Retail Multi-Function Transactional Kiosks: Create Compelling In-Store Experiences

Introduction
Source Technologies creates innovative, flexible solutions that give companies the power to control transactions, disbursements, and other secure business processes through dynamic printer, software, and self-service solutions.

Founded in 1986, Charlotte, N.C.-based Source Technologies develops groundbreaking self-service kiosk hardware solutions and software platforms that enable retailers, financial institutions and governments to automate in-person business transactions.  In the retail environment, self-service kiosks increase staff productivity and decrease the retailer’s costs while providing quality, consistent, and branded personal service to customers.

Source Technologies is also the leading provider of magnetic ink character recognition (MICR) printing solutions and consumables for check printing and other secure document applications, plus payment software applications for secure, distributed print management.  Customers include FORTUNE 1000 and financial institutions of all sizes, including nine of the Top 10 U.S. banks.

We have produced this white paper for retailers to gain an understanding of how the proven multi-function kiosk hardware and software platform from Source Technologies not only automates revenue-generating retail processes but can also drive traffic into retail stores.  Once that traffic is in the store, these kiosks can help retailers convert them to incremental revenue.  With so much competition, from other bricks and mortar stores as well as online destinations, getting more customers into the store is a challenge for all retailers addressable through the implementation of multi-function kiosks.

Today’s Retail Sector Landscape
The economic landscape changed considerably, to the point that retailers and consumers alike are still defining the new reality of consumerism.  Shrinking credit availability reduced consumers’ ability to buy and a shaky jobs and housing outlook reduced disposable income.  The consumer also questioned the value of acquisition for the sake of acquisition.  Rather than purchasing items for the sake of “keeping up with the Joneses”, consumers today must be compelled to spend by an experience that matches their newfound desire to simplify their life.

Meanwhile, retailers have been wrestling for years with the challenge of defining their bricks-and-mortar value proposition with consumers given the proliferation of available options in terms of competing retail locations and the vast universe of shopping accessible online.  However, according to Retail Traffic Magazine, on any given Saturday or Sunday between the hours of noon and 2 p.m. almost 12% of the U.S. population is shopping in a retail store.  With a robust selection of options from which to choose, retailers must create an environment that ensures consumers enter their store when they do go real-world shopping.

Finally, retailers face the ultimate challenge of accomplishing more strategic goals with fewer resources.  Retail margins are generally slim, especially in some categories such as grocery.  Increased competition and the current economic malaise have led to discounting, reducing margins even further.  This leaves minimal resources left over after overhead for providing the superior customer service necessary to win consumers’ business.

Strategic Approach
Retailers cannot be content to sit on the sidelines and let these issues define their strategic approach to achieving financial goals.  The increasing ability of consumers to choose how, where and when they interact with businesses — and the ability of companies to satisfy these preferences — is a strategic imperative for retailers today.  The retailers that thrive through this evolution will be the ones that engage shoppers with their brand in a meaningful way, inside and outside the store, while offering superior customer service.  Consumers are responding to a retail experience that gives them the flexibility to interact easily via online, bricks-and-mortar, and self-service channels.  Consumers differentiate between retailers that offer them these capabilities and ones that do not, with a substantiated preference for the retailers than enable these connections. 

Retailers must continue to excel at customer service while deploying the tools that enable cross-channel interaction.  As the age-old adage goes, one can never underestimate the power of customer service.  A recent study from the National Retail Federation in partnership with American Express emphasized this when it highlighted the retailers with the highest customer service as rated by their 8,526 survey respondents.  The highest-ranking retailers are also the highest performing in their sector.  Of interest is that seven of the eleven companies on the list (a top ten list, but two companies tied for one of the ten places) do not have retail stores.  Fierce competition for the consumer’s dollar requires retailers to tailor the in-store experience to the brand message while enabling cross-channel interaction and exceeding customer service expectations.  The bar has been set high!

Multi-Function Transactional Kiosks
Square footage is a valuable commodity that retailers aren’t typically willing to give up for anything but the most effective solutions.  Technology solutions deployed must provide a significant utility to consumers and allow retailers to realize a positive return on their investment quickly.  Retailers are looking to combined self-service technologies offering various functionalities on a single device, thereby making the best possible use of the valuable square footage and the capital expenditure required to implement a kiosk project.  Gone are the days of a single application running on a kiosk – running multiple applications on the device shortens the ROI cycle and better leverages the retailer’s technology investment.  These functions and many more can co-exist on one efficient, powerful device.  Multi-function transactional kiosks offer more advantages; they also can help organizations streamline operations, increase foot traffic, educate customers and explore new revenue streams.

