Magazine Article | April 1, 2000

Retail Revolution: Active Kiosks

Source: Innovative Retail Technologies

With wireless connectivity, Internet browsers, and multimedia software, these are not your traditional kiosks. Compaq promises to transform retail expectations of kiosks with its new "active" kiosks line.

Integrated Solutions For Retailers, April 2000
One of the ultimate goals of science fiction has always been an artificially created human counterpart. From the dreamer's psyche, the goal has become a motif in both film and literature. It began with Dr. Frankenstein's creation, moved to the "Danger, danger Will Robinson" robot in "Lost In Space," gravitated toward Sigourney Weaver's android cohort "Bishop" in the "Alien" trilogy, and was most recently portrayed in Robin Williams' film, "Millennium Man." Human beings won't stop dreaming until they have machines with capabilities that rival their own.

The perfect android isn't here yet, but incremental improvements in technology are bringing us closer. The most recent step toward that goal is now taking place in the retail industry. Compaq has just announced the development of new "active" kiosks that promise to change the way many retailers do business. But, you may ask, what human segment could kiosks replace? Try the pimply-faced teenage salespeople you often find in retail stores. Unlike the cosmetic kiosks of the past, active kiosks offer automated features that can replace not only POS stations, but also the labor behind them.

Retail Research Uncovers Huge Opportunity
The idea of active kiosks originated in Compaq's retail research division last fall. While assembling a picture of the retail market, the company's research division concocted the idea for the new retail tool. Specifically, researchers noted technology trends in the retail market and combined that knowledge with the existing kiosk offerings of the last decade. The resulting idea: active kiosks.

"We stepped into a business opportunity that is starving for new technology," comments Jim Newton, manager of systems software engineering at Compaq. "Kiosks have always been a good tool; but traditionally, the technology has not been there to support them. We feel the technology has finally caught up with the kiosk concept. That's the premise behind this solution: producing a kiosk with the technology that lives up to its intentions."

Unlike stand-alone kiosks, which have populated retail stores for years, the new active kiosks offer retailers more pragmatic features. Old kiosks retained an internal database that, at best, provided customers with limited information and options. Active kiosks offer customers Web access, online customer service, and order placement and fulfillment. And, that doesn't even include the new offerings for retailers: data mining, market research and demographics, in-store promotions, increased product offerings, and connecting kiosk information to the back end. Ultimately, all these features should translate into increased retail sales for the companies that use the technology effectively.

The Active Kiosk: A Blueprint For Success
With the help of several project managers, about a dozen engineers, and various solutions providers, Newton has been responsible for making the new kiosks a reality. He has pulled together a number of vendors. Cabinetmakers Nassal of Orlando, FL, and Factura of Rochester, NY, will be providing customized and standard cabinets, respectively. TradeMart (Buena Park, CA) and TouchVision (Seal Beach, CA) will be providing content for the kiosks. Nortel (Brampton, Ontario) will handle many of the connectivity issues for the active kiosks. Compaq itself will be providing the flat touch screen technology and other components. Atalla, a subsidiary of Compaq, will handle security for the kiosks.

Newton expects the cabinets to cost about $4,000 and says Compaq will offer the option of buying or leasing the units. That cost entails hardware, but does not include service and support. That option will be offered as an additional, customizable choice in a strategy that Compaq has labeled "worldwide service and support." Effectively, the units are built to customer specifications and then used in retail locations. Because the kiosks operate with wireless technology, they can be seamlessly connected to a store's LAN (local area network). That option should be attractive to retailers, particularly those with chain stores that would otherwise require a cumbersome, wire-based installation.

Additionally, Compaq is remaining sensitive to the specific needs of each retailer. "The retailers want to make these cabinets part of their physical retail culture," notes Brent Brown, manager of in-store solutions at Compaq. "We offer solid, uniform solutions with the kiosks, but we also offer a customizable wrapper. For some retailers, that is very important. They need to integrate solutions that are physically consistent with the store environment."

Retail Giants Roll Out Solution
So far, the kiosks have only officially been rolled out for one customer: Cinemark, which operates the well-known chain of Tinseltown movie theaters. Additionally, Compaq is in the process of developing kiosks for fast food industry giant McDonald's, and retailers the GAP, Borders Books, Office Depot, Home Depot, the Limited, and Victoria's Secret.

"You wouldn't believe the amount of interest we've had so far," laughs Newton. "We won't make the official announcement for the active kiosks until the Retail Systems show (April 16-19), which is held in Chicago. That hasn't stopped people from calling us, though. Somehow, everyone's heard about the new offering - and no one wants to be left out."

Most retailers want the kiosks in their stores as soon as possible. Because of this, many are immediately launching the product by simply allowing access to their Web sites at the kiosks. This phenomenon has become widespread among Compaq's initial clients, which Newton is referring to as "Phase 1." "Phase 2" is more complex. It involves e-mail capabilities, establishing communication between stores and headquarters, and tying the kiosks into back end systems.

Using Kiosks In A Retail Environment
The rollout for Cinemark Theatres took place in March and involved 14 theatres in the Dallas area. Each theatre will house five or six kiosks. The units should allow movie-goers to forgo sell-out shows and long lines. Customers will choose movies and times at the kiosk and then purchase tickets with the aid of swipe-card technology. Eventually, the kiosks will even include movie previews and will allow customers to purchase tickets on the phone and pick them up before the show.

The offerings for other retail industry segments are similar. Stores that cater to small children can have Internet access and video game kiosks. You're bound to keep children's attention and parents' business longer if you have a Pokeman video game. Also, imagine sitting down at a fast food restaurant, ordering your food on a kiosk screen, and then checking your e-mail while you wait for your food to arrive. Stores like Borders Books will be able to offer preview video clips from movies, gift recommendations, and book reviews – in the store. If one GAP store doesn't carry an item you want, the active kiosk will surely be able to tell you which location does. The kiosks will, without doubt, be powerful tools for retailers.

Retailers Benefit From Active Kiosks
Compaq doesn't plan on stopping with its current kiosk offerings. There are plans to include inventory control features, as well as handheld wireless devices to increase the efficiency and productivity of the kiosks.

For now, however, the active kiosk concept seems to be an ideal union of brick-and-mortar and click-and-mortar retailing. Unlike completely Web-based ventures, the kiosks do not require traditional retailers to delve into what can be very unfamiliar waters. More importantly, though, the kiosks bring the Internet to the medium that most shoppers are comfortable with: the physical store. Many shoppers are still distrustful of Internet shopping. Oftentimes customers will still follow Web orders with phone calls, incredulous that someone is lurking behind the browser. The kiosks offer those distrustful shoppers an easier transition between a physical and virtual shopping environment.

At any rate, the kiosks themselves will change the face of retailing. At the same time, the kiosks promise to be a dynamic force in the Internet phenomenon. Retailers that want to keep pace with industry trends should take note of the new kiosk technology. Unquestionably, you'll find yourself using a kiosk in the near future. It's just a question of whether you'll be using it to shop, or sell.

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