Though 2009 was a year many would like to forget, the kiosk industry as a whole has escaped relatively unscathed. A testament to the industry's relevance and to the power of innovative, consumer-centric technology, kiosk deployments seem to have taken only a small hit, and consumers continue to flock to self-service stand-bys like grocery self-checkout and DVD-rental kiosks in droves.
Here, we take a look at the top five self-service stories this year, as well as one story we wish we didn't have to report.
Coinstar
This Bellevue, Wash.-based company was just getting the ball rolling when it acquired Redbox Automated Retail in February. Since then, Coinstar, which processed more than $3 billion in coins in 2008, has announced a 156-percent jump in redbox' revenue in the first quarter, a nationwide redbox-placement deal with the Albertson's grocery chain, a $460 million movie-distribution deal with Sony and an agreement with Kroger to increase its coin-counting kiosk footprint by more than 2,000.
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Coinstar also made a smart strategic move when it chose in September to offload its entertainment-services business line, which included gumball machines, children's rides and video games in an effort to concentrate on its self-service strategy.
"It's clear to us that our core strength is in the area of automated retail," Coinstar CEO Paul Davis said in the company's second-quarter earnings call in August. "The combination of retailer demand, consumer adoption, our core competencies and opportunities for innovation all point to this as being a sustainable platform for future growth."
KioskCom NYC
After what some thought was a disappointing turnout at May's Las Vegas event, KioskCom's Self Service Expo bounced back in November with its New York edition. Not only was attendance surprisingly high, given the economic backdrop and expense of traveling to New York City, but the show's organizers also put together a compelling programming schedule full of meaningful sessions and practical take-home information, too much of which is often lost in the tradeshow shuffle.
The event hit the ground running with a keynote presentation from Gregg Kaplan, president and COO of Coinstar Inc., which completely packed a session hall at 9 a.m. the first day. Kaplan shared valuable tips about expanding a kiosk network, and he also announced the winner of Coinstar and KioskCom's "Big Idea" contest, which awarded $10,000 to the best retail kiosk concept entered.
Though Coinstar was the sponsor of the contest and its $10,000 reward, hosting it was certainly a smart move for KioskCom. It garnered some excellent publicity for the show, Coinstar and the contest's winner, ecoATM, and it seemed to renew the energy and entrepreneurial spirit of the kiosk industry.
Perhaps most importantly, at least for KioskCom's organizers, the show's exhibitors benefited from the organization's strict registration criteria and the increase in foot traffic.
"The feedback we received was very, very positive, both in terms of the quality and the quantity of leads that everybody met with and, more importantly, the quality and quantity of real, viable opportunities that they're going to be involved in based on conversations they had at the show," said Lawrence Dvorchik, KioskCom's general manager. "Exhibitors were just plain busy, and they were busy with real potential projects and prospects."
Biometrics
Much like digital-download capabilities, biometric technology has been the "next big thing" in the self-service space for some time. Although it's still not mainstream, the technology gained considerable ground this year, thanks in part to the United States government.
Following the meltdown of the Clear registered traveler program in June, the U.S. Department of Homeland Security stepped in with its Global Entry kiosks, where international travelers can skip the customs line and in only a couple of minutes have their identities verified using iris- and fingerprint-scan biometric capabilities.
Also, because of the Obama administration's pledge to make all U.S. healthcare records electronic, more and more healthcare providers are turning to self-service kiosks that allow patients to do everything from make appointments to update their medical records and use biometric technology to identify patients, providers and office or hospital staff.
"Healthcare has always been thought of as being sort of behind on IT technology," said Josh Napua, who works closely Fujitsu's MedServ patient kiosk, which employs palm-vein-recognition biometrics. "But obviously with the infusion of the Obama initiative for electronic medical records, I think there's a growing interest, to say the least, in trying to figure out a lot of these solutions in healthcare."
Tesco's all-self-checkout concept
The United Kingdom's biggest big-box retailer recently made headlines when it opened an all-self-checkout concept store in Northhampton, England. Though Tesco has operated all-self-checkout Fresh & Easy stores in the western U.S. for a few years, the new location in England is an even bigger step for the self-service industry, given the traditional European lag in kiosk deployment and adoption numbers.
Positive reactions to Tesco's new store recognize the inevitable draw of self-service at retail:
"Despite the sizeable initial investment, there has been a clear shift towards self-checkout since the turn of this century, especially by big-box chains," said Frost & Sullivan's Aravindh Vanchesan in a commentary about the concept. "Retailers are studying ways to attract new customers (in addition to retaining existing ones) and in this context, self-checkout has been positioned as a technology solution that can drive up customer satisfaction levels, leading to a more lasting relationship. Not to mention the cost savings."
Though Tesco has met with some resistance to the concept, both in the U.S. and abroad, its customers gravitate to the stores because, as consumers have shown time and again, many of them prefer self-checkout to a traditional lane. It gives them control and makes them feel as though they are receiving faster and more accurate service. Tesco is pushing the retail boundaries and helping the self-service industry make a stronger case for itself with these concept stores.
The economy
Few industries can count 2009 as even a decent year, but the kiosk business is one of them. Of course deployments have been put on hold because of tight credit and companies have been forced to "trim the fat" as they struggled through the global recession, but kiosk developers with compelling value propositions have reaped the benefits of cost-conscious deployers and consumers alike.
At the risk of harping on 2009's obvious self-service superstars, Coinstar and redbox have never had a better year, all because they made consumers an offer they cannot refuse, especially when times are tight.
More importantly, however, more deployers are becoming convinced of self-service's lasting positive impact on their bottom lines. Self-checkout deployments continue to grow because retailers simply cannot ignore the rise in customer satisfaction and the dip in labor costs that follow deployment. Same goes for airline self-check-in, photo kiosks and patient self-service, to name a few. It's not often that an innovation that benefits a retailer so dramatically also pleases consumers and improves their experiences at retail. Thanks in part to a financial landscape that has forced some tough decisions, more and more retailers continue to realize that self-service does just that.
Worst of 2009
The honor of 2009's worst moment in self-service must go to the Hollywood movie studios — namely, Warner Bros., Universal and 20th Century Fox.
These studios have refused to distribute new release titles to redbox the day they come out because, they maintain, the $1-per-day pricing model puts DVD sales profits, and thus the entire film industry's business model, at risk. Never mind that redbox has deployed more than 22,000 DVD-rental kiosks to answer consumer demand for affordable, one-night rentals. The success of redbox' DVD kiosk network has other companies scrambling to compete because it's clearly a service consumers have proven they want.
Hollywood's greed and its self-serving argument should be considered an affront to the consumer population, whose dollars are, by the billions, responsible for the movie industry's existence. Kudos go to redbox for standing its ground and suing the studios and for figuring out a way to work around their mandates by purchasing the restricted new releases at retail, as costly and inefficient as it might be for the company.
A few studios (Paramount and Lionsgate among them) have agreed to work with redbox, and for that we applaud them. But those that refuse to answer the consumer's call for affordable new release rentals continue to tarnish the entire film industry's reputation.
