Manufacturers are using in-store kiosks to connect their brands with consumers who are most likely to want them.
Kiosks may not have universal appeal, but they are catching on with shoppers who are comfortable using the machines to get special offers, recipes and product information. The technology gives marketers another tool for reaching shoppers when they're shopping and are more receptive to offers.
Loyalty card kiosks are becoming more widely used by traditional consumer packaged goods companies.
Xander Shapiro, senior brand manager with Del Monte, likes the kiosks for a number of reasons, not the least being that the software lets marketers winnow the pool of consumers down to those who are likely buyers, based on their previous shopping patterns. “Kiosks can create a market basket for you of typical shoppers you'd like to reach,” he said. “You always want consumers who want your offers to get your offers.”
San Francisco-based Del Monte Foods Co. used loyalty card kiosks in hundreds of supermarkets to promote its Fruit Naturals and Orchard Select products, carried in the fresh produce departments.
To encourage people to try the items, Del Monte targeted shoppers who, judging from their purchasing history, seemed like potential buyers. Working with Concept Shopping, a Lisle, Ill.-based marketing firm, Del Monte pursued consumers who, based on their loyalty card data, had purchased premium bottled juices in the last six months. The promotion took place in 800 supermarkets over a four-month period in 2006 and 2007. Shoppers swiped their loyalty cards at the kiosks to get printed discounts. Those who had purchased the juices more frequently got cents-off deals that were lower in value than the offers to shoppers who had purchased the drinks less frequently.
“You can't do any of these things with coupons in the Sunday paper,” said Shapiro.
Cadbury Schweppes Americas Beverages has worked with kiosk vendors on promotions tied to loyalty cards, including a Diet 7-Up campaign. After reformulating the soft drink, CSAB courted existing Diet 7-Up drinkers and potential new buyers with personalized offers. Working with Concept Shopping, the manufacturer ran a promotion in Chicago-area supermarkets. Shoppers, identified through loyalty card data, got offers via in-store kiosks and the Internet. According to one report, the campaign reached 38,000 households and delivered better-than-expected redemption.
CSAB declined to comment specifically on its future plans, but a spokesman for the Plano, Texas-based company said CSAB is working with a kiosk vendor to test various “options.”
“We're taking a look at them and determining the best way to use them,” the spokesman said.
Along with offers tied to loyalty card data, manufacturers are using kiosks to reach shoppers who are less inclined than their parents and grandparents were to clip and redeem the coupons stuffed in the Sunday newspapers or in direct mailings.
Millions of people look at the coupons in the Sunday papers, so they can raise awareness of a manufacturer's product even if they don't prompt an immediate purchase. While there's a definite audience for paper coupons delivered through newspapers and direct mail, there are also plenty of consumers who see little value in them.
“Some people look at it as junk mail,” Shapiro noted.
On the other hand, kiosk offers reach a much smaller pool of shoppers who consciously choose to get the offers and are more likely to take advantage of them. Shapiro said marketers see up to 15% redemption on kiosk offers vs. 1% to 2% redemption of coupons from the newspapers.
Indeed, shoppers who take the time to print out offers from the loyalty card kiosks at Dorothy Lane Markets tend to redeem them. Since installing the machines near the store entrances in July 2007, the upscale Dayton, Ohio-based chain has seen the number of shoppers using the kiosks grow steadily.
DLM's kiosk offers are identical to the offers Club DLM members get via email. Dorothy Lane mainly uses kiosks to promote its private-label products as part of the retailer's loyalty program. Down the road, the company may work with outside manufacturers to promote their products on the kiosks, said Amy Brinkmoeller, director of information services for the three-store independent.
Consumer use “is continuing to grow,” said Brinkmoeller. “For people who visit the kiosk, 80% of them do redeem an offer off the kiosk.”
Of course, kiosks have obvious limitations. Marketers have to be careful working with loyalty card data, or they'll end up setting consumer parameters for offers that are too narrow to be fruitful. “If you target too much, you'll get three people,” Shapiro said.