With retail kiosks becoming more common, consumers and retailers expect more from them.  Self-service technology has continued to evolve from when it first hit the scene, enabling singular activities such as price checking.  While those first-generation deployments were a great start and introduced consumers to the idea of taking charge of their interactions with retailers, perceptive retailers quickly saw the need to utilize these infrastructure investments for a broader array of applications.  Today’s next-generation, multi-function transactional kiosks feature powerful processors that react nimbly to the consumer’s requests and eye-popping graphics capabilities designed to catch and maintain consumer’s interest as they interact with the devices.

Among the many tools available in today’s modern cache, multi-function transactional kiosks stand alone in the value proposition of benefits and simultaneous cost reduction they offer.  In-store, multi-function transactional kiosks allow consumers to engage with the retailer in a self-guided manner through an experience that is always consistent and branded.  By offering value-added services through these kiosks, retailers can capture and retain consumer’s interest, offering them a compelling reason to visit the store.  Multi-function transactional kiosks perform customer interactions in a consistent and branded manner.  They do not have a bad day, and they do not call in sick for work.

What Are They?
It is most helpful to parse the term “multi-function transactional kiosks” to understand what they are.  There are many kiosks available today, and with the interest in self-service, it is safe to assume that many new kiosks will be available to retailers in the future.  Not all kiosks support multiple functions, or applications.  In fact, the vast majority of early kiosk installations were designed to support one application only, and generally, that was price checking. 

Multi-Function Kiosks
Multi-function kiosks provide retailers the ability to run multiple applications, or perform more than one function, on the kiosk.  To accomplish this, the kiosk must have a certain level of flexibility in terms of configuration.  For example, some retailers might want to use the kiosk for loyalty account creation and management as well as layaway.  This multi-function kiosk would need to accommodate the loyalty account application using appropriate peripherals such as bar code scanners and a keyboard.  The kiosk must also support the peripherals that are appropriate for layaway, which may include a credit/debit card reader, PIN pad, cash and check acceptors.  With multi-function kiosks, the point is that they are not limited in the applications they can support by their lack of adaptability with respect to peripherals, connectivity, and processing power.

The types of applications that multi-function kiosks can support are limitless, defined by each retailer’s customer demographics, merchandising offering and pain points.  It behooves the retailer to question the selected kiosk’s functionality.  Many retailers today have a significant installed base of kiosks deployed without multi-functionality consideration.  With advances in self-service applications and consumers’ acceptance of this technology, those retailers are now interested in pushing more applications onto their kiosks and would prefer to leverage their installed base.  With single-function kiosks, the hardware and processing power become obstacles to the in-store evolution. 

Transactional Kiosks
When customers transact with a retailer, they are expressing a vote of confidence in that retailer’s product offerings, service and security.  Transactional kiosks must support the retailer’s brand in these areas as well as providing a means for customers to perform an automated transaction.  Retailers should seek transactional kiosks designed from the ground up to manage secure, distributed financial transactions, delivering performance and reliability.  Transactional kiosks can be found in floor standing and counter-mount configurations, and should support the variety of peripherals that matches the types of payment that the retailer’s customers prefer. 

Transactional kiosks support transactions, and therefore must accommodate the consumer’s payment method of choice.  Retailers must have a comprehensive understanding of their customer’s preference before selecting the right kiosk.  Transactional kiosks often support credit card payments, but cash, check and debit are more challenging to support and are therefore unavailable.  By choosing a kiosk built from the ground up to support these types of payments, the retailer can be sure that the payment methods match their customer’s preferences.

When accepting cash payments, the retailer must also determine whether to provide change back to the customer from the kiosk.  Most transactional kiosks deployed in bill payment applications for wireless and utility providers do not provide change because of the added stocking and service challenges this represents.  Customers using these kiosks are informed that any overpayment made at the kiosk will be applied toward future bill amounts and that no change will be given at the kiosk.  This is a best practice that retailers should adopt for their transactional kiosk deployments as well.

