GoKiosk Kiosk Self-Service

Kiosk Case Study - marketing firm uses kiosks to qualify customers

Nice video from triauto enterprises showing how they use kiosks in automotive retail setting to qualify leads for dealership. [video]

Click here for video

Knowing the number of ups you generate from your marketing is essential. Gaining qualified leads with post-sale contact information can help you sell more vehicles AFTER your sales event. Tri-Auto provides both baseline and cutting edge marketing tools to help you track results.

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A Marketvisionâ„¢ sale provides:

1. Professionalism: Kiosk brings an air of sophistication that just a prize banner cannot.

2. Bonding and Rapport: Controls the customer traffic better than a prize banner. No more just grabbing a gift and running out!

3. Closing Tool: Call-to-action voucher turns more "gift grabbers" into buyers.

4. Automatic Customer Follow Up: Our data collection creates the ability for post-sale follow up to your customers that came in during the sale but did not purchase. Sell a few more cars from the follow up letters included in Marketvisionâ„¢!

5. End of Sale Reports: For analysis to improve the marketing and sales performance of future sales:
* Salesperson Tracker
* Promotion Analysis
* Close the Sale Report
* Customer Name/Address/Phone Report
* Target Customer Map and Zip Code Ranking Report

Toll-Free Call Tracking

Know exactly where your prospects are calling from. Our toll-free tracking numbers allow you to:

* Understand when people first start calling, so your team can be ready.
* Know how many people called, providing you a start on the success of your sale.
* View the zip codes the prospects are calling from, so you can target those areas in the future.
* Have the phone number they called from to make follow up calls.
* Record every call to uncover training opportunities for specific salespeople.

Internet Lead Generator

Collect hot leads for immediate follow-up.

* Buyers often prefer to submit their credit information to a third party from the privacy of their own home.
* Approximately 83% of people who visit one of our credit websites complete an application.
* Hot leads with complete credit applications are sent directly to you through websites maintained by Tri-Auto.

Fujitsu to Strengthen Self-Service Solutions

Fujitsu Transaction Solutions Inc. today announced that it has formed a self-service organization to develop and market comprehensive self-service solutions and services to the retail industry, among others.

Fujitsu to Strengthen Self-Service Solutions

Peter Wolf, previously the company's vice president of marketing, has been appointed vice president of self-service strategy, and will lead the overall strategic direction of the group. Wolf joined Fujitsu in 2006 with a strong background in customer-centric retail technology strategy and solution development.

Fujitsu's Pervasive Retailing(TM) Framework has led the industry in facilitating customer interactions through application interoperability, seamless integration and relentless cost reduction. This unit will build on that framework to deliver end-to-end, self-service solutions by creating and combining several hardware, software and services offerings, including the use of self-checkout systems, self-service kiosks, mobile computing and more. Its goal is to develop an interoperable retailing environment with other store and enterprise systems, thus empowering retailers, store associates and customers.

"Fujitsu has always had a strong reputation as a self-checkout and self-service hardware provider, and we want to expand upon that success by combining all of our self-service solutions under a single banner," said Ed Soladay, chief operating officer at Fujitsu Transaction Solutions. "We want to develop and provide a total self-service solution for retailers in multiple segments, and we believe Fujitsu has a strategic advantage to achieve that goal."

Bruce Kopp, previously vice president of sales and client management, also will assume responsibility for the marketing function as senior vice president of sales and marketing.

Kopp joined Fujitsu in 2006, and has more than 23 years of management and sales experience in the retail industry. Kopp was an executive of IBM's Retail Strategy team prior to joining Fujitsu.
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About Fujitsu Transaction Solutions

Fujitsu Transaction Solutions Inc., a wholly owned subsidiary of Fujitsu Limited (TSE: 6702), collaborates with retailing companies to relentlessly reduce their costs and facilitate consumer interactions that improve their profitability. Fujitsu's Pervasive Retailing(TM) approach enables companies to minimize the time; cost and risk of creating interoperability between disparate applications and devices that support a multitude of consumer touch points. Fujitsu's offering includes solution software, point-of-sale store technology, U-Scan(R) self-checkout systems, U-Serv(R) self-ordering systems and multi-vendor lifecycle services. Customers include Canadian Tire, Chevron Corporation, Hallmark, H-E-B, Kroger, Loblaws, Nordstrom, Payless ShoeSource, Regal Cinema, Staples, Stop & Shop and The TJX Companies, among others. Web site: us.fujitsu.com/retailing.

Retail - Borders Unveils New Concept Store

Borders announces new concept store open in Michigan which includes new "Digital Center". You can download and/or listen to music (Mix&Burn), research your genealogy, personal publishing (that's new...) and also photo printing. Release includes pictures and video.

BORDERS UNVEILS FIRST CONCEPT STORE - With Video

BORDERS UNVEILS FIRST CONCEPT STORE
Breakthrough retail concept incorporates digital and Internet features to create a uniquely satisfying and interactive customer experience

ANN ARBOR, Mich., Feb. 14, 2008 / PRNewswire / – After more than 18 months of development and testing, Borders will unveil the first of its highly anticipated new concept stores when grand opening festivities kick off Feb. 22 at its new store on Lohr Rd. in Ann Arbor, Mich., the company's hometown. The 28,900-square-foot concept store—the first of 14 the company expects to open nationwide this year—represents a significant enhancement over existing Borders stores inside and out and fulfills the company's mission to be a headquarters for knowledge and entertainment.

"This is a completely new shopping experience that sets Borders apart from every other store," said Borders Group Chief Executive Officer George Jones. "We've stayed true to what our customers have always loved about Borders—deep and intelligent selection, knowledgeable staff, and a comfortable, welcoming atmosphere. Yet, we've brought a fresh new look and an exciting interactive dimension to the store with a Digital Center where customers can do everything from mix and make their own custom CDs, download books and music, publish their own books, explore their family history, and create photo books—all without being computer experts because we have trained people there to help every step of the way," he said.

"In addition, we've put a strong focus on popular categories—including Travel, Cooking, Wellness, Graphic Novels and Children's—by incorporating digital options and the online world, making these sections of the store interactive destinations where customers can not only shop our vast selection of books, but also take advantage of computer kiosks featuring recommendations from our expert buyers, related video content including interviews with experts and authors, and much more. In addition, in select destinations, there are large in-section LCD screens broadcasting a depth of content featuring some highly recognizable names in these subject areas, as well as Borders' own exclusive programs," Jones continued.

"Overall, this new concept store is a key part of our long-term strategic plan. We set out to differentiate Borders and give customers a reason to choose us over other retailers and we've achieved that goal spectacularly with this new concept store. And, once we've launched the new Borders.com, we'll be able to truly deliver on our cross-channel retail strategy including the option for customers to access the site in our stores to view wish lists and conveniently order from millions of titles for delivery to their homes within two days. I'm proud of what we've created and am confident that customers will really embrace it."
Modern Architecture

Beginning with the exterior of the concept store, shoppers will see that this new Borders is a bit bolder with a modern fascia featuring enormous windows, a large illuminated and underlined red Borders logo, and a louvered construction that evokes images of the pages of a book. There is a cafe with an adjoining outdoor seating area for warm weather and dramatic up-lighting and exterior fixtures that make the store stand out against the evening sky, providing a welcoming glow.
Fresh New Interior

Once inside, customers will immediately recognize that a new and exciting experience awaits them. Curved feature tables highlight the latest book titles front and center and a special illuminated stand spotlights noteworthy items that customers simply cannot miss. A large round rotunda with three skylights fills the space with light, and the warm, neutral color scheme, cozy seating, and walnut- and ash-stained fixtures suggest comfort and an invitation for shoppers to stay as long as they like. Throughout the store, there are large, illuminated drums suspended from the ceiling that feature dazzling graphics and guide customers to destinations within the store. Overall, the layout remains conducive to exploration while also being extremely intuitive for customers to navigate with ease.
Digital Center

Dramatically distinctive against the neutral backdrop of the store is a new Digital Center marked by a three-dimensional, 15-foot illuminated fixture and sign package. Within the Digital Center there are multiple computer kiosks and stations dedicated to unique new services including music and book downloading as well as mixing and making custom CDs through "Borders Digital Music," which features millions of titles to choose from.

Customers interested in tracing their roots can access "Borders Genealogy Services" provided by Ancestry.com, and because many Borders customers are authors looking to publish their own work, the Digital Center also includes "Borders Personal Publishing" powered by Lulu.com. Some customer-written books may eventually be sold in Borders stores and select customer authors could even host in-store signings. Photos are important to many Borders customers who can use "Borders Custom Photo Books" for special projects featuring family and friends, and they can print their photos in the store via "Borders Digital Photo Printing."

Throughout the Digital Center, there are seats at the various computer stations where customers are encouraged to sit and take their time working on their projects. Importantly, Borders knows that not all customers are computer experts, so the company is staffing the Digital Center with trained, dedicated personnel ready to guide customers of any technical level through the process to achieve their project goals.

