The hype of five years ago that stores would be considerably smaller
stocked only with the top selling items and virtually devoid of sales
clerks and service would be available through in-store kiosks connected to
the Internet has gone down the dot com drain.  The article below shows
that many large retail chains are rethinking and reconsidering the notion
of the in-store kiosk.  Apparently it is still safe to expect that
in-store assistance is still available.

kelly 

 The New York Times 
   
February 19, 2001

E-Commerce Report: Retailers Rethink Internet Kiosks

By BOB TEDESCHI

   IN 1999, when traditional retailers scrambled to build defensive
   positions against Internet competitors, the phrase "clicks and mortar"
   was their battle cry. For many merchants, that strategy to use both
   traditional and online stores to reach consumers was embodied by
   Internet kiosks, which sprang up in the aisles of Gap, Staples and
   Borders, among others.
   
   The idea was to use the store to market the Web site, give shoppers
   access to all the items that the store could not fit on its shelves
   and, at the same time, reduce the workload of sales clerks by training
   customers to be self-sufficient.
   
   But two years into the experiment, retailers are finding that, as with
   all their Internet initiatives, there is nothing easy about managing
   kiosks. Not only are these in-store computer stations costly to build
   and maintain, executives said, but they can deliver zero sales if they
   are not designed for specific shopping tasks. Some merchants, like
   Gap, are abandoning the concept altogether, while others are
   rethinking their kiosk strategies.
   
   "Everyone talks about how they want their Web sites to be sticky,"
   said Steve Chaffin, who heads the Internet kiosk program for Kmart.
   "Well, with these, it's just the opposite. We're trying to make them
   slippery, so the customer can get in and out quickly."
   
   Mr. Chaffin said Kmart finished installing some 3,500 kiosks in 1,200
   stores, with each computer station allowing access only to
   Bluelight.com, Kmart's online store. Initially, the kiosk display
   screens looked, logically enough, like the Bluelight site.
   
   But now the company is working to make the home page "more specific to
   the area where the kiosk is," Mr. Chaffin said. "If it's in home
   electronics," he said, "you don't really need to show people the
   Martha Stewart towels that are on special."
   
   As is common practice among retailers with kiosks, Kmart's computer
   stations are linked to the company's Internet site. And, like other
   merchants, Kmart allows shoppers to browse through the entire
   Bluelight Web store as they would from any other Internet device. And
   Kmart, like other retailers, limits the in-store surfing to its own
   site, rather than giving the public free access to the entire Web.
   
   The latest rollout cost "maybe a couple million dollars," Mr. Chaffin
   said, a figure that would have been much higher if some kiosks had not
   already been in place from a previous non-Internet electronic sales
   effort. Previously, those devices let customers shop from among 2,000
   products, like truck covers and tool sheds, that were not carried in
   the stores. Now, through Bluelight.com, the kiosks display 250,000
   product variations, compared with 60,000 in a typical store.
   
   Mr. Chaffin declined to cite sales numbers, but said Kmart had seen "a
   fairly high level of trial traffic, and we're starting to see more in
   purchase numbers, which we're happy about because we've done very
   little marketing."
   
   That is partly because the company wants to improve the kiosks'
   reliability "before we push more people to them," he said. "When you
   start messing around with running bandwidth in and out of stores," he
   added, "there are a lot more variables, so things happen."
   
   Staples, the office-supplies merchant, has just completed an equally
   ambitious kiosk project, installing four so-called access point
   systems in each of its 974 stores in the United States.
   
   But the company is further along in giving shoppers pages that are
   specific to their shopping needs. For instance, kiosks in the office
   furniture section feature a home page specifically designed for
   furniture, with options for fabric selection, special orders and the
   like.
   
   According to Edward C. Harsant, Staples' president for North American
   stores, the results have exceeded expectations, with kiosk customers
   spending, on average, three times more per visit than other store
   customers. (Most kiosk purchases are for items that will be shipped to
   the customers' homes.) The typical kiosk customer relies on a sales
   clerk for help, Mr. Harsant said, "but we see the customers using
   these more independently, with time, and as technology makes it
   easier."
   
   Still, not every retailer is following the task-specific kiosk
   strategy. One example is Sephora, a division of LVMH Moët Hennessy
   Louis Vuitton that sells makeup, perfume and other beauty goods online
   and in its 64 stores internationally. According to Jim Wiggett, chief
   executive of Sephora.com, the company is upgrading its store kiosks to
   feature the Sephora Web site. (Currently, they offer marketing
   information, from CD-ROM's)
   
   Mr. Wiggett said that Sephora tested the idea of task-specific kiosks
   say, for eye makeup or for shampoo, but that customers rejected the
   idea because "they're expecting a full offering everywhere they go."
   
   Meanwhile, at least one noteworthy retailer, Gap, is eliminating its
   kiosks. About 18 months ago, the company built so-called Web lounges
   at eight of its biggest stores, with an eye toward a broader rollout.
   Initially, Gap reported constant crowds at the kiosks, and tales of
   customers buying online what they could have simply taken off a nearby
   shelf.
   
   But interest dwindled, and last year Gap dismantled the lounges.
   Heather Dougherty, an analyst with Jupiter Research, said Gap's
   mistake had been to "just stick a Web site in the store, instead of
   trying to help customers with a specific function."
   
   Stacy MacLean, a Gap spokeswoman, said the company had concluded that
   "people prefer to do their online shopping at home." Ms. MacLean added
   that sales clerks could still connect to the Gap Web site from the
   stores, to help fill customer requests.
   
   Perhaps the most fertile ground for Web kiosks is among financial
   services providers like Charles Schwab and Fidelity, because these
   businesses essentially sell the thing that kiosks deliver best:
   information. Fidelity, part of the FMR Corporation, is finishing a
   deployment of nearly 300 kiosks in its 77 "investor centers," where
   customers can go to make trades, deposit money and consult advisers.
   
   According to Thomas Cmejla (pronounced SHMAY-la), a senior vice
   president at Fidelity, the company began in early 1997 to look for
   ways to integrate the investor centers with its Internet efforts.
   "People would often come in and ask an employee for a stock quote, or
   deposit a check," he said. "When we looked at the amount of those
   requests across all of our locations, it added up to a lot of time."
   
   Like Staples, Fidelity assigns specific tasks to different kiosks. For
   instance, in many locations, there is a kiosk devoted to check
   deposits a feature that paid for itself within a year in labor
   savings, Mr. Cmejla said. Another kiosk in the lobby, labeled
   Discover, delivers introductory information from the Web site about
   the company's services, but it does not allow customers access to
   their accounts.
   
   Still another, the Trade kiosk, is a full- service terminal for
   transactions and research. Mr. Cmejla would not disclose the costs of
   building these kiosks, but with their large monitors and touch
   screens, they are almost certainly much more expensive than those in
   other retail establishments.
   
   Moreover, because customers take an obvious security risk by making
   transactions in public, Fidelity took the precaution of adding an
   automatic log-off feature to its kiosks. Modeled on manufacturing
   workstations that automatically shut off when a worker steps off a
   platform, the Fidelity workstations close down the customer's account
   when he walks away.
   
   And compared with the merchandising environment, where kiosks are
   meant to save space by allowing retailers to stock fewer items
   Fidelity's kiosk initiative might actually require more space in the
   future. "If you want to expand the offering with more kiosks,
   naturally that will require a little more space," Mr. Cmejla said.
   
   "When you bring new technology into your space, you're always going to
   have intended and unintended consequences," he added. "There is no
   science on this."


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