberg News
Discussion Questions
Discussion Questions: How big a part will kiosks play in retail in the years ahead? What untried product categories do you see being developed for kiosks in the future?
Vending machines have been very sophisticated in their offers. You can now get everything from steaks, to whole pizzas, to Apple products from a vending machine/kiosk. They offer retailers an opportunity to carry items that they might not be able to carry otherwise in a compact space without all the issues of ordering, inventory, etc.
Looked at another way, they are a compact version of a store-within-a-store concept except in many cases these can be placed outside the store. In a few cases they are the store such as 24RoboMart mini c-stores. I expect their influence will continue to grow as retailers look to expand their offers with minimal effort.
Kiosks have been a retail staple for decades, and with new 3-D display technology, the sky is the limit. High-end electronics, apparel, jewelry, etc. Just look at the virtual malls in the train stations of South Korea.
As I sit at my desk, with two entirely different kiosks staring back at me, I can’t help but think of the myriad of answers to the questions posed here. One of the fundamental issues that has never been resolved by the industry is “What exactly is a kiosk?” Redbox and Seattle’s Best machines are not really kiosks at all, but rather, touch screen enabled vending machines. The problem is that with no good definition of a kiosk, or accepting that these days, the lines are blurred between kiosks and vending, the answer to what the future of kiosks or self serve machines are, is not straightforward.
I stand firmly (and mostly alone!) in stating that the typical stationary informational kiosk (often regarded as the hero of the “endless aisle”) is a doomed technology. Functions that these units have provided such as wayfinding, building directories, product information, etc., have rapidly moved to more appropriate technologies such as digital signage and mobile. Anyone that understands human factors relative to kiosks knows that endless aisles are far more hype than they will ever live up to. It may still take a few more years and there will be more roll-outs in the interim, but the end of these units is clearly in sight, except for edge cases to address communities that can’t afford the personal digital technologies that will replace them.
Multi-purpose kiosks that have clever purposes have a future. Consider kiosks that measure feet for shoes or orthotics and other types of units that help demonstrate products or add value to the selling or service proposition in specialized ways. Done extremely well, they have a place in the future.
Kiosk/vending machines will do well in the proper context. Vending has never really gone away because it serves a purpose providing quick and easy service. Compare a DVD rental kiosk at a destination (like a supermarket) where consumers are headed anyway. It’s far more convenient than a second stop at the rental store. So, contemporary interactive vending machines are a natural progression of that model.
Most simply, the success of kiosks is a matter of location, quality of service, and quality of product.
Increasingly big across several retail segments and product categories. In particular the shift will be from discreet transactions (i.e. buy a soda, rent a movie) to part of the omnichannel shopping journey (i.e. scan a QR code and have delivered, guided selling/remote expertise, customization, pick-up of online orders).
To tag onto Ken Lonyai’s comments — this concept really isn’t “vending” at all, in the conventional sense. A much more appropriate description is “automated merchandising.”
But the world at large will probably be no more accepting of that argument than they were of Dave Nichol’s contention that truly differentiated retailer brands should be called “proprietary brands” instead of “private label.” Oh well.
That’s too bad though, because in instances like these, the terminology really does connote a fundamental difference in the understanding of the concept.
“What’s the point?” you ask. What’s the difference in automated merchandising and plain vanilla vending. Good question and here’s one man’s stab at the answer. Vending presents products in a static environment. The product hangs there (or is represented by a button with a picture) and you either pick it or you don’t based on its availability alone. It is a location-based convenience play in the purest sense.
Automated merchandisers are, above all else, interactive. You can ask for information about the movie, product or service you are considering. You can scroll through many more choices than you could ever be presented with physically. In the case of the new soft drink and other beverage merchandisers, you can even create your own custom blend right there on the screen. It is the ability to interact with the device that creates the difference and of course, this is driven by digital technology.
Get ready for a world where every transaction in your life can be “self-scan” if you want it to be.
Kiosks for coffee and other beverages have just touched the surface for how “big” they will be over these next five years. I think we might start to see fast moving commodities in personal technology items start to go “kiosks” in the near future. For a sneak preview, take a look at the what has already been set up in major airports, particularly DFW. You can buy anything you need for your iPhone or laptop or other personal tech item. Hey, I would not be surprised to soon see kiosks that sell ink jet refill cartridges coming soon to a supermarket near you. These guys need to be replaced quite often and not everyone wants to make another visit to the office supplies store to buy the next one. There will be lots of other examples, as well.
I’ll play the jaded role on this one: if you can’t get an employee to provide fast, reliable, knowledgeable service, what do you turn to? See the image above.
But more seriously, with cellular or internet access to maintain inventory, a kiosk/vending machine is 24/7 delivery of an instant experience. And it may also serve a role for testing out what may turn out to be a great full store location, or provide in a very small space a near-full store experience where that kind of experience would never be possible.
It’s such a great use of real estate and the technology is so much better than it used to be. Kudos to Coinstar/Redbox for unlocking the space once again, and for aggressively testing categories to figure out what will work in this format!
Mr. Detroyer makes good and concise points. I would add one more; for branded food and beverage, with a $1.00 price point, this should entice people to try/sample their product.
When I read this article it caused me to think about the ability of brands to truly be available 24/7. I seem to remember Coke’s mission was to be available everywhere and at any time that someone wants one. While not stated as well as they do, it is a a very simple goal that is also quite difficult to achieve. A major means of achieving that market saturation is through vending machines or kiosks.
As vending machines continue to be enhanced with technology they appeal to more sophisticated brands and customers. A machine offering Seattle’s Best Coffee will appeal to customers that would shun a generic coffee machine. Great market expansion possibilities with the newer, better positioned machines.
If the kiosk meets a consumer need, then it will be successful. The key is consumer need. Clearly as retailers see the success of kiosks like Redbox, then other solutions will be tried. The key is as always the consumer. Does it meet the need of the consumer? Will the consumer accept it? Does it satisfy a need that the consumer has or thinks they have?
Kiosks are an amazing opportunity to put product in the market with relatively stable profit results. The one product I would not be surprised to see soon is prepaid phones for travelers. This would work well in airports and hotel/motels in both vacation resort areas as well as well known business locations. Placing them with other electronic travel needs should get a positive revenue started soon.
As kiosks get more technologically advanced, the categories they can participate in are endless. The model of convenience, profits and impulse is compelling.
Fifteen years ago I evaluated a kiosk that made ready-to-order french fries. It took whole potatoes, cut them, dropped them in oil, then dispensed them in a paper serving dish for customer consumption. Why not have one for fresh organic milk — bring a reusable glass container to fill?
Has anyone seen the new Coke kiosk at Wegmans and Chik-fil-A? It offers about 20 varieties of fountain soda and other Coke products!