In addition to the Digital Center, Borders has retained its popular computer information stations—"Borders Search"—to help customers locate titles within the store and outside of the store and learn about in-store events, among other services. As in existing Borders stores, these stations are located throughout the concept store allowing customers to help themselves.
Destinations: Travel, Cooking, Wellness, Graphic Novels and Children's

Certain categories within the new Borders concept store—Travel, Cooking, Wellness, Graphic Novels and Children's—are so popular and rapidly growing that Borders has designated them as special destinations within the new concept store—giving these categories their own "shop within a shop" look and feel. For example, in the Travel Destination, customers can not only choose from more than 3,200 book titles, but will also find related items such as maps, GPS navigation systems, the Reader Digital Book from Sony®, and portable DVD players that customers can use on their travels. Within the section, there is an interactive computer kiosk where customers can research, plan, and even book a trip in the store. On the kiosk, there is a "Borders Featured Destination" highlighting various U.S. and international locations and customers can use the feature to learn everything about the locale they plan to visit, including Frommer's favorite experiences and upcoming events. For featured destinations, Borders also makes available on the kiosk an article written by travel expert Pauline Frommer who offers additional advice and tips for planning a trip to the destination.

In addition, the kiosk within the Travel Destination also features a "Borders Trip Recommender," teamed with Whatsonwhen and Frommer's, to provide customers with a list of suggested travel destinations based on preferences and criteria set by the shopper using a brief questionnaire regarding the type of trip desired and other parameters. The "Borders Trip Recommender" suggests potential destinations, and by clicking on recommended locations, customers will access related book, DVD and other resources selected by Borders' expert buyers to enrich the travel experience. Using the "Search and Book" feature on the kiosk from Sidestep.com, recently acquired by Kayak.com, customers can even book an entire trip online from the in-store kiosk. Within the Travel Destination, the new concept store also offers customers travel programming on a large LCD screen that features a mix of travel tips, guided visual tours, author interviews, and nature programming from locations around the world.

Similar deep selection and various interactive opportunities are available in the Cooking and Wellness Destinations, where customers can watch topical programming on the large in-section LCD screens and use the computer kiosks to learn about recommended titles and receive advice from the experts. In the Graphic Novels Destination, there is an amazing selection of titles as well as related gift items and even software that customers can purchase to create their own comic books.

In Children's—the largest destination with over 9,000 book titles as well as music CDs, DVDs, toys, games and puzzles—kids and their families will be impressed that Borders has divided the section into sub-categories including infants/toddlers/preschoolers, beginning readers (age 4-8), and early readers (age 7-9), which cater specifically to the very different interests and developmental levels of those age groups. In addition, in the new concept store, Borders has relocated the independent reader (age 10-12) section from Children's and given it its own separate area to appeal to older children.

Visually, children and adults will be captivated by a massive mural that spans three walls above the book shelves in the Children's section. Created exclusively for Borders by Australian author and illustrator Colin Thompson, the mural features incredibly intricate and colorful images of castles, underground cities, and flying books, among other images. Two large cut-out hot air balloons are suspended from the ceiling in the Children's section, adding to the special experience offered to Borders' youngest visitors.

"Overall, customers need to know that there is something you offer as a retailer that they cannot find anywhere else," Jones said. "That's just what we are doing with these unique destinations within our concept store. We are putting a stake in the ground when it comes to these categories by making the assortment and the experience so interactive and compelling, that customers will bypass competitors to come to us to shop within these key categories as well as the rest of the store."
LongPen

The new Borders concept store in Ann Arbor is the first retail location in the nation to feature a revolutionary new technology called LongPen™. LongPen makes it possible for Borders to host book discussions and signings with authors, as well as music events and appearances by celebrities who are not physically present in the store. Video conferencing allows the authors and performers to connect personally with their in-store fans; seeing and speaking with each other in real time as they would in person. Yet, amazingly, LongPen also allows the authors and performers—who may be at home or at another location—to personalize and autograph their books, CDs and DVDs with an authentic signature for customers in the store. It is made possible using an electronic signing implement used by the authors and performers that sends an Internet signal to another signing implement in the Borders store to precisely duplicate what the author or performer is writing. Piloted initially only in Ann Arbor for potential rollout in other locations, LongPen will allow Borders to greatly expand its event offering and help unite fans with their favorite authors and performers even when they are not there in person.
Community

All Borders stores nationwide—with a multitude of free in-store events as well as outreach and sponsorship efforts—are a vital part of the communities they serve. At the concept store in Ann Arbor, Borders has included a specific community space with a unique "pull-down" stage to accommodate everything from local book discussion groups and music performances to national author signings and children's events.

"Borders embraces our role as a vital, contributing member of the community that reaches out to connect people with each other and with the things they are passionate about," Jones said. "Our concept store design takes this community commitment even further by providing so many interesting ways for our customers to explore their individual interests and also interact with each other. It's what we've been known for all along, but now we've advanced the idea and truly created something unique that we believe will ultimately redefine our business," he concluded.
About Borders, Inc.

Borders is a subsidiary of Borders Group, Inc., (NYSE: BGP) a $4.1 billion global retailer of books, music, movies, periodicals and gift and stationery items with over 30,000 employees and more than 1,100 stores worldwide primarily operating under the Border® and Waldenbooks® brand names. For more information, visit www.bordersgroupinc.com.

People in Retail - JCPenney person to head shop.org

JCPenney new business development VP Richard Last has been tapped to be the chairman of shop.org, the digital arm of the National Retail Federation, the trade group said Wednesday.

Penney VP to head online shopping trade group - Dallas Business Journal:

JCPenney new business development VP Richard Last has been tapped to be the chairman of shop.org, the digital arm of the National Retail Federation, the trade group said Wednesday.

Last, who oversees jcp.com, is part of a new executive committed for the group. He replaces Elaine Rubin, president of Ekrubin Inc., who had been chairwoman for the past eight years.

Jupiter Research retail analyst Patti Freeman Evans is shop.org's new vice chairwoman.

Shop.org, a division of the National Retail Federation, is the world's leading membership community for digital retail. It was founded in 1996 and counts the country's 10 largest retailers as members, and more than 60 percent of the top 100 online retailers as members.

New Marketing Tactics in Traditional Retail

Story today on WSJ --- Customer Testimonials: It is one of a number of strategies that retailers are borrowing from the Internet these days. For example, alternative payment services such as eBay Inc.'s PayPal and Bill Me Later Inc. have now become available in the physical world as cards that can be swiped at checkout or a line of credit that can be tapped at store kiosks. More stores also feature kiosks that promise Web-like comparison-shopping technology, online gift registries, and product "configurators," or software for manufacturers that want to customize products. LINK

GM Kiosks Shown at Tradeshow

MxN Middle East announced that it has just completed the supply of self service Kiosks to General Motors Middle East that were launched at the 9th Middle East International Motorshow held in Dubai. Photo of units provided.

The kiosks featured a survey that once completed would provide the customer with an opportunity to win a free car of their choice.

'In today's Digital world, solutions like the one we have recently supplied to GM will increasingly become the norm. We provided them with a full turn key solution including the hardware, content and technical support.' said Raad Raad, Managing Director of MxN.

The GM Kiosks were the first of their kind at the Motorshow in Dubai. Customers were asked to complete a short survey and in exchange they would get a voucher for a gas card or dealership services, with the purchase of a GM vehicle if made before December 31st, 2007.

They were also entered into a draw to win the GM vehicle of their choice.

'We are really pleased with being the first to rollout this kind of technology at the Motorshow. This step is in line with our constant quest for innovation and use of the latest technology ' said Shereen Harris, CRM Manager for General Motors Middle East.

MxN is one of the only companies in the region to be able to provide a full turn key solution for its customers. The delivery of the GM kiosks is just another example of MxN's commitment to maintain this dominant leadership position in the area of Digital Media.

'In choosing MxN one of the determining factors was their ability to deliver on all aspects of this project from hardware and technology to content, including round-the-clock support to ensure smooth implementation.' continued Shereen.

The kiosk program will now move on to the Kuwait International Automobile Exhibition to be held at the Kuwait International Fair Grounds in Mishref, Kuwait from November 28th to December 4th 2007.

About General Motors
General Motors has been the global automotive sales leader for 75 years. Founded in 1908, GM today employs about 284,000 people around the world. With global headquarters in Detroit, GM markets its cars and trucks in 33 countries.

In 2006, 9.1m GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall. It marked the third time (2006, 2005 and 1978) GM has sold more than 9m vehicles in a calendar year.

GM has been operating in the Middle East since the 1920s. GM's vehicle brands sold in the region are Cadillac, Chevrolet, GMC, Hummer, Opel and Saab supported by a unique set of customer-focused services. GM parts and accessories are sold under the GM Parts and ACDelco brands. The regional office in Dubai covers the company's operations in Bahrain, Iraq, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, UAE and Yemen.

