|| The Perspective
Monday, 31 July 2006
Last week I traveled to Colorado for my regular visits with members. Thinking I would escape the heat by heading for the mountains, I was only half correct. Denver was steaming, but not Colorado Springs. Here’s the scoop on the companies I visited:
RMES Communications Inc.
Denver – At RMES, I met with President/CEO Herman Malone. RMES owns all the pay phones at Denver International Airport. When the airport opened about a decade ago there were 800 pay phones. Now, not surprisingly, there are only 200. About three years ago, RMES started installing Internet kiosks at the airport and has 32 deployed now. They plan to expand that number to 100 by July 2007. They also have some calling card kiosks and want to extend their offerings into amusement/gaming. Other considerations are work stations to recharge laptops and cell phones, photo kiosks and CD/media kiosks.
Arvada – I met Kiosk Tree Co-Founder Dan Krueger at Performance Cycle in Denver, a motorcycle parts and accessories superstore where he is beta testing Kiosk Tree. Kiosk Tree develops the software for point-of-decision kiosks to help consumers learn specifics about products and do side-by-side comparisons. The staff at Performance Cycle also uses it while talking to customers as an assisted-selling device. With remote management, new products can be added and removed. Reports can also be generated detailing all customer searches.
KIOSK Information Systems
Louisville – Craig Keefner, channel manager and former executive director of this association, gave me a tour of KIOSK’s impressive 60,000-square-foot facility. I also had the opportunity to meet Pete Snyder, who formerly directed KIOSK’s Scotland plant, but has now moved back to Colorado. Business is good for North America’s largest kiosk maker as Craig told me the company is looking to move to a larger facility in January. The firm’s sales are about 50% standard kiosks and 50% custom kiosks. At times, up to 300 kiosks a day come off the assembly line. KIOSK is often behind the scenes, building kiosks for HP, Sony, Alamo Rent-A-Car and FedEx, just to name a few.
Denver – Russ Hinely, senior vice president & director of diversified services for new SSKA member Bantek gave me an overview of his company over lunch. Bantek recently merged with Efmark Premium Armored and is the largest NCR ATM reseller. The company’s more-than 2,500 employees services over 65,000 ATMs. Among their many services offered are installations, cash extraction, maintenance, upgrades and removals.
Four Winds Interactive
Arvada – Four Winds is a digital signage company, which includes interactive displays. Denis Lesak, director, sales & marketing, let me sit in on a conference call presentation he was giving to a hotel in Washington, D.C. The project, to install digital signage to replace their reader boards and meeting room signs, was all encompassing of hardware and software. Four Winds creates content for clients and then trains clients how to use their content management software. Their targeted verticals are hotels, convention centers and higher education.
Golden – Cognitive manufactures thermal-direct and thermal-transfer printers (the latter uses a ribbon on untreated paper) which print labels, tags and tickets, primarily driven by bar codes. Barry Knott, president/CEO, explained that their target markets are retail, healthcare and warehouse/distribution centers.
Pueblo West – 24DVD, also known as Automated DVD Vending Machines (ADVM), has entered the DVD rental kiosk market. Karen Renz, president/CEO, admits they’re a latecomer, but they already have a deal with KOA to place them at their campgrounds. Their angle is that their kiosks cost about half of Redbox’s and can be placed in cafes, c-stores and non-traditional locations. Karen’s husband developed all the software that runs the kiosk. Interestingly, the DVDs are not in jewel cases, but come out singly with protective backings. A circular RFID tag on the DVDs lets the machine know when each has been removed and when it has been returned. New releases rent for $1.99 per day and after 6 months they become $0.99 per day. There is also the option to buy DVDs. Each carousel in the kiosk holds 150 DVDs. Kiosks can have up to four carousels.
Colorado Springs – RealTime Shredding focuses on one product and does it well: manufacturing a self-service paper-shredding kiosk. The industrial shredder can also shred CDs and floppy disks. It’s quite impressive. It is fast, quiet and safe (a hand cannot get caught in the shredder). I found it fun to use. After getting a thorough demo from Johnny Podrovitz, vice president business services, I sat down with the team, including President Amanda Verrie, to discuss ideas about locations for the kiosk – grocery stores, airports, apartment complexes, offices, etc.
