Retail e-commerce’s reality is settling in: Multichannel e-tailers have distinct advantages over pure-play competitors.
Multichannel e-tailers are expertly accentuating the positives by marketing their dot-com sites through existing print, television and in-store advertising, while leveraging their existing merchandising skills and product assortment, and providing convenience by accepting online returns in the bricks-and-mortar store.
One unique opportunity more multichannel retailers are taking advantage of is linking the Internet and bricks-and-mortar stores via in-store kiosks.
In-store kiosks can serve multiple purposes, including giving consumers access to a variety of products and/or services in the store environment, enabling consumers to ship items directly to their home or work and providing interactive gift registries.
Retailers including Kmart, REI, Wal-Mart and Service Merchandise are testing or implementing kiosk programs to assess potential consumer and financial benefits. Success of a kiosk, however, is not proved. Challenges include keeping the machines operating, tailoring the Web site to a kiosk interface (and/or designing a new interface) and maintaining consumer interest and relevance.
Here are some important kiosk-related issues to consider:
Enhance the in-store experience.
A kiosk can enhance the in-store experience by expanding product selection (including making exclusively online products, such as Gap’s maternity line, available in the store environment) and services (such as credit card applications, loyalty programs and wedding registries).
BlueLight.com is rolling out kiosks to its entire Kmart store base. It has multiple kiosks in the customer service and electronics area in each store. The company plans to have mobile kiosks in the future.
One of BlueLight’s primary goals is to alleviate Kmart’s incessant out-of-stock situation, as well as to broaden each store’s existing product selection.
Adding another layer of convenience, items can be ordered at the kiosk and shipped directly to a consumer’s home. This is especially attractive for bulky and heavy items.
A kiosk also provides information.
Information benefits both the sales staff, which can rely on the kiosk as a sales tool, as well as the consumer.
Technical products, such as computers, electronics and some outdoor/athletic products, clearly derive the greatest benefit from a kiosk. As a result, it is not surprising that retailers such as Best Buy, Staples and REI have been aggressive with testing and implementing kiosks.
The financial benefits can be bright.
Though the upfront kiosk investment can be substantial (price ranges vary depending on infrastructure needs such as whether chains need to “broadband enable” individual stores, revamp back-end systems and/or train personnel), the potential future financial benefits are attractive.
Not only does a kiosk boost sales by widening product selection and providing a solution to out-of-stock issues, but it also provides balance sheet benefits. For example, the store can maximize valuable shelf space by merchandising the bulky, slow-turning items on the kiosk and not in the store, effectively reducing inventory-carrying costs.
Lastly, the kiosk saves people expense, as sales clerks use it as a training tool and/or consumers can look up product information without assistance. Lids.com has found that its kiosks help retain employees; store clerks feel empowered as they learn and operate in-store technology.
But it does not always work.
A kiosk does not work for every retailer. Here are some basic checklist questions:
Does a kiosk mesh with store decor? Unless appropriately designed, kiosks do not complement a high-end luxury store such as Saks Fifth Avenue or Neiman Marcus.
Do consumers shop online? If not, consumers might be uncomfortable with the interface and not stop to use a kiosk. Ames had a disastrous kiosk test. Few customers used the now-defunct kiosk, primarily because they did not have or typically use computers.
Can it be integrated into existing infrastructure and systems? Clearly, the kiosk should be integrated to enhance personalization so that a retailer knows when a consumer shops in the store, online, from a catalog or at a kiosk.
And as mentioned, does a kiosk really benefit the store’s existing product selection? For example, a grocery store, where consumers typically look for immediate gratification, does not need a kiosk as much as an electronics retailer.
A kiosk’s interface typically needs to be designed differently than a Web site. Content needs to be streamlined so customers do not have extended sessions. The interface needs to be expressed in a large font, one that is extremely clear and basic, so that even the clumsiest customers can quickly and efficiently navigate on their own.
In the future, successful multichannel retailers will seamlessly blend the consumer experience across every point of contact. The Internet will clearly be an essential piece of this, both in-store, on the phone and at home.
For select clicks-and-mortar retailers, a kiosk will complement this multichannel offering and will evolve to provide an even more personalized, relevant and interactive consumer experience.
• Barrett LaMothe Ladd is a senior retail analyst at Gomez Inc., Waltham, MA. Reach her at [email protected]