In 2006, GM sold 140,509 vehicles in the Middle East, representing a 24 percent increase over figures recorded in 2005, and the company continues to introduce pioneering programmes in the region. One example is GMs' unique Nationalisation programme in the Kingdom of Saudi Arabia, which has been officially recognised by the Saudi government as a benchmark for training young nationals.

More information on GM and its products can be found on the company's consumer websites www.gm.com and www.gmarabia.com.

For more information:
Saada Hammad
Communications and Public Relations Manager
General Motors Middle East
Tel (+9714) 3143350

About MxN
MxN provides technology, consultation and content services to clients and customers throughout the Middle East, Europe and Asia. MxN has its corporate headquarters in Dubai's prestigious Dubai Media City. MxN focuses on providing innovative, robust and flexible technologies that fuel the digital communications industry. MxN delivers solutions giving its partners and clients the ability to effectively communicate with their targeted audiences providing customizable digital marketing tools that include first of its kind features, such as multi-zone video and multi-channel audio playback.

The MxN Network is powered by the most robust, flexible and scalable digital content management softwares in the market today. MxN designs and develops world class technologies that fuel the emerging digital communications industry. As this industry spans over the reach of many others, we understand that each business has its own individual needs. This is why we have developed all our products using flexible, modular architecture in order to provide powerful functionality with the ability to quickly deploy, modify, and upgrade your systems.

For information or opportunities in the region please contact:
Raad Raad
Managing Director
Middle East and North Africa
www.mxnmena.com

Product customization and in-store visualization Kiosk self-service

Nice article by Andrew Kasner of Fry...In a merging of the online and in-store worlds, some bricks-and-mortar stores are beginning to use employee-assisted kiosks to show the final product before a special, customized order is placed. This twist on traditional retail affirms a shopper’s preference to see the finished product before purchasing and provides an online experience in the store.

Product customization and in-store visualization

Product customization and in-store visualization

By Andrew Krasner, Fry Inc.
October 15th, 2007
Andrew Krasner

Some multichannel merchants say customers really need to touch or try on certain products before purchasing, and those experiences can’t be replicated online.

However, with retailers offering customized products, the Internet can be an even more effective multichannel tool to provide a visualization of the product.

In a merging of the online and in-store worlds, some bricks-and-mortar stores are beginning to use employee-assisted kiosks to show the final product before a special, customized order is placed. This twist on traditional retail affirms a shopper’s preference to see the finished product before purchasing and provides an online experience in the store.

Traditionally, retailers selling personalized products such as wedding invitations carry large sample books that show how certain colors and fonts look on various invitations. Retailers had no way to show what the final product would look like.

The next generation of the traditional in-store kiosk allows sales representatives to use the store’s e-commerce site to demonstrate the visualization of a custom product. The transaction is assisted by a sales associate, and the order can be placed online through the kiosk.

A sales representative can show customers how their wording in the chosen color and font looks on the specific invitation they’ve selected. With this use of technology, the buyer doesn’t have to wait for a proof and can immediately approve the design on the screen. When the order is placed online at the kiosk, the customer can have access to tracking numbers to monitor the shipment.

Using customization takes retail out of the commodity game. A merchant may sell a bathrobe in a nice color, but shoppers can go online and find the least expensive one by searching several sites.

When a retailer offers customization, such as printing, engraving and embroidery, it becomes the only place to find that unique product.

And retailers are beginning to offer even more personalization options including photo uploads, custom color combinations and licensed characters on everything from baby strollers to neckties.

Retailers that connect their in-store kiosks with their e-commerce sites will help their sales staff improve a shopper’s multichannel experience by providing the personal experience of an in-store environment coupled with the online benefits of visualization and long-distance gifting.

Andrew Krasner is director of strategic services at Fry Inc., Ann Arbor, MI. Reach him at akrasner@fry.com.

Retail Kiosks -- When a website ain't a website?

Here's a new spin on an Internet kiosk...Consumers checking prices at kiosks in the Best Buy store think they are browsing main Best Buy internet site but instead are browsing different one (with different prices).

'Best Buy'? Lawsuit Says 'Bait-n-Switch'

Lawsuit Claims Best Buy Isn't Living Up to Its Name
Connecticut AG Files Suit Claiming In-Store Kiosks Part of a 'Bait-and-Switch' Scheme
By DANIEL ARNALL
ABC News Business Unit

May 24, 2007 —

The Connecticut Attorney General is taking electronics super retailer Best Buy to task for a system he says is a "bait-and-switch scheme" that deceives customers.

According to a lawsuit announced today, customers were lured into Best Buy stores by prices quoted on the company's Web site, only to find the items at higher prices once they got to the store thanks to a lookalike Web site available only in the store.

The issue came to light after a columnist for The Hartford Courant wrote about a man who found a laptop on BestBuy.com advertised for $729.99.

When the man went to the store to look for the computer, an employee checked a Web kiosk that appeared to be the company Web site, only to find the same computer for $879.99.

"Best Buy used in-store kiosks to conceal lower online prices and renege on its price match guarantee," said Attorney General Richard Blumenthal in a press release. "Consumers seeking bargains were led to believe that lowe

Kiosk Case Study : Personalized Retail offers

Pay By Touch announced their Smart Shop this week. It generates offers personalized to the consumer. Oldtimers to the industry will perhaps think of Sainsbury and Catalina. We saw it noted out on Interactive Kiosk News first. It's unusual in that they have an iteration where there is no lcd. We've included a picture of the unit.

Pay By Touch, the biometric payment company that let's you charge with your fingerprint, has announced that it's putting all of that personal data it collects to good use by installing loyalty kiosks at some of its supermarket clients' locations.

The system, dubbed SmartShop, provides participating shoppers with relevant discounts and promotions based on purchase history, and is being pitched as the quick and easy alternative to clipping coupons. Here's how it works (courtesy of the press release they put out):

1. When shoppers enter the store, they simply scan their finger at the SmartShop kiosk to get personalized offers based on their purchase history.[2]

2. Shoppers receive an 8 ½ x 11 print out with 12 to 16 customized offers for the products they buy most, and then head into the aisles to shop.

3. Shoppers scan their finger again at check-out to automatically redeem their offers. They do not need to bring the print out; no paper coupons are required.

The first grocer to trial the system was Green Hills Market of Syracuse, New York, who apparently found some value in it:

"The SmartShop service has been extremely popular, and shopper participation is already impacting 50 percent of store revenue," said Gary Hawkins, CEO, Hawkins Strategic and Proprietor of Green Hills Market.[3] "We have seen offer redemption rates exceeding 20 percent. Of the customers enrolled in SmartShop, who also shopped last year during the same period, their shopping visits have increased by 10% per week."

"Most importantly," Hawkins added, "SmartShop is driving a significant increase in revenue in a time of new market competition from big box stores. It has given us the tools to compete more effectively and not only retain customer loyalty, but attract new customers."

We can assume that the overall effect has been positive, since many grocers assume -- and in fact count on the fact -- that only a tiny fraction of printed coupons will be redeemed. But I'm sure that if these kiosks prove to be popular those models would be revised. Typically, though, when customers frequent your store more often and buy more product, there's a way to profit from it, even if you are giving out more discounts in the process.

NRF Announcements -- Circuit City and Kiosks

At NRF show this week one of the Circuit City VPs talks about building 200-300 more stores and showed a video clip of kiosk that is installed in 50 stores now and assists the customer in his buying decision.

Circuit City to roll out new prototype store - Jan. 15, 2007

Circuit City sets smaller store, new kiosks
Consumer-electronics retailer testing new store type, will open 300 new stores in next two years: executives.
By Parija B. Kavilanz, CNNMoney.com staff writer
January 15 2007: 8:06 PM EST

NEW YORK (CNNMoney.com) -- Circuit City will roll out new, smaller stores in June that showcase consumer-friendly innovations such as in-store kiosks that enable "real-time" chats between customers and the retailer's Firedog technology support staff, CEO Philip Schoonover announced Monday.

Schoonover unveiled the technology during his presentation to an industry gathering at the National Retail Federation's annual conference in New York.

John Mulleady, Circuit City's vice president for real estate and construction, said he's now working on building 200 to 300 new stores in the next two years - a jump for a retailer that has been building 10 to 12 stores a year, according to Reuters.

A short video clip presentation showed a Circuit City (Charts) customer struggling to decide whether he wanted to wall-mount his new flat-panel TV or put it on a stand. He walks over to the kiosk, touches the screen and a Firedog staff member pops up on the screen to offer "live" assistance. After a brief Q&A, the customer makes his decision.

Circuit City, the No. 2 electronics retailer after Best Buy (Charts), has already deployed the system in 50 stores and will be adding the kiosks to more locations, including new prototype stores that will roll out in June, Schoonover said.