The software that processes the payment transaction is just as integral to the safety and security of the transaction as the kiosk hardware.  The software application deployed on the transactional kiosk must be a fast and easy way for customers to complete a transaction without waiting in line for a customer service or sales representative.  Key software capabilities include the following:

• Customer authentication
• Payment acceptance via the retailer’s customer payment method of choice
• Secure communication with the retailer’s financial system

Practical Application
Most retailers begin the process of deploying technology within their infrastructure with a particular, often singular, function in mind.  This is certainly true of early price-checker deployments, where retailers were either sold on, or mandated to provide, the ability for consumers to scan a product to check its price in the aisle.  Price checkers certainly accomplish that task, but retailers missed a significant opportunity to engage further by deploying multi-function kiosks.  Single-function devices cannot accommodate any other in-aisle activities a customer may want to perform.  If a customer wants suggestions for items that compliment the scanned item, or more detailed product information, or the location of another specific item, the price checker cannot perform those tasks.  For those customers, the price checker is useless.  Therefore, the universe of customers that may interact with the device lessens, reducing opportunities for relaying branding campaign messages or positive customer interactions.

This approach is significantly more productive when modified early in the process.  Retailers must consider what functions make sense to be automated using self-service technology based on comprehensive understanding of their consumers.  Retailers should also undertake this process with a comprehensive understanding of the eligible processes for automation.  When applying these filters to the technology selection process, retailers develop a unique, cost-effective specification that serves their customer’s needs, allows customers to engage with the retailer in a branded and consistent manner and helps the retailer achieve cost-reduction goals.  Few other technology solutions offer such a dynamic value proposition.

Process Automation = Kiosk Applications
In a perfect world, all customers who enter a retail store do so to buy new products.  Reality differs from perfection in many ways, and countless customers enter retail stores to perform a variety of processes other than initiating a new goods purchase.  A thorough review of all services provided to customers creates the master list of processes that could be eligible to automate for a particular store.  Many customer processes have been automated successfully in a variety of retail settings.  Retailers should study the details about these processes and the resulting applications with an eye for whether the process is relevant to their situation, even if the specifics may differ from these successful deployments. 

Private Label Card Account Access, Payment & Management
Consumers are writing the rules on paying their bills including how, when and where.  This behavior, driven by consumer preference, requires retailers to offer a broad array of payment channels.  Market-leading retailers will be the ones that meet their customers at their point of preference, determining the optimal mix of billing and payment touch points, deepening the account relationship, creating loyalty while improving funds availability and reducing “cost to serve”. 

While most retail private label credit card bills are payable by mail, online and in-store, very few retailers have explored the cost- / labor-savings and customer service enhancements offered by deploying multi-function transactional kiosks.  Wireless phone providers have been reaping the benefits of the multi-function transactional kiosks deployed in their retail stores for the better part of the last decade.  Their customers go directly to the kiosk to pay their bill (via check, cash, credit or debit), check the status of their account, add minutes and perform many other activities.  This functionality frees associates to provide superior customer service and sales focus to the other customers in the store, ultimately increasing their conversion rates and basket sizes.

With a multi-function transactional kiosk, customers are empowered to access their private label card account while it’s most top-of-mind: when they’re in the store.  This customer can be a teenager whose parents have provided a store card with a specific spending limit, so she might want to access the account to see how close she is to that limit.  She might also want to pay a little of the cash she earned babysitting the night before toward her balance to free up a little room on the balance for a new purchase.  The customer might be a mom who finds refuge from her daily life in her favorite store, who keeps her little splurges separate from the family’s finances.  Once there, she remembers that she has an outstanding balance that she has forgotten to pay in the chaos of her daily life.  The last thing you want to encourage her to do is leave the store!  And, if she prefers cash her options are limited to in-person transactions.

Multi-function bill payment kiosks provide customers with access to their accounts for account management purposes in addition to bill payment.  Customers can update their new mailing address via the bill payment kiosk even before the Internet line is up at their new house.  For those private label cards that come with loyalty benefits, customers can access their point balance and redeem points on gift vouchers or gift cards loaded at the kiosk.

Layaway
According to many retailers, the old is new again.  It’s certainly true for fashion retailers, where virtually no current trend is truly “new”.  And it’s true for payment methods as well, where the revival of layaway brings about memories of Kmart’s halcyon days.  Layaway makes perfect sense in the context of the current economic environment.  Consumers have limited access to credit, but many still want that new “…(TV, computer, entertainment center, etc)”.  Layaway provides a means to an end for these customers, and a fantastic opportunity for retailers to drive loyal customer traffic.

