INTERACTIVE KIOSK

DEENA AMATO-McCOY

Kiosks are fast becoming a major force in supermarkets. But retailers insist the units need to provide more functions -- beyond handing out electronic discounts and recipes -- to move higher up on store-level wish lists.

If kiosks are to become more important tools, retailers must begin using the devices for in-store ordering, displaying item and department information and bolstering inventory selection in a wide range of categories.

There are challenges. Retailers must be able to justify giving up floor space for the units and be able to integrate more functions into a single kiosk, rather than deploying numerous units that run independently throughout the store.

A&P, Montvale, N.J.; Ukrop's Super Markets, Richmond, Va., and G&R Felpausch Co., Hastings, Mich., are among a select but growing group of retailers that use kiosks to provide electronic discounts and promote specialty items to their shoppers.

Are consumers showing enough interest in the devices to warrant the investment in cost and space? Felpausch is reporting positive results, with electronic coupon redemption rates are as high as 20%.

Other retailers agree kiosks still hold immense promise to give shoppers value as their role expands into more areas of service.

"Offering different services [through the kiosks] gives customers one more reason to shop at our stores," said Bob Schoening, senior vice president of information systems at Giant Food, Landover, Md.

Retailers are exploring using kiosks for deli ordering, to provide medical information and to boost inventory selection.

Retailers that have put kiosks in deli departments have less congestion at the deli cases and hope to streamline labor.

"We use an interactive kiosk for deli orders at most store locations," said Bill Wolfe, director of merchandising, Genuardi's Family Markets, Norristown, Pa. "We think there could be further opportunities by using kiosks in this area for things like ordering party platters."

While he would not give specific results, Wolfe said Genuardi's has had increased sales with the kiosks, although results vary among locations.

"Once orders are placed, it takes minutes for orders to be filled," he added. "Customers do not like to stand in line at the deli counter on weekends. The kiosk allows customers to transmit orders, and they are ready for pick-up and payment at the front end."

Giant Food is testing two kiosks in its deli departments. "We are still experimenting with the technology, so I cannot quantify how much the electronic ordering is helping our staff," Schoening said.

"However, as customers get more familiar with using the technology, the units have the potential to smooth the department's work flow and allow us to better schedule our staff."

Store pharmacies are also taking advantage of potential efficiencies. Balls Food Stores, Kansas City, Kan., has five store pharmacies with kiosks that provide advertising and ordering information. As of Nov. 1, Balls' kiosks also will offer information on natural, herbal and homeopathic remedies. The retailer expects five more units to be live this month.

Furr's Supermarkets, Albuquerque, N.M., agreed that providing medical information was a viable application of kiosks, though the retailer wondered if human interaction would be missed.

Rather than relying on a box to hunt for specific information and print three pages of data specific to the medication, I would rather have the human contact," said John Granger, vice president of information systems at Furr's

Retailers like Balls, are adding more applications to kiosks in pharmacy departments, setting them up so customers can use them to order "durable goods" like wheelchairs, shower seats and crutches. Customers choose items from pictures displayed on the kiosks' multimedia touchscreen. The units print the orders, and the orders are delivered by a next-day delivery service direct from the wholesaler's warehouse.

"We have had the service in place for almost two months," said Michael Halliwell, pharmacy coordinator for Balls. "We sold a couple of items in each store, but we need to get the word out to our customers that the service is available."

"There is a potential here," said Giant's Schoening. "We, too, have explored the possibility of providing medical aids via kiosk. If we can justify that it will make shopping easier and provide a quick turnaround, there is potential in the application."

Other retailers are not as optimistic. "The idea of ordering items unseen reminds me of catalog-showroom shopping," said Ball's Wolfe. "I still think it is in our strength to show an actual lawn chair, for example, than to rely on sales based on items sight unseen," he added.

Retailers told SN another disadvantage of kiosk ordering is the labor needed to store and retrieve items for shoppers. "We do not have associates in the back room that are waiting to bring out items like patio furniture," said Andy Carrano, vice president of marketing and corporate affairs at A&P.

One way to encourage the consumer to make regular kiosk stops is to streamline various functions.

"For the units to play a bigger role in the consumer's shopping experience in the new millennium, we need to integrate our systems," said Genuardi's Wolfe. "We cannot use so many disjointed units at multiple locations throughout the store. We need one unit that runs electronic coupons, recipes, store and product information, [and has] ordering capabilities and other applications that are still evolving. We are not there yet."

"To have an effective kiosk program, you need more than one unit," said Furr's Granger. "You need to examine your floor space, and the cube space of each unit, then multiply that with the number of units you plan to install. Chances are they are also going to be placed near your front doors, which can eat up premium space."