The latest store format will be smaller - approximately 20,000 square feet - compared to the typical 30,000- to 35,000-square-foot existing Circuit City stores, Circuit City spokeswoman Jackie Foreman told CNNMoney.com.

In addition to the kiosks, the retailer will also arm employees with new wireless "tablet PCs." Schoonover said the tablet PCs act as a "guided selling tool" to help employees to better understand customers' needs and help decide on product choices - what type of flat screen TV they want, for example.

Using the PC tablet, employees can quickly sketch a sample diagram of the customer's living room and enter specifics such as size of the room and height of the walls. Based on other variables such as brand preference and price, employees can then recommend the best options for the customer.

"This kind of technology and innovation, we believe, can delight our customers and maintain sustainable growth despite the challenges," Schoonover said, referring to the company's surprise third-quarter loss, which he blamed on the cut-throat holiday price wars on consumer electronics, especially flat-panel TVs.
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"We believe technology is a key enabler for us and our multi-channel strategy from here on. Our goal is to be at the forefront of change," he said.

While Circuit City has stores in Canada, Mulleady said "not today" when asked if the retailer was looking at additional international expansion. Mulleady, a former Wal-Mart Stores Inc. (Charts) executive, said many U.S. retailers run into problems internationally by not understanding the local markets.

"They are trying to repeat the model that works in the United States overseas," he said.

He said success depends on finding the right local partner, and often companies need to be able to absorb many years of losses to succeed abroad.

Mulleady made the comments as part of a panel discussion on retailers' real-estate strategies.

James Bersani, Limited Brands Inc.'s (Charts) executive vice president for real estate, also spoke on the panel. The two executives said retailers are constantly testing different store formats to accommodate ever-changing customer tastes and shopping patterns.

Bersani said that 80 percent of Limited's roughly 3,500 stores are mall-based and as such, the retailer keeps a close eye on the health of the malls it occupies. With no new malls being built, he said the healthiest ones are those that reinvest in and upgrade their properties.

While Limited is buying Canadian lingerie retailer La Senza Corp., profits are a reason Bersani said the retailer has not opened up its stores internationally.

"We all want sales growth," he said, "But we want profitable sales growth."

Retailers, Internet Service Kiosks & Multichannel

Third Floor: Slacks, Shoes, and an Internet Kiosk
J.C. Penney made one billion dollars in online sales last year, outperforming competitors like Wal-Mart.

Source Article

NEW YORK (AP) -- J.C. Penney Co. may have steered through a turnaround, but there are shoppers like Janice Bernache who still think of the store as a place where ''mother used to shop.''

But as the 27-year-old Manhattan resident peered through the retailer's temporary showcase store in Times Square, she was pleasantly surprised.

''It looks really young,'' said Bernache, eying bikinis, metallic skirts and men's slim jeans.

The three-level showroom -- which showcases the retailer's store brands in home furnishings and fashions -- allows customers to shop at any one of 22 Internet kiosks. The store, open through March 26, is part of an ambitious campaign to convert trendier, more affluent shoppers like Bernache into Penney's fans.

The Plano, Tex.-based department store is using its online business not only to drive store traffic, but also as a key tool to polish its image among new customers, many of whom still think of the chain as dowdy. With 50 percent of America's households not having shopped at Penney in the past three years, executives see a lot of untapped opportunity.

''We are excited about the turnaround, but we know we are not reaching all of our customers,'' said John Irvin, head of J.C. Penney Direct, which comprises its catalog and Internet businesses. ''We think our message needs to get out not only to our existing customers, but to the new customers.''

The retailer views its online site as the ''hub'' of its overall business, which generated sales of $18.8 billion last year. Penney passed the billion dollar mark in online sales in its recent fiscal year, surpassing e-commerce sites from discounters and department stores like Wal-Mart Stores Inc.

Online shoppers tend to be more affluent and younger that the store shopper. The median age for Penney's online customers is 45 years old, compared to 49 for its store shopper and over 50 for its catalog customer, said Tim Lyons, a company spokesman. He noted that the median household income is 10 percent to 15 percent higher than that of the online and catalog shopper, whose income ranges from $35,000 to $80,000.

Penney's online site offers pricier items that are not available in the store.

Penney's turnaround began in late 2000, when the then Chief Executive Allen Questrom launched an effort to upgrade stores and merchandise. He sold off the Eckerd drug chain, closed underperforming department stores and spruced up the remaining Penney's stores.

In its fourth quarter, Penney reported a 65 percent profit increase over the same period last year and posted its 11th consecutive quarterly gain in same-store sales, considered the best indicator of a retailer's health.

Chairman and Chief Executive Myron E. ''Mike'' Ullman III, who joined in late 2004 from Macy's and the luxury-goods business, is trying to position Penney as more upscale and upgrade its collection of store-label brands. The labels, which include names like fashion designer Nicole Miller and home furnishing maven Chris Madden, account for 40 percent of sales.

Customers will see more changes in the stores and online as Penney further blends both businesses.

''Penney's is moving fast into this new frontier of multichannel consumer retail experience,'' said Richard Hastings, retail analyst at Bernard Sands. ''People are experiencing the brand in a dynamic way.''

Penney is adding touch screens to its cash registers which allow sales staff to order online for customers who couldn't find what they were looking for at the store. The rollout in half of its 1,000 stores is expected to be complete by year-end.

The retailer is also testing Internet kiosks as well as monitors in a selected number of stores that show looks that can be found only on the Internet, according to Ken Hicks, president. The Web site now allows customers to search for fashions according to their lifestyle, from trendy to traditional. Shoppers can also click on streaming video of Penney's new ads -- which launched on Sunday's Academy Awards broadcast -- to buy any of the featured fashions.

With 250,000 different items on line, the site offers a deeper selection in such categories as maternity wear, children's furniture and big and tall clothing. In children's furniture, for example, a typical Penney's store only offers six choices of children's beds; online, customers can find over 100 choices.

''Penney's is definitely at the forefront of adopting all this new type of technology,'' said Heather Dougherty, an analyst at Nielsen/NetRatings, an Internet research firm.

Meanwhile, Wal-Mart -- which expects to post a 40 percent increase in the number of visits to its site this year over last year -- is making some big strides too. The world's largest retailer, which does not break down its online sales figures, is always evaluating such technology as Internet kiosks and touch screen monitors at cash registers, said Raul Vazquez, vice president of marketing at walmart.com.

At Penney, a big challenge ahead is to get store associates to actively pitch to shoppers all three ways to shop. At a Penney store in Queens, N.Y., placards throughout the store encouraged customers to check out offerings online and in the catalog. But when a reporter approached a salesman in the furniture area about children's furniture, he just replied: ''We don't sell them.''

It was only after being pressed a few times that he did encourage the shopper to check online.

Multi-Channel Shoppers Create Opportunity for Self-Service Kiosk Providers

Interview with Alex Richardson on the next wave of opportunities for kiosk deployers. Government, Voting and yes, Multi-channel retail returns...

Ask Alex: Expert Says Kiosk Execs Must Adapt and Innovate

Meeting Demands of Multi-Channel Shoppers Create Opportunity for Self-Service Providers

What should kiosk-related companies be focused on in 2006? There�s no better expert to answer that question than Alex Richardson, former CEO and Founder of Netkey and currently managing director of a consulting firm, Selling Machine Partners. Richardson has followed the fortunes of various self-service technologies for two decades, and is frequently sought out as an advisor by companies considering self-service initiatives.

KioskCom.com picked his brain on a variety of issues facing kiosk executives in 2006.

KC: What should kiosk executives do to accelerate business in 2006?

AR: Turn off your computer, get out of your office and visit at least 25 different retail and public locations. Refresh your memory about what it feels like to be a customer and observe the Customer Experience at a variety of retail locations.

What I left Netkey in the fall of 2003 to start Selling Machine Partners, I made it a point to do all the grocery and holiday shopping for my family and visited about 50 retail locations (and Web sites). I observed how frustrated consumers are as they walk down the grocery store aisle, looking for a can of lime juice. Count the number of seconds it takes for the average coffee and doughnut shop to deliver a simple cup of coffee. See if the checkout clerk makes eye contact, smiles or complains about a co-worker.

The Net-Net was that the consumer experience for both online and bricks & mortar merchants is dreadful and still ripe for rapid improvements through the use of the industry�s self-service solutions.

After this experience, you�ll find you�ll be much better at technology innovation. Instead of creating another useless cool feature, trumpeted by your engineering staff, you�ll learn how to focus on a higher priority key customer problems. Your development costs will be lower and you�ll have a much better value proposition for your customer.

Watch out for endless feature comparison charts between your offering and your competitors. Just think about how many features you really use on commercially available software products such as Microsoft PowerPoint, Word or Excel (I bet it�s less than 10 percent). Focus on low-cost high-value solutions. Know your market niche better than any other competitor in the marketplace.