Pantel Financial Centers
Colorado Springs – I met with Pantel’s Linda Upcraft, director of marketing, who explained that Pantel had been acquired by friendlyway recently. She said that friendlyway will be changing their name to Pantel within the next 30-45 days. Ken Upcraft is the president & CEO of the new company, which also acquired Ignition Media, a digital signage company. Pantel places and manages e-banking kiosks (bill payment, money transfer, pre-paid debit cards, and check cashing).
They are targeting the Hispanic market. The e-banking kiosk for the unbanked to be rolled out shortly is painted in red, white and green (Mexico’s flag colors) with instructions in Spanish and English to attract those customers. The screen on top will have advertising, creating potential advertising revenue in addition to fees. The kiosks will mostly be placed in retail locations like convenience stores.
Next stop: Upstate New York.
Monday, 24 July 2006
1. What is a kiosk? An electronic kiosk houses a computer terminal that often employs custom kiosk software intended to function flawlessly while preventing users from accessing system functions. Kiosks may store data locally, or retrieve it from a network. Some kiosks provide free, informational public service, while others serve a commercial purpose. Some of the most common kiosk peripherals include touchscreens, audio speakers, printers, credit/debit card readers and keyboards.
2. Are ATMs kiosks? Yes, but many research companies who track the kiosk industry do not count ATMs in their numbers unless the units dispense more than cash (also known as an advanced-function ATMs).
3. How many kiosks are deployed today? Over 800,000 kiosks have been deployed, not counting ATMs.
4. How many will be deployed in the next few years? By the end of 2008, it is projected that 1.5 million kiosks will be in deployment.
5. What businesses are using kiosks? Retail, transportation, financial services, photography, restaurants, government, etc. – virtually every segment of the public and private sectors.
6. Why are businesses using kiosks? Many reasons, but to name a few: improve the customer experience, speed, order/information accuracy and timeliness, and labor savings.
7. What are the most popular applications? Digital photography, product information, airline/hotel check-in, self-checkout, quick-serve restaurant ordering and bill payment.
8. How many companies (hardware, software, peripherals, components, etc.), are in the kiosk industry as a whole? 635 at last count.
9. What is the ROI for a business installing a kiosk? It varies based on the application and intent. Some recoup their costs in a few months; others take longer than a year. Informational kiosks that enhance the customer experience may not be intended to generate revenue or save money.
10. What is the benefit of using a kiosk for a consumer? Many reasons, but to name a few: giving the consumer a sense of control and increased speed and order accuracy. A growing number of consumers prefer to interact with a machine over a person.
Monday, 17 July 2006
People just prefer gifts from the heart. What better way to do this than personalize their memories and make gifts of them? Photo kiosks are now engineered to print everything from regular greeting cards to calendars and mugs.
The demand for these products grew as cameras (and camera-phones) became one of the fastest-selling consumer electronic devices ever, partly due to affordability and the proliferation of secondary industries like digital printing at retail and affordable home photo printers. Prices drop with each new model, paving the way for most households to own at least one digital camera. Upping the ante, camera manufacturers look to out-do each other not only on price, but on form and function as well, making the digital camera highly-appealing to consumers.
The ubiquity of digital cameras in almost every household and the rapid drop in flash memory dollars-per-byte mean that there is an amazing amount of pictures, and now video, taken at all sorts of events like weddings, graduations, birthdays and vacations.
Viewing JPEGs off of your PhotoCD and hitting the disc player’s ‘Next Track’ button repeatedly for about 30 photos may be tolerable, but beyond about 50 photos, you start to wonder if there is a better way to relive your Grand Canyon adventure.
Video, even the most amateurish homemade ones, has the ability to capture the ambience and excitement at any given event in a very different way from photos; from the moment of the kiss at the wedding, to a baby blowing out his birthday candles.
Added to this, the combination of abundant storage and the ability to “shoot and check” has created a generation of trigger-happy users who snap away and end up with hundreds of pictures at a single event, many of which may be pretty similar. We are now also observing, in that mix, a good measure of short video clips too. Many of these memories are precious and will end up being printed on a whole array of media. What’s sad is that these precious memories are often locked away after printing, or worse, incarcerated to a PhotoCD, never to see the light of day, nor shared and enjoyed.
