Tuesday, July 19, 2011

In-Store Kiosk-Expanding Product Assortment


Many Retailers have put in Kiosks at their Stores but Kohl’s has a Kiosk that provides a good shopping experience. But, does it tie into overall Store experience or does it fit the profitability bill?

What it does?
*  Allows you to look for an item that you don’t find (size,color,pattern etc.) in the Store
*  Allows you to order it from the Kiosk and get it shipped to your home
*  Shipping is Free
*  Allows scanning an item to get the SKU
*  Allows use of Cards for payment

Plus
* It has a big screen with very well organized UI layout
* Easy to use
*  Has a broader and deeper assortment to offer than in Stores
Enhancing Store Experience?
Kiosks should enhance the overall store shopping experience; it shouldn’t become a standalone sales channel. Firstly, it should be located at the entrance (Kohl’s kiosks are towards the back end of the store near the customer care counter) so that customers notice it as they enter and plan to use it. Secondly, signage in the Store should direct people to the Kiosks to find an item they are looking for or where it is located in the store and then Order it if its is not available.
But most importantly, Kiosks make sense in a Store that sees lot of traffic and people want to avoid standing in queues. In the Store I went to, the CSRs were free enough to take me to another counter and bill me there. So, why would I need a Kiosk? I would need it only if I saw something in Store which I really want to buy and get it shipped free.
In that case, it would be interesting to note how much was Kohl’s losing in stores as ‘lost sales’.


Is the Objective met?
*  The point that needs to be analyzed is that how many customers use a Kiosk in Store? From what I saw, there was no one shopping at the Kiosk during my 1hour visit to the outlet. Frankly, how many people would go to a Store and then order an item through a Kiosk? They would rather order it Online.

Does it fit the bill?
When Kohl’s would track its sales pattern on Kiosks, they would try to fill in the gaps and replenish items that are frequently out of stock in the store; unless that is the rational behind putting the Kiosks.
The point is that Kiosks are profitable if used for slow moving items that are not economical enough to be replenished frequently in Stores. And, a Retailer with a large product assortment in Store would really find it helpful and profitable; but not a clothier. Personally, I don’t see a whole lot benefit in putting Kiosks for Clothing, footwear etc.
So, Retailers can use Kiosk to easily expand their product assortment in Stores. They need to put items on display in Store so that customers can feel and assess the quality and then they can allow ordering those items through Kiosks. For example, there are many items in Wal-Mart which are put in stores for display purpose but are not in stocked. Classic example is the iPad when it was launched.

Conclusion
It is profitable to allow customers to order items not found in store but ‘creating’ such opportunities to be profitable needs a Retailer to expand its product assortment in Stores.  Or conversely, Kiosks that allow ordering in store (for out of stock items) should be in stores with large product assortment and large store traffic.
And, once Kiosks are placed in Stores, they need to enhance store shopping experience and not become a standalone sales channel or a promotional signage.

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