KC: What happened on this year�s Black Monday in retail, and what does it mean for the kiosk industry?

AR: Black Monday this year showed the growth of the multi-channel shopper. People got out to stores and shopped, then went back home to buy on the Web. Customers are doing more on the Web. So the stores� advantage of simply getting customers in stores is being taken away, because they�re not always closing sales. And when a customer goes online, they might not buy from the same retailer.

For stores, knowing the Web people will use a kiosk can help in closing the sale in the brick and mortar location. If they can lure the multi-channel shopper to use the kiosk, they can close the sale at the retailer. The kiosk must facilitate closing of the transaction at the store � that�s the opportunity to innovate.

Some retailers are still living in the 20th century. What does the next generation shopper want? They�re a multi-tasking generation, they�ve got the Web, instant messaging, television, cell phones and homework all going at the same time. They�ve got to innovate and reach this new generation.

KC: What changes do you see in how large customers create and deploy kiosk solutions?

AR: In the last few years, I�ve worked with a lot of top retailers, including Home Depot, Ticketmaster, and Ahold Giant Foods. Kiosks are becoming just another customer-facing technology, integrated with CRM. Demand is picking up because C-Level executives are seeing self-service in a variety of locations, from airports to stores, and they want self-service incorporated into their own businesses.

In 1998-2000, big companies were hiring fancy Web firms to develop Web sites. Now those companies and gone and they do it themselves. The large retailers are bringing software development in-house. That�s good for software-enabling companies. Most of the �plumbing� is managed by in-house staffs, though the creative design and advertising strategy is contracted outside the firm.

Large firms will continue to use large system integrators. I�m seeing more and more projects being developed in-house by the Web development teams.

Larger projects require more robust software, and the stakes are higher. There�s a big difference between a hundred kiosks and 10,000. Security is a big issue. It may take eight weeks to get a project through the legal department.

KC: What industry seems ripe for change in 2006?

AR: Certainly, the photo industry appears to be the largest deployer of consumer kiosks. I was at Wal-mart recently and there were 10 people in line at the Kodak machine. When is someone like Kinko�s going to wake up and put 20 photo kiosks in the store?

I�m convinced that Kodak will be sold within two years, probably to Hewlett-Packard or 3M. They�ve lost their focus. They�re a great company, but won�t survive as a stand-alone company. Their investors are impatient.

KC: What segment is ready for rapid growth?

AR: I�m surprise at the pace of adoption in all levels of government. You�ve got state, local and federal governments, departments like Social Security, Passports, and Motor Vehicles, which are still very much available for self-service. They will accelerate and have capital budgets. The problem is the government agencies are so fragmented.

Take voting. The obvious problem is finding the solution that works best, but every town has a different method, so it�s hard for everyone to agree on a technology solution.

KC: You say digital downloads of media content will grow in retail settings. Why do you think so?

AR: Shopping is a social experience, and it is part of the reason for getting out of the house. People will want to download media in a store, with their friends, not in front of their home computer. That�s why you�re seeing companies having success with it. Retailers will use it to drive traffic. For Starbucks, it�s a way to get you in the store.

Article Detail

Also nice companion piece on Making Multi-Channel Shoppers Happy
article link

Retail kiosks at NRF Retail Show

KIOSK Information Systems to show DVD, Photo and HR kiosks at the NRF show next week in New York.

Show Link

KIOSK Information Systems will be exhibiting at the upcoming NRF "Big Show" in New York City next week. With 400 exhibitors, including every major retail supplier, the show fills New York’s Jacob K. Javits Convention Center Jan. 15-18 with every conceivable retail product and innovation.

KIOSK will be located at booth 2060 which is the Kiosk Com Pavilion. The KioskCom pavilion will be set up as a comfortable lounge, encouraging guests to escape the frenzy of the show floor in a relaxed atmosphere.

Solutions being shown by KIOSK will include the DVD Selling Machine for unattended previewing of DVD, also a new countertop solution for photo, digital media and mini-lab functionality. Rounding out the solutions will be an HR solution for Retail. The unit is designed for assisting self-service employees to manage their benefits.

For more information email craig at kiosk.com

Case Study: A Microcosm of the Multichannel Experience in Manhattan's SoHo

A look at multi-channel marketing efforts by a couple of companies. Multichannel customers are known higher spend so the attention is warranted.

Story link

Oct. 13, 2005

By: Chantal Todé
Senior Editor
ctode@dmnews.com

NEW YORK -- L.L. Bean is the latest cataloger to commit to opening retail stores and truly becoming a multichannel merchant. The benefits are ostensibly worth the investment because customers who shop a brand in multiple channels have proven to be more loyal and spend more than single-channel buyers.

However, simply opening retail locations doesn't a multichannel merchant make. DMers need to promote their multichannel abilities on the Web, in their catalogs and inside their stores.

Unfortunately, in Manhattan's SoHo neighborhood -- one of New York City's trendiest and largest shopping districts -- many catalogers with stores in the area fail to highlight their multichannel offerings or do so in such a piecemeal way that it doesn't suggest a cohesive in-store strategy.

Of 16 apparel, specialty and home furnishings stores visited between August and late September, nine of them either don't offer a catalog in the store or were out of catalogs at the time of the visit. And only three -- Sephora, J. Crew and Crate & Barrel -- promoted their brand's Web site in any meaningful way. In fact, industry experts who reviewed notes taken during the visits expressed disappointment at how little these merchants were doing to showcase the multichannel experience.

"The catalogers doing a really good job [promoting their multichannel benefits] are few and far between," said Bill LaPierre, vice president of catalog brokerage at Millard Group, Peterborough, NH.

"Not one of [the stores reviewed here] is presenting a truly integrated multichannel organization. It's all hit or miss," said Debra Ellis, president of direct marketing consultancy Wilson & Ellis Consulting, Barnardsville, NC.

The stores visited were: Ann Taylor Loft, Anthropologie, Bliss, Bloomingdale's, Crate & Barrel, Eddie Bauer, EMS, J. Crew, Patagonia, Pottery Barn, Room & Board, Sephora, Smith & Hawken, Staples, Sur La Table and Victoria's Secret.

There were exceptions to the poor showing. The Eddie Bauer store on Broadway near Prince Street had a telephone kiosk stocked with recent issues of the catalog, a phone for placing orders and signs underscoring the wider product selection available via the catalog. To entice use, a sign above the kiosk informed shoppers that they can get free shipping and handling when they order from the in-store phone. Also, postcards at checkout offered $20 off a next purchase to shoppers who signed up for e-mail.

LaPierre said he was pleased with Pottery Barn's well-stocked catalog rack at the front entrance of its Broadway and Houston Street store. The rack held the brand's many different titles. Also on the mark was a simple sign-up card near the cash register for customers who wish to receive the catalog and/or e-mails.

Farther south on Broadway, Staples was the only location visited to have an in-store Internet kiosk. Kiosks "are probably the most underutilized [multichannel strategy]," Ellis said. When they are present, they should be promoted throughout the store, she added, something Staples didn't do.

However, kiosks are a good idea only if the staff knows how to use them and deliver shoppers to them when an item is unavailable in the store, LaPierre said.

"I have had a number of experiences where store personnel has said, 'You can order from the kiosk if you want to, but I don't know how to do it,' " he said.

"I was amazed at how many stores didn't have catalogs," said Lilliane LeBel, vice president of Decision Direct Research, Millard Group's research division. Picking up a catalog in a store is just like getting one in the mail. "It will prompt shoppers to go to the Web site or bring them back to the store." This strategy is especially important because 50 percent to 60 percent of Americans don't shop from catalogs.

Ellis, on the other hand, isn't so sure of the need to offer catalogs in stores.

"A lot of folks operate on the premise that [consumers] came into the store so they're a viable prospect," she said. "Still, catalogs cost around 50 cents apiece, so you have to look at the return on them."

Many companies reviewed here are losing a chance to promote their Web sites, LeBel said. This is especially important given that while catalogs, the Internet and a retail store all work synergistically to drive overall sales for a brand, catalog and retail sales on average are being lost to the Internet, according to Decision Direct Research's post-holiday spending survey of online/catalog buyers.

The amount of respondents' holiday spending in the Internet channel grew from 43 percent in December 2002 to 47 percent in December 2004. Spending in the period decreased from 19 percent to 18 percent via catalogs, and it fell from 38 percent to 35 percent for retail stores.

Patagonia's Wooster Street store limited promotion of its Web site to printing Patagonia.com on the front door.

"This is typical of what a lot of retailers do, and what I call weak branding," LaPierre said, adding that retailers think they can slap ".com" at the end of everything and consumers will recognize what they should do.

Sephora and J. Crew, on the other hand, had large signs explaining the benefits of shopping online while Crate & Barrel had signs overhead at every cash register directing shoppers to its Web site.