Initiate today’s version of layaway with a multi-function transactional kiosk that features a current product catalog, and the retailer isn’t dedicating valuable storage space to floor items reserved for layaway customers.  Sell floor items now, to customers who can pay for them now.  Customers who prefer layaway can select their items through an electronic catalog at the kiosk.  The item may or may not be in stock, with this method it doesn’t matter.  If layaway is limited to in-stock items, then retailers are limiting customers’ choices as well as clogging valuable floor and storage space with these layaway items once they’re reserved for layaway customers. 
Once customers select the layaway item via the kiosk, they need only log into their existing payment account or create a new payment account with the retailer.  There’s no need for a credit check, because layaway carries the stipulation that the retailer holds a certain percentage of the item’s value for restocking should the customer decide not to purchase the item.  This eliminates the risk, making a credit application redundant and possibly a deterrent.  Customers can make payments toward their layaway balance via the multi-function transactional kiosk. 

Gift Registries
Self-service gift registries are already a success story, but the simplicity of their current capabilities creates an opportunity for improvement that may result in increased conversion rates.  Current gift registries provide lists of requested gift items, quantity requested and item status (purchased or not).  Most gift registries are accessible on-line.  Few gift registries allow the registrant’s friends / family to peruse the offerings in-store and then decide to purchase something off the registry that is out of stock or purchasing a gift card without requiring a sales associate’s assistance.  Few gift registries also allow cash customers to pool money toward a registry item.

Gift Cards
Why should customers stand in line for a simple gift card purchase?  Convenience is the driving force behind gift cards.  Customers don’t have the time, or don’t want to take the time, to find the perfect gift for their recipients.  Instead they buy gift cards, but the happy prospect of a short trip to the store for a quick purchase is often sullied by the wait to find an associate or a long line especially at the peak times when many customers can shop.  It’s quite possible that many potential gift card purchasers get frustrated about the line or lack of available associates and leave the store without purchasing anything.

Multi-function transactional kiosks allow customers of all kinds (credit, cash, check) to complete their transaction quickly, maintaining their high opinion of the retailer and ensuring that the gift card lives up to its convenience legacy.  The kiosk allows the customer to dictate the gift card balance.  Retailers can display all available gift card versions in the open because they’ll have no value until they go through the kiosk transaction.  With a card printer attachment, the kiosk can also print a customized message on the card. 

A Cog in the Wheel
Multi-function transactional kiosks can compliment a retailer’s current infrastructure while evolving to meet future needs.  Many retailers are also exploring or have already deployed interactive kiosks, whether for in-aisle shopper marketing, digital signage or other applications designed to engage the shopper.  Retailers can, and should, tie multi-function transactional kiosks into these technology infrastructure investments to ensure customers use them and maximize their engagement with the retailer.  A collaborated approach synergizes the impact of each individual technology component within the infrastructure, and presents a cohesive story to the customer.  Retailers considering multi-function transactional kiosks should review these technology solutions as part of a multi-faceted approach to customer engagement and creating compelling in-store experiences for their customers. 

Dynamic Value Proposition
Multi-function transactional kiosks offer retailers a dynamic value proposition.  Very few technology solutions offer a proven ability to increase store traffic and shopper spend while reducing personnel and overhead expenses.  Multi-function transactional kiosks currently offer these benefits to the mobile phone and utility providers using them for bill payment and account management purposes.  Retailers can also reap these benefits by considering all of the retail processes that can be automated and deploying multi-function transactional kiosks to support these processes.

By collaborating with the right self-service technology provider, retailers will find that multi-function transactional kiosks are available in a customizable, off-the-shelf offering that has a lower cost than may originally be expected.  A hardware solution that is flexible to adapt to the retailer’s needs, and a customizable software solution that interacts securely with the retailer’s financial system are the main components needed for a successful multi-function transactional kiosk deployment.  While this is an oversimplification, the right technology partner will provide these solutions in a simplistic manner, with documentation, support offerings, project management, installation assistance and a comprehensive solutions approach.

Multi-function transactional kiosks engage shoppers and process transactions that are appropriate to automate.  When deploying this technology, store sales associates are empowered to provide higher levels of service to customers involved in making purchase decisions or needing additional resources to process their transaction.  Ultimately, the technology retailers deploy must be useful in achieving the retailer’s strategic goals.  Multi-function transactional kiosks fill that role by offering retailers a sophisticated technology tool that capitalizes on loyal shoppers, engages shoppers during their store visits, encourages increased transactions and lowers overhead and personnel expenses.

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