Furthermore, consumers with supermarket loyalty cards are the only ones who can get offers from loyalty card kiosks. “People who won't be getting these targeted offers are those that have not signed up for” the retailer's loyalty program, said Lee Holman, lead retail analyst for the IHL Group, a Franklin, Tenn.-based research and advisory firm that focuses on technology applications in the retail setting. “Whose wallet do you want to tap into? The customer you know vs. the customer you don't know?”
Signs seem to indicate brand marketers will make greater use of kiosks and related technology, especially as the machines proliferate in more stores. Worldwide, nearly 40% of all kiosks are in retail stores, the fastest-growing venue for the machines, according to Summit Research Associates, Rockville, Md.
Hass Avocados from Mexico will run a Cinco de Mayo promotion using, for the first time, the 800 ShoptoCook kiosks deployed in more than 200 supermarkets. One target market is Charlotte, N.C., home to Cantina 1511, a popular Mexican restaurant. Shoppers who visit the Bloom stores, operated by Food Lion, will be able to access recipes from Cantina 1511 on the kiosks. Avocado marketers are courting Anglo and Hispanic women between the ages of 25 and 54 with recipes and pictures of dishes from the Mexican restaurant. They plan to post the content on kiosks in the weeks leading up to the May 5 Mexican holiday.
“Today it's becoming more and more difficult for a manufacturer to get exposure at the retail level,” said Chris Tully, president of the Preston/Tully Group, a Garden City, N.Y.-based integrated marketing company that represents the Mexican Hass Avocado Importers Association. “One of the nice things about kiosks is you're guaranteed placement within a retail environment. The fact that these kiosks are in the stores, they help stimulate impulse purchases and build awareness of your product within a retail environment.”
Along with Super Bowl Sunday, Cinco de Mayo is a leading holiday for avocado consumption. The avocado importers' group has conducted Cinco de Mayo promotions in previous years, but not using the kiosks. Kiosk recipe promotions can bring in double-digit lifts in sales, Tully said, and offer advantages over other promotional vehicles. Unlike in-store radio, which shoppers can tune out, kiosks reach consumers who already are receptive to using the product. Unlike printed promotional materials, the creative content on kiosks can be changed quickly, Tully said.
“Logistically, they're easier to execute,” he said. “You're assured [recipes] will be available to consumers. With displays, the best-laid plans don't always work out. Sometimes you're at the mercy of the retailer or broker.”
The avocado marketers plan to raise the Hass brand presence by teaming up with recipe kiosk providers in other markets to create new promotions that focus on key holidays, he said. The importers' association targets shoppers in markets east of the Mississippi, where familiarity with avocados tends to be lower than in the Western states.
Kiosk vendors said they're working with more manufacturers and retailers on pilot programs and promotions. Recipe kiosk vendor ShoptoCook recently partnered with the Readers Digest Association in an agreement that makes RDA the exclusive provider of recipes and other food-related content on the kiosks. RDA also will sell advertising space and incorporate advertisers' products into the featured recipes. “Readers Digest is bringing manufacturers into our network,” said Frank Beurskens, chief executive officer of ShoptoCook, Buffalo, N.Y.
Kroger and Stop & Shop are among the retail chains working with Tactical Retailing Solutions/Entry Point Communications to test kiosk and handheld self-checkout technology that will provide shoppers with personalized offers. The tests will take place in selected stores.
Advances in technology have made kiosks easier and faster to use. Ease of use should pave the way for growth, said Carlos Erban, vice president of customer marketing for Tactical Retailing Solutions/Entry Point Communications, based in Hartford, Conn. “The most important thing is, [kiosks] don't require any interaction,” he said. “In the past, some kiosks that failed were the ones that required interaction.”
The user-friendly technology appeals to shoppers looking for deals. Unlike coupons delivered to homes, the offers generated by kiosks in supermarkets are convenient to use.