Smith & Hawken was the only store that promoted a loyalty program, with a brochure explaining the benefits available near the cash register in its West Broadway store.

"By promoting a loyalty program, you're building that bond by letting shoppers know they are important," LeBel said, who noted that she was surprised more stores weren't doing this.

One reason many stores don't promote a brand's multichannel capabilities is that the individual store managers don't always understand the significance of a multichannel strategy, LaPierre said. This can be an operational issue with the performance of individual stores based on how much sales they bring in, so managers don't see the benefit of promoting other channels. To overcome the problem, DMers may need a new business model, Ellis said.

"If the store matrix is the only measure of the location's success, then the managers will continue to be reluctant to offer access to other channels," she said. "[However,] if you can make all of those channels work together, you have a branding machine that just won't quit. If you're doing it haphazardly, you're actually undermining your existing business."

Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

Health & Nutrition Retail Kiosk

Healthnotes Inc. (HNI) today announced the launch of its latest EasyAnswers Touchscreen Kiosk, the Low-Profile. Available in nine design variations, the Low-Profile Kiosk offers retailers the flexibility of choosing the color and graphics scheme that works best for their stores.

“Over the past eight years of helping retailers deploy information kiosks in-store, we’ve found that one of the key challenges they face is designing a kiosk that’s engaging and easy-to-use for their customers,” stated Skye Lininger, HNI president and CEO. “With our new Low-Profile Kiosks, HNI has leveraged our years of design expertise to address these challenges and are proud to offer an easy, affordable way for retailers to tailor a kiosk to their stores.”

The Low-Profile Kiosk is a plug-and-play unit preconfigured to run Healthnotes applications. The kiosk stands five feet tall and includes engaging graphics to grab customers’ attention and motivate them to use the kiosk to find answers to their health, food, and lifestyle questions and help them make purchase decisions. It’s available in 3 standard colors (red, green, and blue) and 3 signage treatments to match the department where the kiosk is located; Healthy Living, Food and Recipes, and Pharmacy. Additional customization, such as adding the retailer’s logo or other branding elements, is also available.

Self-Service Application Kiosks - KIS Kiosk Health and Nutrition Kiosk in Retail

Pepsi, Lounge Lizards and Kiosks

Featuring Microsoft(Nasdaq: MSFT) Xbox consoles, videos, and cozy seating areas, Pepsi Zone's plan is ambitious, but it certainly isn't original. Two years ago, rival Coca-Cola(NYSE: KO) hoped to win over the mall rats by opening a pair of Red Lounge hubs not too far from where two of the three Pepsi Zones have decided to set up camp.

Meanwhile Sony does PSP kiosks in shops and cafes in Japan...

Coke has been slow to expand the concept, though it did open up a lounge in Singapore earlier this year.

The hangouts are free to the public. Guests can purchase beverages from state-of-the-art vending machines, but that's not the real driver here. Pepsi and Coke are simply trying to reach out to folks who are too busy playing video games or zipping past soft-drink ads on their TiVo(Nasdaq: TIVO) boxes to notice the soft drink industry's more conventional marketing approach.

But does any of it matter? Because venues such as restaurants, movie theaters, and amusement parks tend to have ties to just one of the two beverage giants, most soda drinkers have grown up as brand-agnostic. Even in the democratic platform at the corner grocery store, where consumers have a choice, it often boils down to which brand is discounting the deepest.

Still, selling syrup concentrate to bottlers is a high-margin business, and Coke and Pepsi can afford to pump money into brand ambassadorship if it means that the company's name will be seen in a favorable light.

So is product placement giving way to kiosk placement? No way. The companies will still find clever ways to wedge their presence into televised content. However, they at least know that they own their captive audience in these lounges. The kids belong to them -- at least until they find out about the sale at Aeropostale(NYSE: ARO) three shops over.

Pepsi, the Lounge Lizard - Motley Fool - MSNBC.com

PSP Kiosks Attack Japan
Drawing in hipsters from shops, cafes, and beauty parlors.
by Patrick Klepek, 07/26/2005

The hardcore understand the PSP. The minute Sony announced a handheld take on PlayStation, million of sales were guaranteed upfront. To expand the portable market's reach as Nintendo has with niche games like Nintendogs, Sony's has started pushing PSP in front of a different kind of Japanese audience.

ITmedia reports apparel shops, cafes, and beauty parlors in Japan will all start receiving PSP kiosks primarily showing off the upcoming release of Mercury, but also showcasing the hardware's multimedia capabilities through movies, anime, and music. Some will even have unique promotions like PSP-stylized deserts and kiosks running at the establishment's tables.

The lack the popular software for PSP is only one of the many reasons Sony needs to push the extra features. In the US, UMD movies have proven ridiculously popular despite their higher-than-desired price point, and it's likely Sony will continue riding similar multimedia waves until developers catch up.

For those lucky enough to find themselves situated in the land of the rising sun and reading 1UP, you can catch these new promotions at Beams T Daikan-yama, B-in Yoshida, The W Cafe and Beautrium starting today and running through August and, in the case of Beautrium, September.

In-store Kiosks Charging More Than Internet Sites?

Being able to charge different customers differently is one of those strategies that companies constantly explore implementing. Here is article from Techdirt that indicates one major retailer doing just that (lower price shows on internet browser outside the store compared to internet browsing shopping kiosk inside the store).
story link

Best Buy Proving Customer Centric Model

The customer-centric strategy started last year at consumer electronics retailer Best Buy will be turned up in 2005, the company says. And in the process, it could change the entire competitive retail landscape.

From Peppers and Rogers Group

"Best Buy is having success maximizing the value of each consumer," says Gary Arlen, a veteran consumer electronics industry analyst. "It will change the way every other retailer does business now. The more its competition sees its success, the more are going to follow that customer-centric strategy. Get ready for the ripple effect."

In announcing that its 2005 earnings rose 17 percent over 2004, Best Buy gave high priority to the customer value groups it has identified and targeted as a key to its growth. At the end of 2004, 85 of its 830 U.S. stores operated under a customer-centric model in which it identified customer groups such as premium or high-ticket purchasers, early adopters, and small business owners as key groups from which to grow value and revenue. It also pays less attention to low-value customers who frequently return items or make relatively low-value purchases.

Those 85 stores, according to the company's April financial statement, booked average sales gains 8.4 percent last year, compared to 2.3 percent at "non-segmented" stores. "There's no turning back," said CEO Brad Anderson. The company will convert 150 to 200 more stores to the customer-centric model this year.

"Over time, we believe that our customer centricity work will help us attract new customer segments to our stores, which leverages our existing assets," Anderson said in a recent press release. "In addition, it gives us an engine for continuing to innovate and respond to changing customer needs."

Not only is Best Buy showing that creating customer groups and treating them differently can work, it is also putting the concept of customer value on the map for many retailers. The mass retailing world that has been based on aggressive discounting and mass market ad spending is now taking notice of Best Buys efficiency and success.

"It is doing what every retailer should do," says Judy Bayer, Ph.D., director of Advanced Business Analytics for Teradata. "It is identifying its hero customers. It is developing strategies for how to acquire those high-value customers, it is developing the behaviors it wants to see from its high-value customers and they are treating different customers differently."

And it may be starting to crack the case on how to compete successfully with Wal-Mart. The uber-retailer does not compete with Best Buy on its high-end plasma screen TVs or connectivity services such as satellite and cell phone service. But it definitely competes on price for CDs, video games and low-end electronics. Best Buy has chosen to let Wal-Mart have the low end. That's part of its success, but it has also beaten Wal-Mart at customer-centric retailing in this category.

"Best Buy has taken a phenomenal step forward. It has raised the bar for everyone," says Janice Mayo, Vertis SVP of Sales & Marketing, whose company has worked closely with many regional retailers to identify customer groups and customize interactions with them. "It is competing correctly with Wal-Mart because it is putting into practice the belief that at the end of the day you have your brand and your unique customer set. You can only really leverage one of those things. And it's the customer."

According to Anderson, all Best Buy stores will operate under the customer-centric model "within three years."

Winn-Dixie Files Bankruptcy

It's been expected for a couple of years given the debt load but its finally happened.

NEW YORK (Reuters)--Winn-Dixie Stores has filed for bankruptcy protection, citing increasing operational challenges since reporting a wider quarterly loss earlier this month.

The supermarket operator said on Tuesday it and 23 of its U.S. subsidiaries filed for Chapter 11 bankruptcy protection, but its 920 Winn-Dixie stores remain open and serving customers.

The company said it had lined up an $800 million debtor-in-possession financing facility from Wachovia Bank, which replaces its previous $600 million credit line.

eWEEK.com Special Report: Mergers & AcquisitionsThe bankruptcy filing comes as the grocer struggled despite a restructuring and a push to improve store operations to draw more customers and cut costs.

