SMITH'S TO INSTALL GIFT CERTIFICATE KIOSKS

MATTHEW W. EVANS

SALT LAKE CITY -- Smith's Food & Drug Centers will debut gift certificate kiosks in stores here that will not include the retailer's own certificates in initial offerings.

The retailer, owned by Kroger, Cincinnati, and based here, will provide about 6 square feet of floor space for the 6.5-foot-tall machines in about 30 stores to begin the program. The kiosks will contain a list of over 200 local and regional merchants through which Smith's customers can scroll in order to purchase certificates good only at those merchants.

"Smith's has evaluated the opportunity and feels confident customers will be thrilled with the convenience this gift certificate system offers," Mark Tuffin, Smith's group vice president of sales and merchandising said in a press statement. "We are encouraged by the potential of seeing new customers by offering the system within the community." He could not be reached for further comment.

New repeat customers is the primary potential benefit of this system, according to the supplier.

"A lot of people have told us that even if they don't shop at Smith's and they know that convenience is there, they will go into that store and buy that certificate," said Lou Pozzuoli, director of marketing for Neighborhood Box Office, also based here. If this turns out to be true, "there's a good chance they're going to buy other product," Pozzuoli added.

"If one golf store that's popular is on the other side of town from a customer," Pozzuoli explained, "rather than driving 45 minutes, they can just go around the corner to the grocery store and be able to purchase the certificate for the golf store there."

The Gift Certificate Company, a wholly-owned subsidiary of NBO, also based here, signed a three year agreement with Smith's. The supplier has similar kiosks in malls, which dispense a mall certificate good at any store in that mall. The pact with Smith's stipulates that in markets where the retailer has stores, "we will be in the Smith's location and no other grocer or so-called drug store in that market," Pozzuoli said. But the kiosks can be placed in retailers that do not compete directly with Smith's, he added.

With 37 stores in the Salt Lake City market, it's possible that all Smith's units here will roll out the machines.

"Initially, it will probably go into 30 or 37 in the Salt Lake City market," Pozzuoli said. "We're going to kick it off here, run it through the holidays and after that we will roll it out in other markets with Smith's." Of Smith's 117 stores, Pozzuoli would like to place the kiosks in 50.

Installing about two kiosks a day over a 15 to 20 day period, Pozzuoli expects to have the initial rollout complete by Sept. 1. NBO is in talks with other retailers including Smith's parent company and Albertson's, Boise, Idaho, to install the kiosks nationwide.

The supplier places and maintains the turnkey units at no expense to the retailer, according to Pozzuoli. The kiosks accept cash, credit and debit purchases.

"At the current time, the agreement is to not [dispense Smith's certificates] but it will be something to be added on shortly after we implement the program," said Pozzuoli. He added that once the retailer's certificates are available at the kiosks, Smith's has the option of reducing the labor it takes to sell Smith's certificates by dispensing them solely through the kiosks or merchandising them from several locations in the store.