Retailers and photo kiosk manufacturers are constantly finding ways to increase their revenue per square feet and per kiosk. Printing on T-shirts, mugs, calendars, greeting cards and other premium products and so on are all fine, but they all seem to lack some element of fun and interactivity. Photo Kiosk offerings must expand and video presents just such an opportunity
Kiosk users demand good quality prints, intuitive user interfaces and new innovative products that meet their evolving needs. In the younger demographics, we see video creation and public sharing taking off, in the likes of Revver and YouTube. However, the emotional satisfaction of sharing precious memories with loved ones in private will always be treasured, and video will increasingly be a medium of consideration as a complement to, not replacement of, photos. As people go to their neighborhood kiosks to process their photos, they are going to demand that the same kiosks be able to make something of their huge albums and also handle their videos too.
We are not spelling out the doom of photo printing. Users will always want to print some of their favorite pictures, but they will also want to archive all of the shots that they do not print for posterity. Burning these hundreds of pictures to a CD/DVD is a basic option, but to survive in an increasingly competitive photo kiosk space, kiosk operators need to provide greater value-add to increase margins. With the right choice of templates and music, these videos and pictures can be stitched into professionally created music videos. Once you have engaging user generated content, that’s when revenue generation will begin.
With video content, users can order a DVD to be burned, upload the video to a portal to be shared via the Internet, where their friends can place an online order for the same DVD and collect them in their neighborhood drugstore. Users can also opt to have this video saved in a more compressed format to be Bluetooth-loaded onto their mobiles, or PSP, or iPod video. This means that a single set of pictures and/or video can generate multiple products which can be ordered by more than one client in multiple locations, increasing throughput and of course, ROI.
We envisage more synergy between photo kiosks, the Internet and social networking sites. We strongly believe for the next few years, the inflexion point for photo kiosks’ growth will come from the increased demand for video solutions. Granted, there will be more photos taken and more prints ordered at retail kiosks, but margins for these products will be under a lot of pressure.
With the popularity of consumer portable video storage and playback devices, today, there are many places where users will want to fill up with their personal videos, so they can whip out that screen from their breast pocket to show a colleague a video of their baby’s first steps. We think the visionary kiosk maker will quickly jump in to be the centre of that ecosystem: take the photos and videos from users and create engaging content out of them, then repurpose it for the myriad devices where they can then be shared.
These value-added capabilities can benefit both the corner photo finishing shop and the large chain drugstores as they each fulfill this need on different scales and reach.
As a co-founder and chief opportunities officer of muvee, Terence See helped build muvee autoProducer, the world's first automatic video editing software. Terence is also instrumental in putting muvee's products on the world map, and negotiates licensing deals with other players in the consumer electronics space. In 2000, he became the 25th Singaporean to complete the grueling 226km Ironman in Langkawi.
Monday, 10 July 2006
In last month’s column, I asked why MP3 burning and ring tone download kiosks caught on in German McDonald’s, but not the United States. Murray Macdonald, the president and chief technology officer of Storefront.com, the company that created the software in those kiosks, explained his reasoning. We'll get to that in a moment.
But first, I pose another question.
Why don’t retail stores deploy systems in the aisles? Many of them, Target for example, have info kiosks deployed. Those units, already having a barcode scanner and sitting atop the same inventory database as the POS system, are just a card reader away from becoming little cashless sales devices. Handheld Products and VeriFone both now offer integrated mini-kiosks that can do this, but it’s been possible through other means for years. Corporate Safe Specialists manufactures a small-footprint kiosk just for this purpose, that unit includes cash acceptance.
I can think of two reasons why retailers might not be doing this: either they’re worried about security, or they think adding additional hardware, like card swipes and receipt printers, would be cumbersome compared to the savings realized by getting customers out of the store faster. What do you think?
The answer to last month’s question, “Why are MP3 and ringtone kiosks popular at German McDonald’s, when their U.S. deployment failed?”
In Germany, 24 separate order stations are built into the restaurant's tables and walls. They are located throughout the eating area making them almost impossible to avoid. Even patrons who have no intention of using the kiosks end up sitting within arms-reach while eating their meal. With the touch-screen devices located within such easy reach, they can't help but play with them. In such an environment, user engagement is a no-brainer. Once engaged, users create their order, then receive a printed ticket instructing them to proceed to one of the three nearby production stations to make an automated cash or credit card payment, and then collect their products.
For the U.S. pilot in Oakbrook, Ill., two large traditional free-standing kiosks were located beside the stairs on the main floor, while four futuristic sit-down stations were located upstairs. In both cases, a patron was required to stop at a non-traditional location and actively engage an unfamiliar device. Indeed, it was observed that the vast majority of patrons walked right past the kiosks with a tray of food in their hands, looking for a table. Once fed, most left the location without visiting the kiosks. The systems were largely ignored.
