It's not often that supermarkets are affected by the airline industry, but that may be the case when it comes to electronic kiosks.
The proliferation of check-in kiosks at airports in the past few years “has trained people on how to use kiosks,” said Greg Buzek, president of IHL Consulting Group, Franklin, Tenn. “They aren't as threatened by the technology.”
This familiarity has already benefited self-checkout technology. In fact, says Buzek, the No. 1 correlation with self-checkout usage in supermarkets is whether someone uses airline kiosks. The acceptance of self-checkout now appears to be paving the way for greater adoption of kiosks, which just three or four years ago were considered the ugly duckling of retail technology, often collecting dust for a few months before being yanked from the sales floor.
These days, retailers are increasingly exploring kiosks' ability to add value to the shopping experience by providing information — notably recipes and cooking instructions — about a growing number of foods.
For example, recipe kiosks in the meat/seafood department are helping shoppers break away from mundane meal preparation and delve into totally new cuts of meat or species of fish. Wine kiosks are taking the mystery out of pairing wines with cheeses and main courses. And now information kiosks are beginning to appear in produce sections to shed light on the many varieties of fruits and vegetables and what can be done with them.
Some retailers are also starting to install digital screens that offer similar information, though without the one-on-one interaction and printouts offered by kiosks.
Other kiosks aim more at convenience. Chief among these is the deli kiosk, which enables shoppers to place their orders without waiting in line — especially useful on a Saturday morning in South Florida, for example, where a crowd of seniors may be clamoring for samples and demanding their meats be sliced just so, noted Buzek.
Another new breed of kiosk, such as Albertsons' “avenu” unit, dispenses coupons to shoppers as they enter the store, targeting loyalty customers with offers tailored to individual tastes and habits. And then there are the many kiosks being installed and maintained by third-party companies for everything from DVD rentals to digital photo processing.
While consumers — particularly airline travelers and Web surfers — have grown more comfortable with touchscreen kiosk technology, kiosks are by no means a slam-dunk for supermarkets. One retailer reported removing them after determining that the maintenance costs outstrip the perceived return. And many are finding that kiosks still need to be explained and promoted before shoppers will give them a try.
One of the information kiosk providers experiencing growth in the supermarket sector is Healthnotes, Portland, Ore., whose sales grew nearly 50% last year. Its kiosks are installed in all Fred Meyer and Wild Oats stores, as well as “quite a few” Whole Foods outlets and in select Meijer, Hy-Vee, Ukrop's and Raley's units, among others, said Jeff Sea-crist, vice president of marketing for Healthnotes. Overall, the kiosks are in 2,200 food stores, which include a large base of health food outlets, plus a large number of vitamin supplement stores.
Indeed, Healthnotes' kiosks got their start providing information on vitamins, supplements, herbs, OTC medicines and prescriptions. But they have evolved into machines offering a wide range of food-related “wellness” information, including quick healthy recipes, food preparation and nutrition. The kiosks have become tailored to specific departments such as meat/seafood, wine and produce.
While most of Healthnotes' retailers install one kiosk in a store, some are beginning to try installing them in multiple departments, said Seacrist. One example of that is Martin's Super Markets, South Bend, Ind., a 20-unit chain that has three kiosks in a store opened last fall, one each in the meat/seafood, wine and produce departments. Based on the success of that program, Martin's added two kiosks to four other stores two weeks ago; each store has a kiosk in the produce department as well as another one in either wine or meat/seafood.
“With the popularity of cooking shows and food networks, consumers are more into recipes,” said Amy Simeri McClellan, market research supervisor for Martin's. The kiosks are an easy-to-use resource for this information that “consumers are less afraid to use than they used to be,” she added.
In addition, store employees have been tapping the kiosks “to give customers information they are asking about,” McClellan said. “They can point them in the right direction.”
Martin's has found that the kiosks are averaging 400 unique users, engaged in 1,200 to 1,500 unique page views, per month. “We're happy with that [usage], though there's always room for improvement,” said McClellan.
Produce kiosks, the latest incarnation, have proved to be the most popular machines, offering ways to incorporate produce in salads, desserts and main courses, said McClellan. “There are so many unique produce items that people have no idea how to use,” she said. “Healthnotes does a super job explaining where products are from, their flavor profile and how to use them.”
She added that the Healthnotes kiosks go beyond basic product information by talking about health concerns and other aspects of healthy living.
