The Time is Right for Self-Service Kiosks

This article is brought to you by Retail Technology Review: The Time is Right for Self-Service Kiosks.

Self-service ordering kiosks have been in use for more than four years. The reasons for their staying power are many, but the bottom-line is that kiosks please both c-stores and their customers. Can you imagine being able to take multiple orders, simultaneously? That's where the fun begins.

Demystification
Self-service ordering kiosks are computerized touch pads that enable customers to order made-to-order sandwiches more efficiently than by speaking with a counterperson. The system is simple to use and offers custom choices. If the buyer desires extra mayonnaise, the sandwich can be ordered as such. In a typical c-store, customers begin at the ordering kiosk, walk throughout the store to shop for additional items, pick-up the sandwich and end at the cashier.

Convenience store chains like Wawa and Sheetz have been using self-service kiosks for their foodservice programs for years with extraordinary success, and chains like Rutter's Farm Stores and White Hen Pantry have since followed suit.

But kiosk technology took some knocks in the beginning with detractors claiming that stereotypical ancient Aunt Edith couldn't possibly adapt to using the newfangled gizmos. There were also reliability questions in the beginning. Certainly the technology took its lumps, but ATM machines softened the blows. John Saccomanno, director of industry marketing for NCR Corp. (www.ncr.com), a leading developer and manufacturer of self-service technology, refers to ATMs as the "Garden of Eden," for self-service technology. He says that ATMs, "had a lot to do with reducing people's resistance to self-service technology."

More recently, supermarket shoppers use self-service checkout kiosks, gas-buyers pay-at-the-pump, airline passenger's check-in at self-service kiosks and business traveler's check-out using hotel kiosks.

Today, the reliability issues have been addressed, and the general population has become computer savvy. The result is the overwhelming majority of customers consider kiosks to offer a superior ordering process compared to the old way.

There are also multiple benefits on the store-side. It doesn't matter if you have a high-end store getting higher margins or if you have a bare bones store making pennies on the dollar, you must be operationally efficient. Self-service ordering kiosks enable efficiency while providing an attractive return on investment (ROI).

The Benefits to Customers
The very nature of self-service ordering kiosks compels them to meet specific consumer expectations:

Privacy
Consumers appreciate not having to shout their order out so everyone can hear. Kiosks remove their potential embarrassment.

Speed
Kiosks give consumers proactive confidence. Everyone has experienced the dreadful wait at a deli counter either trying to get the attention of someone behind a counter or waiting for a number to be called. Kiosks remove all that unnecessary anxiety.

Convenience
Consumers don't need to be computer savvy, because kiosks don't require any particular training or intelligence to use. In fact, many people are more comfortable interfacing with technology than they are talking face-to-face with an order clerk.

Communication
Whether the cause is a language barrier or the din in the store, kiosks can't misunderstand an order. This enhances the shopping experience for consumers because they never feel the frustration of not being able to communicate their needs.

Precision
The consumer gets exactly what they order. The touch pad all but ensures their needs will be met.

The Benefits to Storeowners
Storeowners and managers enjoy two main benefits from kiosk deployments.-First, they can use kiosks as a tool to streamline their operation. Second, they realize an ROI in a reasonable period of time. Upon closer inspection, their benefits are many:

Productivity
Kiosks enable sandwich makers to maximize productivity by limiting time previously spent in conversation and data entry. Multiple kiosks can take orders simultaneously. From the store's point-of view, this is the most important reason to deploy the technology.

Ordering accuracy
The complaint, "This is not what I ordered," is virtually never heard. There is a small margin for human error, but it is dramatically diminished compared to the potential for error before kiosks.

Ease in hiring
Remember the days when the person who made the sandwiches also had to have "people skills?" Now, employers can hire someone who can make a sandwich quickly and everyone is happy.

Up-selling
The kiosk will offer up-sell choices to customers more frequently than the average counterperson. For the counterperson, up-selling is a learned behavior. For the computer it is automatic.

Inventory tracking
More advanced systems can provide the store with reports on inventory and worker productivity. Some systems can monitor individual employee performance.

ROI
A typical ROI calculation is fairly simple: Ordering man-hours-saved (described in dollars per month), plus increase in sales (described in dollars per month), divided by cost of system equals the number of months to break even.

Although results may vary based on the cost of the system and the volume of sales, many c-stores can realize break-even in 8 to 12 months. By the second year, the system can operate in profit.

The Survey Says
Since this technology is recent to 2002, there are few empirical studies available to statistically quantify results. However, companies and publications have conducted surveys that have yielded a preponderance of anecdotal evidence to support the claim that self-service kiosks are a hit.

One such survey predicted that kiosk deployment would increase from 397,000 in 2003, to 738,000 by 2007. That same survey noted that a majority of respondents (all industry professionals) rated both "Customer Service" and "Revenue Generation" as the two most important benefits of kiosks.

NCR has conducted research to determine the market's willingness to continue to adopt the technology. For example, in a 2004 to 2005 survey of owners who already used kiosks, 15% described them as being vital, 53% described them as being "very beneficial, 30% described them as being "somewhat beneficial" and only 1% said they were "not beneficial."

Perception vs. Reality
An interesting sidebar to the story has to do with customer perception. It seems that customers feel they are getting faster service when in reality they aren't. The difference is that they can place the order quickly and then are free to go around the store shopping for other items while their order is being filled. The mere fact that their time is being occupied by a task other than waiting impatiently creates the illusion that service is faster.

Whatever the perception, the reality is retailers are embracing self-service ordering kiosks as an integral component of their present and future profit motives, and their customers approve.