Earlier this month, Winn-Dixie said its quarterly loss widened, leaving analysts to wonder how long it could avoid filing for bankruptcy protection. Speculation heated up again last week that a filing was on the way after the company said it had incorrectly calculated a measure of earnings.

The Jacksonville, Florida company said that as part of its Chapter 11 restructuring, it will seek additional asset sales and cut expenses. It also said it is taking steps to reduce its lease obligations on previously closed stores.

Winn-Dixie said it is continuing to pay its associates, with their health and welfare benefits expected to continue without disruption.

Motorocycle SQL Kiosks

Suzuki Revs MySQL Kiosks

Needing to kick into high gear the proficiency and management of its national dealerships' sales expertise, American Suzuki Motor Corp. relied on open-source software development to create a new virtual purchasing world for its finicky motorcycle audience.

Challenges include multiline dealership responsibility, limited floor space and on-site inventory, extensive accessory options, and cold weather, which slows sales during winter months. In addition, customers come in prepared with Internet research.

Upon visiting various Suzuki dealerships across the United States, Steve Bortolamedi, dealer network manager for Suzuki, in Brea, Calif., realized that regardless of the promotion—such as for new models or options—the ultimate difference in customer satisfaction and sales lies in strengthening the dealership salesperson.

"Motorcycling is a real hobbyist sport, and they're real tech heads. They know every little piece that's on the bike and every little detail, and they want more knowledge than the salesperson has," said Bortolamedi. "You want to build a relationship and trust [with] the customer, and if you spend whatever time you have with not knowing the product, then you're going to have problems. ... That was very disruptive to the sales process."

Bortolamedi said that without sufficient knowledge of—or quick access to—information on myriad motorcycle makes, accessories, nuances and technical knowledge surrounding Suzuki and key competitors such as Kawasaki Motors Corp., American Honda Motor Co. and Yamaha Corporation of America, sales staff would often take the path of least resistance and let the customer lead the sales process.

To remedy the situation, Bortolamedi, with the help of Suzuki Marketing Manager Rob Lopusnak, decided to create a three-dimensional virtual-tour kiosk that could also act as a centralized database, training tool and tracking application.

"The biggest thing we were trying to bring out is we wanted the salesperson to be involved—what better to have than one place to gather all that information and take the customer through the whole sales process, right up to the point of purchasing," said Bortolamedi.

To develop the application, called Suzuki Sales PRO (Professional Retail Outlet), Suzuki recruited Matrix Consultants Inc., of Santa Monica, Calif., to build the program and system to update 600 kiosks slated to be deployed around the country.

"Every dealership does something different, so we took the best practices of all the dealerships in the country, and we built a selling-approach system. Then we added in Matrix's expertise," said Bortolamedi.

Working off a 3-D model designed by EON Reality Inc., of Irvine, Calif., Matrix had originally prototyped the product on Microsoft Corp.'s Access to manage the database. However, the database's size forced Matrix to consider Microsoft's SQL Server, but that move proved too costly.

That opened the door for open-source database alternatives such as MySQL AB's MySQL, said Margo Zenk, senior partner and technical director for Matrix.

"I was looking for an easy method to act as database from a Microsoft .Net platform, and I already had the experience of accessing MySQL using the ODBC interface to pull it into Microsoft [development] tools," said Zenk.

"We did look at PostgreSQL and some other open-source options, but it was the maturity of the [MySQL] technology. I was crunched for time, and I just knew it was going to work because I've made it work doing similar things in the past. We're moving to open source for the price."

Zenk said she was able to get the Suzuki Sales PRO application up and running on MySQL in just under two weeks and had little difficulty getting the ODBC and MySQL interfaces operating smoothly.

Application developers are agreeable to using MySQL because of the technology's accessibility and simplified use within production environments, said Alex Roedling, senior product manager for MySQL, in Cupertino, Calif.

"We support close to 50 platforms, so if they're trying to deploy on Windows, Solaris or Mac OS, the portability of the database makes it attractive," said Roedling. "We have drivers for JDBC [Java Database Connectivity] and ODBC, so you can use basically any developer environment you want with their existing tool sets to develop against MySQL."

Matrix's Zenk said Suzuki Sales PRO will be "100 percent" Linux-based by the end of the year. The application currently features an open-source database using Windows software to manage the visual 3-D model.

Despite suggestions that open source is a community-based technology lacking support, rising cost pressures are leading greater numbers of organizations and application developers toward the software-licensing flexibility that open source provides, analysts say.

"Do I buy more Oracle [Corp.] licenses and Sun [Microsystems Inc.] Solaris machines, or do I go with MySQL and commodity hardware? People are hesitant, but it's becoming more and more clear that open source is something that needs to be looked at, especially if they're using a big-iron database for their smaller applications—that tends to be overkill," said Roedling.

The patent-pending Suzuki Sales PRO kiosks are located in 540 U.S.-based dealerships, excluding Hawaii, with another 40 to 60 sold. Fifty percent of the dealerships bought the kiosk on its introduction. Matrix has bought licenses to build 900 kiosks, and plans are under way to expand the kiosks to Europe, with minor model changes and language issues to be overcome.

The kiosks basically consist of Dell Inc. 260, 270 or 289 workstations atop a specialized stand. Matrix performs remote synchronization to install nightly content updates to every kiosk Monday through Thursday. The kiosks are backed up daily.

The customizable Suzuki Sales PRO kiosks let customers choose different motorcycles and select and configure accessories. The application provides competitive comparisons on models and makes, as well as videos and third-party reviews of some vehicles.

During each selection by a consumer, a finance calculator keeps a running total of what the person is spending on the motorcycle. The idea, Zenk said, is to show buyers that $2,000 worth of accessories does not translate into $2,000 extra per month but rather a slight monthly payment increase. Labor costs are also accounted for.

For those not yet ready to purchase, the kiosk produces a color brochure that includes their choices and specifications, the salesperson's name, and part numbers for checking inventory, said Zenk.

A reporting feature within the application lets dealers check on up-to-the-minute performance of sales staff, how many accessories are being added and who may require additional training.

Kiosk enhancements under development include additional reporting tools and an interface from the kiosk data repository to the dealership management systems for streamlining contract production. Direct marketing tools using e-mail and an upgradable sales text-based ZIP code feature are designed to help dealers compute financing more quickly.

Check out eWEEK.com's Database Center for the latest database news, reviews and analysis.

Circuit City Customer Service

Circuit City's "Surprise and Delight" IT Strategy

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Circuit City's New IT Approach to Customer Service
January 17, 2005

By Evan Schuman
When major customers walk into a Circuit City location, CIO Mike Jones wants to whisper customized sales pitches into their ears—literally.
Jones's scenario is simple: As customers walk into the store, they receive a very light wireless headset. As they walk through the store, the device uses sensors to learn where the customer is. When the customer stops in a certain area, the headset can explain items, present audio from a TV demonstration and potentially even connect the customer live with a centralized sales assistant. In theory, that sales assistant might be 2,000 miles away—assuming no one in that store is available.

The headphone helper is just one of several non-traditional ideas that Jones is trying to push through the $10 billion retail chain's corporate structure. As senior vice president and CIO, Jones knows how much of a structure the chain's 1,648 U.S. and Canadian locations pose.

Jones uses the popular corporate phrase that retailers today must "surprise and delight" their customers. Many chains mouth a "surprise and delight" strategy while unveiling marketing strategies as radical and unexpected as Fourth of July clearance sales.

But Jones is trying to put mental muscle behind that phrase. Why? In many respects, the answer is long-term survival.

"The consumer marketplace today is very much a polarizing place. You have to decide where you want to play, and we are not going to win on price," he said. He reasons that radically improving customer experience is mandatory, especially when selling products that—for the most part—are also offered by their largest competitors.

The CIO of another consumer electronics chain—Tweeters—is also looking at letting customers literally into their living rooms. To read more, click here.

For example, most retailers today are offering buy online, pick up in store programs. Jones wants to do that one better. The system will know the ZIP codes of registered users. When orders are placed, the system does a lookup and determines if there is a Circuit City within so many miles of the customer. If there is, the system can offer to have a store employee deliver the merchandise to the home, Jones said.

Putting aside the delivery charge issue, this program has several strategic benefits over a delivery from Federal Express or UPS. First, this sidesteps the inventory problem by giving the retailer a little extra time to find the product. Second, there is the branding and customer service advantage of having the product delivered by "a Circuit City-logoed shirt driving a Circuit City-logoed truck," Jones said. And there is the future potential for having that employee install the system. With that installation comes the CRM (customer relationship management)-oriented intensive knowledge of all of the other electronic components that customer owns.

Another Jones scenario: When customers are at the checkout line making a large purchase, have an alert go to the chain's CEO. In theory, the CEO could phone that checkout aisle and speak with the customer, thanking him personally for the order. "That's surprise and delight," Jones said. Can he make it happen? Jones said he is still working on it.