User engagement is critical. The same self-service application that succeeded in one environment failed in another largely due to hardware presentation and placement considerations. A kiosk environment must provide a practical setting in which patrons can comfortably engage the device. This was achieved at McDonald's in Germany, but not in the U.S.
Some customers are hesitant to engage new devices, and must feel comfortable before they do. As we have seen with photo kiosks, some customers do not want to stand out as the single user of an isolated standalone system, yet most customers will use the same system if multiple stations are available, or better yet, if everyone has one at their table. It would appear that there is a "safety in numbers" herd mentality at play. Once most patrons see others having fun tinkering with their tableside kiosk, they will follow suit.
Quick Service Restaurant patrons are willing to engage media kiosks while eating, but most are unlikely to go out of their way to engage.
Email Murray Macdonald at
Wednesday, 05 July 2006
Smart Power Systems, Houston – While Apollo 13 made common the catchphrase, “Houston, we have a problem,” Dana Davis, national sales manager of Smart Power Systems, told us about another problem in the self-service industry: power. Uninterruptible power supply (UPS), with an electronic power conditioner, protects against “unreliable and unsafe electrical surges and spikes,” according to their website. Davis explained to us how operating systems can lock up without this important protection.
TouchSystems, Hutto – North of Austin, we met with Timothy Boyd, vice president of marketing and operations for TouchSystems. The company was founded in 1996 by one of the original founders of touchscreen technology. In 2002, it spun off Touch International, which we later visited. TouchSystems develops the systems and monitors for customers such as Staples (price checker and loyalty fulfillment), Tootsie Roll (time clocks), and Miracle Ear (automated hearing machine).
Touch International, Austin – Touch International, with approximately 600 employees worldwide, is a manufacturer of touchscreens and touchscreen components for all types of touchscreen technology: capacitive, resistive, projected capacitive and infrared. At Touch, we got to know marketing and communications director Anne Ahola-Ward, who recently joined the firm after working for Apple Computer’s Marketing and Education Department. Though time did not allow us to tour the manufacturing facility, we could see the “clean room” through a glass window.
Wincor Nixdorf, Austin – The North American headquarters of this German-based company calls Austin its home. Well-known in Europe and throughout the rest of the world, the company is striving for the type of name recognition in the U.S. that companies like IBM and NCR receive. Wincor Nixdorf has 7,000 employees worldwide, with about 125 of those in the U.S. The company offers software solutions in addition to its line of POS systems, ATMs and self-service devices. Chad Wagner is now managing the company’s marketing for its retail division.
Pixel Magic Imaging, San Marcos – At Pixel Magic, Mark Melançon, director of product management, and Graham Eastap, VP & general sales manager, explained the workings of the 14-year-old digital imaging and photo kiosk solution provider. Pixel Magic launched its first photo kiosk in 1995 and is now ranked third in terms of U.S. installations. Founded in 1992 by David Oles and Dr. Henry Oles, the company received a majority investment in 2004 by Dai Nippon Printing (DNP) and Altech ADS Co. Ltd. With the proliferation and improvements in camera phones, Pixel sees a strong future in the photo kiosk business.
DynaTouch, San Antonio – After working with the U.S. Department of Defense for several years, DynaTouch has emerged as the kiosk provider of choice for all four branches of the military, plus the Department of Veterans Affairs, Indian Health Services and Internal Revenue Service. Terri McClelland, chief executive officer, explained that DynaTouch deployed its first kiosk in 1988, so it is no stranger to the business. The company now works exclusively with KIOSK (formerly known as KIS) to provide the kiosks that run on DynaTouch software. We viewed a demonstration on one of the “One Stop” kiosks created for the military and were impressed with the extensive amount of content managed.
MCM Corporation, San Antonio – MCM typifies the type of company that works behind the scenes making sure everything works. Managing a force of about 5,000 field technicians, MCM offers onsite repair, maintenance, remote monitoring and electronic dispatching and tracking of service calls. With only 30 employees at its headquarters, the company relies on its sophisticated management systems to be able to provide a response 24/7. One of MCM’s clients is Library Automation Technologies, which has developed a self-checkout system for library patrons.
In addition to the companies mentioned above, Bryan and I also met with two prospective members and three state associations representing the restaurant, travel and convenience store industries. Visiting with 12 organizations and logging over 400 miles on the road, it was an exhausting, but productive and enjoyable trip. Next stop: Colorado.