LUND SHOWING KIOSKS CAN WORK

EDINA, Minn. -- Dennis McCoy's job at Lund Food Holdings here is to make sure that kiosks used at the company's stores do not become "the big box in the corner of the store with a sign saying 'out of order."'That's the fate that many kiosks in supermarkets have been relegated to, said McCoy, kiosk project manager. But it's one that Lund Food Holdings, operators of eight Lunds stores and 12 Byerly's

EDINA, Minn. -- Dennis McCoy's job at Lund Food Holdings here is to make sure that kiosks used at the company's stores do not become "the big box in the corner of the store with a sign saying 'out of order."'

That's the fate that many kiosks in supermarkets have been relegated to, said McCoy, kiosk project manager. But it's one that Lund Food Holdings, operators of eight Lunds stores and 12 Byerly's outlets, is determined not to suffer.

Indeed, since the fall of 2000, Lund has embarked on one of the more ambitious kiosk programs in the food retail industry. As described by McCoy at GEMCON (Global Electronic Marketing Conference) 2003 last month in Lake Buena Vista, Fla., the company now operates six different kiosks to varying degrees at the organization's upscale supermarkets. Kiosks represent "an extension of our brand," said McCoy, adding, "For us, brand is everything."

The most successful kiosk is the Sony Digital Picture Station, which converts images from digital cameras into prints; Lund began installing them late last year and now has them at all 20 outlets. Next is the "Living Wise" Healthnotes kiosk, which offers health and lifestyle information. These units are installed in the whole-health section at eight stores, including both store formats.

Lund also stations a deli-ordering kiosk in two Byerly's stores; a front-end culinary/recipe kiosk at two Byerly's stores (with another planned for the meat department of a Byerly's store); a cheese information kiosk in a Lund's store in Plymouth, Minn.; and the latest kiosk, dedicated to bakery cake ordering, which was installed at the Ridgedale Byerly's (Minnetonka, Minn.) last June. Lund supplemented that kiosk by adding cake ordering to its Web site in September.

But not every kiosk project at Lund stores has been a success. McCoy described two instances where kiosk applications proved not to be "value-added."

One was a wine/spirits kiosk, which was tested in a few stores. Shoppers would scan a bottle of wine, and information would appear on the wine's vintage and the food it goes with, and recipes would be printed. The problem was that it wasn't enough. "Our customers are used to sensational service," he said. "The wine/spirits kiosk did not promote the degree of support they were looking for. They still wanted to talk to a specialist."

Another kiosk that flopped was a touchscreen product locator, which told shoppers which aisle and section they could find, say, mustard. That also fell short of expectations. "Customers want to know where they could find a specific SKU," McCoy said.

With his experience in kiosk implementation, McCoy offered numerous pieces of advice:

It's all about leadership, he said. "You can't just throw a kiosk into the store. You've got to have employees embrace it." To that end, getting feedback from employees, as well as from customers, is key.

Keep it fresh. A successful kiosk program requires "a vision for new services," said McCoy. Stores need to constantly revise the program based on customers' responses.

Keep them running. Lund is committed to hardware and software reliability, checking the operational status of its kiosks daily. Vendors are expected to respond rapidly to outages. Prolonged outages are "unacceptable," he said. Apart from Sony print stations, NCR supplies all kiosk hardware; software is supplied by ADUSA Technologies (deli kiosk), Healthnotes (Living Wise kiosk) and NCR (others).

Consider centralized file maintenance. Lund employs a WAN (wide area network) to quickly move data from store kiosks to a central database at headquarters.

Provide compelling marketing support. This includes attention-drawing signage at the kiosk location. Lund used promotional bag stuffers for free prints to promote the Picture Station.

Offer kiosks to enhance the level of service, not replace it. Lund would never install multiple deli kiosks, for example, to drive deli business through the kiosks rather than the service counter.

Consider different locations for kiosks. Putting the Picture Station near ATMs at service counters suggested to shoppers that it was "another self-service function with time savings," said McCoy. Lund experimented with the picture kiosk on top of a newspaper stand to improve its visibility.