In-store technology is expected to get a boost in 2000 when retailers say they will be using more kiosks to connect consumers to the Internet, according to industry observers.
When it rolls out its new Web site next year, Bentonville, Ark.-based Wal-Mart aims to have kiosks that connect its site in "a majority of stores," according to an official for the discounter. "[Then], those who don't have computers at home can access the Web site," the official said.
The demographics of the shoppers at the Wal-Mart stores selected are ideal, because they "don't necessarily have Internet access," said Alice Richter, director of food and beverage practice at Montvale, NJ-based consultant firm KPMG. A visit to the local grocery store is a "trip to entertainment" for those shoppers, Richter added.
Wal-Mart is already testing kiosks in various departments in about 45 stores. The primary function of the kiosks in the electronics department is to sell computers and computer accessories. So far, the kiosks have not been added to the grocery sections of Wal-Mart supercenters.
Meanwhile, The Kroger Co. in Cincinnati, Ohio, Albertson's in Boise, Id., Mega Mart in Oak Creek, Wis., and Hannaford Brothers in Scarborough, Maine, are all testing kiosks in a few stores.
Kiosks linked to the Web are expected to drive new traffic to the stores, as well as boost spending and service for new and existing customers.
Nongrocers already implementing Net-capable kiosks are enhancing their customer service. Kiosks in The Gap stores, for example, allow shoppers who cannot find the size or exact item they would like in the stores to log on to the retailer's Web site and order the items they need.
Net access via kiosks -- rather than just computer terminals for shoppers to surf the Net -- is advantageous because retailers can tailor information to the store. "The strength is in combining both in-store data and external data," said one source.
"Most retailers have seen a hard line between off-line and on-line purchases, but they aren't mutually exclusive," adds Peter Mackey, president of Digital Idea, a Westport, Conn.-based interactive consulting firm. "We're looking forward to the future...an eventual integration of offline and on-line purchasing," Mackey said.
In the future, more supermarkets will feature "cybercafes," featuring touchscreen kiosks with Web connectivity, according to industry observers. ASDA in the United Kingdom, for example, is working with TownPages, which provides free on-line information, to add kiosks in its stores. TownPages' site allows shoppers to access local government, entertainment, travel, weather and other news.
When setting up in-store cybercafes, retailers should allow access to other Web sites besides their own, according to Mackey, otherwise, "consumers will rebel." "The trick is to build aspects of your presence that invite more loyalty than if they were to leave that presence and go to the Internet," he said. But grocery stores using kiosks linked to their Web sites are unusual.
Albertson's new Albertson.com store in Bellevue, Wash., is perhaps the most well-known example. A kiosk in the store's Reading Center links to Albertson's Web site and allows shoppers to place their order on the touch screen, then shop the rest of the store while their sandwich or other meal is being prepared. Shoppers' orders can be picked up at the store, or delivered to them later. Meanwhile, the kiosk in the store's beer and wine section primarily serves as an educational tool, advising shoppers on the best type of wine for their meal, listing that store's liquor products selection and updating promotions daily. The kiosks at Albertsons.com, however, are just a test, according to KPMG's Richter. "Albertson's is pretty excited about the Internet and kiosks, but the changes they've made are pretty easy to undo. They don't know if it [a chain-wide commitment] will happen in six or 18 months, or ever come to fruition," according to a source familiar with the project.
At the same time, the chain announced that the Bellevue store is the first in a series of dot-com stores the company plans to open over the next few years in the Seattle area. In the future, customers ordering on-line will also be able to donate with local charities with a "Click and Give" program. Other applications for kiosks that are now being tested in grocery stores include speeding up film processing orders and tracking loyalty cardholders' interests. "It is not just a place to make a purchase, it's a place to capture some information about the buyer," Mackey said. More retailers are using the captured data to personalize the shoppers' experience on the kiosk, he added.
Increased use of loyalty-card data -- expected throughout 2000 -- will also make couponing via kiosks more popular. "What will make it a more widespread application is when the information about who I am, what I've purchased, has been collected in the system," Mackey said. The key is to communicate promotions with the shoppers who are interested in that type of product, instead of mass mailings.
Despite many positives, the kiosks are not expected to work for every retailer in every store. Retailers should decide whether they want to use kiosks for business-to-business, business-to-consumer or business-to-employee applications, according to Richter. One supermarket chain which has not tested kiosks in its stores is instead using kiosks to give employees information on their 401K plan and other items. "If they can get their workforce used to using it, they can get feedback from them and see what works well," Richter said.
Once retailers target their kiosk strategy, they must get the "rest of the supply chain to tie into it," Richter said.
