The Kiosk Invasion & Photo Retailer

Woodbury, NY-- Within the photo-imaging industry, the term "kiosk" brings a limited vision to our eyes. However, to the general public, the term is more likely to conjure up thoughts of self-service, ATM and airport check-in.


The Kiosk Invasion and What It Means to the Photo Retailer
by Burkardt and Don Franz

Photography Industry News

Photography Industry News

Photography Industry News

Photography Industry News

Admittedly, the proliferation of photo-imaging kiosks being installed is substantially greater than we could ever image for the number of minilabs, but they still form only a minor share of the overall kiosk population.

According to Francie Mendelsohn of Summit Research Associates (summit-res.com), there were about 1.2 million kiosks operating in North America at the close of 2008 (see Figure 1). Photofinishing News (photo-news.com) estimates that 116,000 were photo-imaging kiosks, representing 9 percent of the total, and more than half serve as input stations without an integral printer.

However, photo-imaging kiosks are the dominant category for countertop models. According to NCR, consumers are increasingly willing to use self-service devices. A 2008 Self-Service Consumer Survey by NCR indicated that: • 86 percent of U.S. and Canadian consumers are more likely to do business with companies that offer self-service--whether via the Internet, on a mobile device, at a kiosk or at an ATM. That's an increase of 12 percent from the 2007 study. •

The self-service revolution is real. Consumers demand it and want more; 56 percent of respondents said the likelihood of them using self-service has increased over the past year.

Whether banking, shopping, traveling or interacting with a healthcare provider, more consumers look for, and even expect, self-service as an "essential convenience" that improves their overall experience. • 66 percent of the respondents said the availability of self-service technologies creates a more positive perception of the deployer's brand. • Speed, followed by convenience and ease of use are the main reasons why respondents choose self-service over personal assistance, although the preferences vary in different industry segments (see chart at left). In recent years, corporations have shown an increasing willingness to deploy self-service devices, and customers have shown a similar eagerness to use them.

What does this mean to Photo Industry Reporter readers? We need to open our eyes to the "wide world of kiosks" and recognize both the opportunities and the threats. Tony Burkardt ([email protected]) has been attending the twice-yearly KioskCom show (held alternatively in New York City and Las Vegas) for the past two years. Despite the strong attendance by representatives from many different retailing fields, there have only been one or two "photo" kiosk companies exhibiting. Giant Food Stores offers its customers what most grocery stores do: food, household items, a deli, some specialty items and a pharmacy.

What it lacked was an approach to unite the various departments in a way that would make shopping easier, and less costly to provide for itself. Turning to self-service and integration for a solution, Giant Food has about six to eight interactive multifunctional self-serve kiosks in over 100 stores. Besides the traditional applications, you will find suggested wine selections with recommended recipes, deli and bakery ordering, coupon printing, personalized gift cards, on-demand music, movies, ringtones, product ingredients, product lookup and a product locator.

Sadly, at least from our industry's viewpoint, you won't find photo-processing services. Similarly, the company's website has most of these offers and also is devoid of any photo-processing information. This is just one example of how retailers are aggressively pursuing interactive multifunctional self-serve kiosk installations to educate and assist their customers, but photo processing is being ignored.

However, if retailers begin to understand and start adding comprehensive photo-processing capabilities to these multifunctional kiosks, they could become serious competitors. For independent photo specialty retailers, this might seem like a remote possibility, based up the lack of success among retailers. But when they ignore (is overlook a better term?) photo, it actually affects all of us. Consumers who frequent these stores and rarely visit the knowledgeable photo retailers are not learning about the various products they could make from their photo memories.

At a recent non-photo industry conference at which he spoke, Don Franz ([email protected]) asked the audience--about 75 people--how many were familiar with photo books. Only one person raised her hand, and she admitted that her husband was the one who had made the one photo book she had, and he had a difficult time creating it--three years earlier.

Our industry has changed significantly over the past three years in the ease of producing personalized photo products at a kiosk, but she was completely unaware of these improvements. How can we, as an industry, leverage the expansive capability of our photo-imaging kiosks to improve our sales and profitability? With the advanced technology of our kiosks and diversity of software at our fingertips, what can we do to promote higher margin products and services? Are we really aware of all the products and services we could be offering? Can we add services to our existing kiosks that will help drive our core businesses by adding incremental sales from existing customers and attracting new ones? Do we recognize that our customers, who entrust us to create keepsakes from their treasured photos, also may have business lives and need personalized books (without photos), presentations, catalogs, calendars, brochures, framing? We're all businesspeople; what do we use?

We asked Rick Glomb, vice president, Business Development, at Lucidiom (lucidiom.com), how the industry could increase its sales and improve its margins. "Our customers are looking for kiosk software and services that simplify social expression for digital imaging consumers. That means having a complete, yet flexible kiosk platform that's adaptable in order to incorporate new products that come to market and yet suits each retailer's particular needs, including interfacing with their current equipment.

Since local shelf and inventory space, as well as capital and training for on-site production systems, are limited, the Internet-connected kiosk opens upon an infinite virtual production capability, allowing retailers the opportunity for suggestive selling and letting customers see and order a wide range of personalized photo products." Lucidiom gathers statistics from all of their kiosks, to track market trends.

Despite the dismal economic outlook, year-over-year same store sales in November 2008 showed orders for photo books jumping 248 percent, calendar orders were up 181 percent and folded card orders rose 145 percent, although traditional greeting card orders fell slightly by 18 percent (attributed to the late Thanksgiving Day holiday). Previously reported year-over-year data for the month of October showed that photo book orders increased 576 percent, calendar orders 373 percent, orders for folded cards 460 percent and traditional greeting cards rose 172 percent.

Today's photo-imaging kiosk has become a dynamic marketing and sales tool for photo-processing retailers, one which should be continually evaluated and upgraded to meet the changing needs of the market and the retailer's business. It also represents an important bridge to the online market, with both Web-based and PC-residing software available to emulate the kiosk experience. This means a photo book order file can be started at home, transferred to a kiosk in your shop for suggestions and advice, if needed, or for collaborative development with a friend. By having the same products online as in-store, customers who might otherwise be wary of online ordering will find a familiar product line on the retailer's website once they venture online.

This product line "synchronization" also means streamlined production and assembly for the retailer. Consumers have come to discover how easy and fun it is to order from the kiosk, and having the same experience available online empowers the retailer to vastly expand the sales opportunity. The upcoming PMA trade show will give us all a chance to see the latest kiosk developments.

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