RETAIL MARKETING 1998-01-26

LINDA PURPURA

Opinions vary widely about kiosks' ability to achieve marketing goals. Among retailers who are the most enthusiastic about kiosks' possibilities are those who have achieved impressive results offering clipless coupons via the in-store units, including Cub Foods, Edina, Minn., and G&R Felpausch, Hastings, Mich.

Other retailers are finding that kiosk success can also be achieved by making a variety of customer-service and solution selling options available through the freestanding units, turning kiosks into a desired destination for shoppers.

A&P, Montvale, N.J., for example, is adding kiosks that provide consumers with meal planning information. A rollout of units providing information about the types of wines that go with different kinds of dinners, to be placed in 120 A&P stores with liquor departments in New Jersey and Pennsylvania, is well under way, said Mike Rourke, senior vice president of communication and corporate affairs.

"The kiosk is related to wine, but it has also helped overall sales in the liquor departments," Rourke said.

Besides these information kiosks, A&P uses different stand-alone units to deliver paperless electronic discounts to the point of sale in more than 600 of its stores.

Wegmans Food Markets, Rochester, N.Y., experimented with kiosks offering Internet access and electronic shopping in one store in the Rochester area last year, according to Trisha Furphy, systems programmer of Internet systems at Wegmans. The kiosk was essentially a personal computer set up in the store as a freestanding unit.

While calling the test a "great learning experience," Furphy said the retailer's direction now is to use kiosk applications that are "more focused on Wegmans service," such as those offering meal planning information.

Wegmans' kiosks do not yet offer clipless coupons. "With so many new technologies, we know there are a lot of opportunities. We're still kind of feeling it out," Furphy said.

Fleming Cos., Oklahoma City, makes kiosks that offer clipless coupons and other services part of a menu of offerings available to both corporate-owned stores and the independent retailers Fleming services.

"We're seeing more and more independents embracing the kiosk program," said Bill Desjardins, manager of customer-loyalty programs. Whether a kiosk is used from the start of the customer loyalty program, or later as an enhancement, is based on the retailer's objectives.

Many independents view kiosks as a vehicle for multiple applications to reach consumers, he added.

"Not only can kiosks be used to communicate different offerings such as coupons or rewards, they can also communicate special events and activities going on in the store," Desjardins said. "They can also be a vehicle to wish a shopper 'Happy Birthday' or tell a customer their lost keys have been turned in and are at the front desk."

G&R Felpausch is currently testing numerous ways to get customers to use its kiosks more often, said Jeff Crim, target marketing manager. The stand-alone units are also a primary method for rewarding the retailer's top customers.

"We will be putting additional savings on advertised items into the kiosk," Crim said. "There's only going to be two to three a week, but we will hit hot categories for that week. For example, if meat is on sale, we might give an extra $1 off the advertised price to our best customers, and maybe 50 cents off for a customer who spends less.

"We want customers to have weekly deals in [the kiosks] so that when they go in they know they're going to get additional savings," he added.

G&R Felpausch redeems 60,000 to 90,000 kiosk-generated coupons per month. Redemption rates are between 15% to 20% overall from the kiosks. The retailer's 18 stores have two kiosks each.

G&R Felpausch is also exploring the possibility of developing a screen that allows customers to apply for the store's frequent-shopper card electronically. The current procedure requires a customer-service associate to review the application before issuing the card. Each customer's information then has to be input into the system at another location, "which gets very expensive," Crim said.

Another kiosk application that can free up customer-service personnel is to provide shoppers with information on the points they have accrued toward, for example, holiday turkeys. Last fall, Felpausch's frequent shoppers could swipe their cards at the kiosk to receive a voucher indicating the dollar amount they had earned toward a free turkey. For the 1998 turkey program, rather than use such vouchers simply as messages, the retailer plans to issue them as coupons that can be taken to the register for a discount.

One G&R Felpausch store has been testing providing lost key information via its kiosks since Jan. 1. The retailer's frequent-shopper program uses key-ring tags, so lost keys are often returned to stores.

"We're trying to give the kiosk total value, so that it would be stupid if customers didn't stop by and at least see what it has to offer," Crim said. "The whole idea is to keep it fresh every week."

While new services offered via kiosks present new opportunities, clipless coupons still represent a primary use for the units.

During a two-week test of a coupon-dispensing kiosk at a Cub Foods store, a division of Jerry's Enterprises, Edina, Minn., an average of 55% of dispensed coupons were redeemed. Industrywide, redemption averages for traditional coupons are 2% to 3%.

The freestanding unit featured 100 spaces for product discounts, generally valued from 25 cents to $1.00, from vendors of soda, cereal and dairy products such as yogurt, cream cheese and orange juice. The overall average vendor coupon value is 57 cents, according to industry sources.

"All customers had to do was touch the screen on the particular coupon they wanted and within a matter of four seconds it came out," said Gary Munson, supervising store director for Cub Foods.

"I would watch a customer come in, and they would look at the unit with a quizzical look on their face," he added. "Then their eyes would brighten, they would get a smile and then they would go up and identify values they wanted to incorporate within their shopping trip for the day."

Redemptions were higher in the second week than the first week. "That told me people used it the first week and then came back and used it again the second week, or the word spread and friends and neighbors possibly came in and used it," said Munson, noting that redemption increased even though the second week's total store volume was not as high as the first week's.

"I believe [the kiosk] increased my dollar profit and sales and it increased customer satisfaction," Munson said. "And last week, when it was not in the store, I received hundreds of requests as to where it was and when was it coming back."