Smarter kiosks no longer touch and go - new interactive kiosks hold promise as tools for retailers to dramatically increase their marketing options - InterACTIVITY

Discount Store News, May 6, 1996 by Pete Hisey

NATIONWIDE DSN REPORT -- The state of the art in interactive kiosks is changing rapidly, and for retailers the result could be a quantum leap in customer service and extremely attractive profit margins.

In-store kiosk technology has always been limited by a mutually exclusive either/or problem: either high interactivity or high information content--but never both.

For instance, there have been several touchscreen stations that would allow users to sample new music releases, movies or computer games, but the number of choices has generally been limited to well under 100. On the other hand, many record and books stores contain kiosks that list virtually everything available in the field, but these kiosks are no more interactive than the old library card catalog.

Over the next few months, however, technologies will be coming on the scene that will give users a chance to sample hundreds of thousands of individual songs, play segments of thousands of computer software titles, browse through 1.3 million in-print books and view thousands of movies and videos. In many cases, these in-store technologies will get to know users' tastes and guide them toward other titles.

Muze, generally considered the in-store leader in the music kiosk field, is about to unveil three new technologies that will allow users to browse through millions of titles (book, video, and music), special order in-print products, read reviews and dig into the backgrounds of musicians, writers and directors.

Muze is at present testing a music kiosk in 10 locations at a national retailer, and the results to date have been eye-popping, according to the company's Gary Geller. "On average, each kiosk is generating 60 to 80 incremental special orders per week," he said. "Since almost all of the orders are deep catalog and since they're ordered through a one-stop, they're all being sold at full list price." To date, each kiosk is generating in excess of $220 a week in gross profit, which works out to about $11,000 a year, he said.

Customers receive their special order in-store in as little as 48 hours, and Geller noted that the fill rate is in excess of 90%, nearly the same figure as the percentage of customers who return to pick up their order. Less than 10% of orders go unclaimed, he said.

The book version of the kiosk, which debuts this month at Virgin's new New York City megastore along with five music kiosks and a video sampler from Muze, allows users to browse through listings of virtually every book in print in new and novel ways. For instance, someone interested in historical fiction from the French Revolution could call up every piece of historical fiction concerned with France from 1780 to 1810 with just a few keystrokes.

The music version of Muze packs in specialized features meant to tie in with music-purchase stimuli like the Grammys and the Rock 'n' Roll Hall of Fame by featuring inductees and award winners. A "Dig a Little Deeper" feature profiles the user's tastes, then suggests CDs that might appeal to that shopper. For customers who have heard a song somewhere, but don't know the title or artist, "It Goes Something Like ..." searches for key words, then prints out matches. "From the Past Clearly" concentrates on reissues, appealing to the deep catalog buyer. According to Geller, these features will eventually become revenue streams, each sold to a corporate sponsor. Retailers will have the choice of accepting or declining the ads and revenue.

Newer features include a customizable cross-reference with a retailer's listening posts, and the special order feature, which prints out a bar-coded order to be dropped off at the cashier or special order department. One option would allow users to order any out-of-stock CD, pay with a credit card at the kiosk, then receive their order by Federal Express in as little as 48 hours.

Also vying for the music kiosk dollar is Advanced Communications Design, which is offering listening stations with built-in databases (customizable by retailer) that will automatically play any of up to 60,000 CDs with a mere swipe of the bar code from an in-stock CD. Retailers provide ACD with in-store inventories, which then become the listening stations' database. Titles can be added and deleted at will.

An added dimension to these often static in-store installations comes from from Chicago-based Brown Innovations, which has developed a highly sensitive dome that delivers exceptional (and loud) stereo sound to anyone standing beneath it. Those standing only a foot or two away hear no more than a whisper. The domes remove the psychological barrier of headphones, inviting browsers to check out something new.

Jeremy Brown, president of the company, noted that after a slow start, retailers are warming to the concept, which replaces bulky headphones (which have to be replaced at least once a year) with a clean, long-lasting solution.

Among retailers presently using or testing Brown's domes, he said, are Best Buy, Virgin Megastores and Borders, in addition to Cyberplay, the Orlando, Fla., start-up that became the first store last year to adopt the domes as its primary sound-delivery source.