Martin's is supporting the kiosks by building special displays around them that feature the items listed in a particular recipe. “We're saying, ‘Here's a recipe from the kiosk, and there are hundreds more,’” said McClellan. “And they can pick up each ingredient right there.” This promotion has been done primarily in the produce department because of its greater amount of available space.
While Martin's has observed shoppers purchasing items suggested by a recipe in the kiosks, McClellan declined to speculate on the impact kiosks are having on store sales. “The main thing is that it's providing a service to customers they can't find elsewhere,” she said.
Costs for the kiosks vary according to the number of placements; a single placement runs about $3,000 annually, said Seacrist.
Because Martin's has found the kiosks easy to maintain, the chain has opted to operate them on a stand-alone basis. However, if they are rolled out to all of the chain's 20 stores, the company may decide to take advantage of the units' wireless networking capability and control them centrally, McClellan said. Martin's updates the units twice a year by manually loading CDs.
ROLLOUT AT BLOOM
Another kiosk vendor experiencing growth with recipe kiosks is ShoptoCook, Buffalo, N.Y. Like Healthnotes, ShoptoCook offers kiosks for the meat/seafood, wine and produce departments, but its kiosks also allow shoppers to scan products as a way to call up recipes.
Late last month, Bloom, a division of Food Lion, Salisbury, N.C., finished installing newly branded “Breeze” kiosks, which incorporate ShoptoCook functionality, in its 52 stores. In one of the largest kiosk rollouts in the industry, Bloom is deploying six or seven kiosks per store across several departments, differing by store. In addition to ShoptoCook's recipe and wine capabilities, the kiosks include a price checker, product locator, personal scanning primer and downloaded shopping list retriever.
Meanwhile, Giant Food Stores, Carlisle, Pa., a division of Ahold, recently completed installation of the three versions of the ShoptoCook kiosk at more than 40 stores, said Frank Beurskens, chief executive officer, ShoptoCook. All of Giant's stores, as well as stores run by Ahold subsidiary Tops, deploy the meat/seafood kiosk, he added. Giant declined to comment.
ShoptoCook kiosks are also being operated at select Schnuck Markets, Hannaford Bros. and Spartan stores, Beurskens said. All told, more than 300 stores are equipped with about 1,000 kiosks, most of them deployed in the past 18 months.
Beurskens regards the kiosks as providing shoppers “expert advice on every perishable and wine stockkeeping unit at a fraction of the cost of an employee.” ShoptoCook's kiosks, which may be integrated into a store's network via wired or wireless connectivity, also offer a price checker and a product locator. “When a shopper finds a meal she likes, prints out the recipe and prepares it — you can't get more engaged than that,” he added.
ShoptoCook is also selling promotional opportunities on the kiosks to CPG companies — revenue that is shared with the retailers. Beurskens believes that in-store kiosks and video networks offer CPG companies a more “defined, measurable channel” than traditional broadcast advertising. The company sells the kiosks to retailers for about $5,000 or rents them for about $160 per month, plus a monthly fee for recipes, monitoring and enhancements.
Unified Western Grocers, a Commerce, Calif.-based cooperative wholesaler, has been testing ShoptoCook meat/seafood kiosks at four of its member stores since January. Though initial results are not in yet, “we hear from the retailers that consumers have been very positive about the kiosks,” said Ray Van Wetten, executive director, retail support services, at Unified.
Unified's retailers opted to connect the kiosks via a wireless high-speed cellular connection, which allows ShoptoCook to monitor the kiosks and report to the stores when the printer paper needs a refill, noted Van Wetten.
DEMOS ARE KEY
One lesson already learned by Unified's retailers is the need to demonstrate the kiosks. “You have to commit to assigning somebody on staff to take the consumer through it,” said Van Wetten. “It takes a while to get to a comfort zone.”
That sentiment is echoed by Alton Weekley, co-owner of Fausto's Food Palace, Key West, Fla., which has deployed a wine kiosk in its two gourmet food stores for the past year. “The key is to have someone in the store to show shoppers what [the kiosk] does,” he said. Added IHL Consulting's Buzek: “It's like self-checkout — don't assume that people know how to use it.”
Fausto's kiosks are supplied by Wine Market Kiosk, Roswell, Ga., which also operates winesandrecipes.com. The vendor is planning to launch a new version of the kiosk in May and pilot it at a tier-one retailer, said Jon Holland, president. The new kiosk will be integrated into a store's POS system, facilitating price updates and data maintenance.
According to Weekley, 2% to 5% of his shoppers use the kiosk, and the percentage is growing. Shoppers can scan a bottle of wine and call up suggested recipes, or start with a meal idea and look for an appropriate wine.