Next Page: RFID customer tracking. The CIO—who also wants to sell MP3 systems with that customer's favorite music already installed—said that he truly likes RFID embedded into loyalty cards and is trying to figure out ways to creatively leverage it. "When you come into my store and you break my beam, a coupon dispenser that is standing right at the door could spit out specific coupons because of your behavior," he said.

With Web-offline integration, Jones hopes to know, for example, that a customer entering the store was evaluating plasma TVs on the Web site over the weekend and—when he breaks another beam—is now standing near the plasma TVs.

"It's now obvious that he's evaluating plasma TVs. He's been in my stores and walked through the TV area, watched a demo and walked out. He had looked at those pages on our Web site," Jones said. "Let's say I have year's inventory of RCAs. Maybe I offer him a $500 coupon right on the spot."

Jones said the chain is currently upgrading and replacing major systems—all POS (point of sale) systems are being replaced with new Linux units—but he wants to see more software intelligence built in. Software should be able to do a lot of the monitoring and decision-making referenced above, he said. "You've got to build in a sophisticated neural learning engine." Jones is working with various technology partners, including Yantra, IBM and 360Commerce.

One sophisticated retail approach today is predicting the weather before the weather reports do. Does it work? To read more, click here.

Most of the things he is exploring have to happen in the store, preferably soon after—or when—the customer walks in the store, he said. "The point of sale is not the point to be doing this. It's too late," he said.

Jones also sees cultural and community changes in a post-9/11 world, which is what fueled his "store employee delivering to the home" concept. "There are going to be a lot more gated communities. We're talking home schooling and having to digitally accommodate people in their homes.

"We can have a debate about who is going to own the customer in the store. That customer walks into the store and puts on Circuit City headsets, where we pipe in promotional material based on GPS input. I own the customer at that point," Jones said, adding that integrating digital signage into the equation helps.

NRF Show News

Retail CIOs Demo RFID Prototypes at NRF

story on EWeek

NEW YORK—Speaking to an overflow crowd at the National Retail Federation's Redefining Retail show Monday, Metro Group CIO Zygmunt Mierdorf beamed in live footage of the company's prototype RFID-enabled stores from Germany, showing interactive changing rooms that make clothing recommendations and have clerks bring additional pieces, a cashier shelf that instantly scans items (so the cashier doesn't have to) and a privacy system that literally leaves the chip in the store.

Mierdorf also demonstrated smart shelves that display the clothing sizes on them so that customers need not rummage through clothing piles.

The customer in the dressing room can interact with a touch screen. If the clothing selected is not the right size "or if the customer accepts a computer-recommended accompanying piece of clothing" an attendant is automatically alerted and brings the items to the customer in the dressing room. This is helpful when customers may not want to go through the bother of getting dressed, go into the sales area to pick up the replacement items, and then return to the dressing area and repeat the dressing process, Mierdorf said.

eWEEK.com Special Report: RFIDMierdorf's presentation was one of three that teased attendees with the prototype potential of RFID, along with a brief update on initial RFID deployment activities from Wal-Mart's CIO, Linda Dillman.

Dillman opened the presentation with references to her company's highly publicized RFID trials, with the extensive attention to Wal-Mart's announced plans to deploy this month. "As my vendors have told me repeatedly, 'January' does not mean 'Jan. 1,'" she said.

Dillman said little new about the rollouts beyond what analysts were briefed on in late December. But she did reveal the small bugs discovered during the trial process, such as discovering that one manufacturer's system kept issuing a sleep command to another vendor's chip.

Wal-Mart will soon have forklift-mounted RFID readers and product visibility within 30 minutes of merchandise movement, Dillman told the crowd. She also said that an immediate advantage of their trial is that when associates try to place manual orders—something Dillman promised would always be permitted—the system can now alert the associate if the product being ordered is already in the backroom. Today, it's just an FYI alert. In 60 days, Dillman said, they are considering making it mandatory, where the system will not permit a manual order if it knows the merchandise is already there.

The Wal-Mart executive also showed video of a handheld device—which she described as more closely resembling a small Geiger counter than a typical PDA—that associates can use to track wayward merchandise on the back of a store shelf. Just like that Geiger counter, the Wal-Mart unit beeps progressively faster as it approaches the hidden product.

eWEEK.com Special Report: Retail's Big ShowAs is the rule with live demonstrations, not everything went perfectly. Colin Cobain, the U.K. IT director for Tesco, had created on-stage a live working demo of the company's RFID system. The demonstration was intended to show that the system would detect merchandise changes. On the first try, the system properly flagged a flawed crate with a red light. After it was repaired, though, it was supposed to show a green light. It didn't, leaving some in the audience to comment that it was perhaps a more realistic demo than had been intended.

Debit Cards Are King Now

NRF: Debit Cards Pass Credit as Most Popular Payment Method this Holiday Season

--Average Person has Completed 24.4% of Shopping--

Washington, DC, November 16, 2004--Credit is no longer king when it comes to holiday spending. According to the second installment of the NRF 2004 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, the use of debit/check cards is soaring, with 34.7 percent of shoppers planning to use debit or check cards as their primary form of payment during the winter holidays, up from 30.7 percent last year. The survey also found that fewer consumers will use credit cards to pay for merchandise this holiday season (29.5% vs. 30.1% in 2003). Dependence on cash (25.9%) and checks (9.9%) has also subsided this year.

"Consumers have been budgeting and planning ahead for the holiday season, so it's no surprise that credit will take a backseat to debit cards this year," said NRF President and CEO Tracy Mullin. "With debit cards, consumers can keep a handle on the money they have to spend without worrying about carrying cash."

Shoppers will be heading to the stores for a variety of merchandise this holiday season. According to the survey, consumers plan to purchase books, CDs, DVDs, videos and video games (60.1%), clothing and clothing accessories (59.5%), and gift cards (51.8%) this holiday season. Also, 43.3 percent of consumers will purchase toys.

Though many consumers started their holiday shopping earlier than ever this year, most of them still have far to go on their gift lists. As of November 12, the average person had completed about a fourth (24.4%) of their shopping. Although most consumers have completed less than ten percent of their list (68%), some shoppers are ahead of the game. According to the survey, one in 20 consumers is almost completely finished with holiday shopping (more than 75% complete).

"Consumers had the best of intentions to get a head start on shopping this year, but the holiday season has snuck up on shoppers once again," said Phil Rist, Vice President of Strategy at BIGresearch. "The weekend after Thanksgiving will be extremely important for retailers this year, so shoppers will be greeted with great sales and discounts when the doors open on Black Friday."

NRF continues to project that holiday sales will increase 4.5 percent this year to $219.9 billion.

About the Survey

The NRF 2004 Holiday Consumer Intentions and Actions Survey was designed to gauge consumer behavior and shopping trends related to the winter holidays. The survey, which polled 7,349 consumers, was conducted for NRF by BIGresearch from November 3-10, 2004. The consumer poll has a margin of error of plus or minus 1.0 percent.

BIGresearch is a consumer market intelligence firm that provides unique consumer insights that are gathered online utilizing very large sample sizes. BIGresearch's syndicated Consumer Intentions and Actions survey monitors the pulse of more than 7,000 consumers each month to empower its clients with unique insights for identifying opportunities in a fragmented and changing marketplace.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet and independent stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.4 million U.S. retail establishments, more than 23 million employees - about one in five American workers - and 2003 sales of $3.8 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.

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Wal-Mart, and Predictive Technology

NY Times: What Wal-Mart Knows About Customers' Habits

By CONSTANCE L. HAYS

URRICANE FRANCES was on its way, barreling across the Caribbean, threatening a direct hit on Florida's Atlantic coast. Residents made for higher ground, but far away, in Bentonville, Ark., executives at Wal-Mart Stores decided that the situation offered a great opportunity for one of their newest data-driven weapons, something that the company calls predictive technology.

A week ahead of the storm's landfall, Linda M. Dillman, Wal-Mart's chief information officer, pressed her staff to come up with forecasts based on what had happened when Hurricane Charley struck several weeks earlier. Backed by the trillions of bytes' worth of shopper history that is stored in Wal-Mart's computer network, she felt that the company could "start predicting what's going to happen, instead of waiting for it to happen," as she put it.

The experts mined the data and found that the stores would indeed need certain products - and not just the usual flashlights. "We didn't know in the past that strawberry Pop-Tarts increase in sales, like seven times their normal sales rate, ahead of a hurricane," Ms. Dillman said in a recent interview. "And the pre-hurricane top-selling item was beer."

Thanks to those insights, trucks filled with toaster pastries and six-packs were soon speeding down Interstate 95 toward Wal-Marts in the path of Frances. Most of the products that were stocked for the storm sold quickly, the company said.

Such knowledge, Wal-Mart has learned, is not only power. It is profit, too.

Plenty of retailers collect data about their stores and their shoppers, and many use the information to try to improve sales. Target Stores, for example, introduced a branded Visa card in 2001 and has used it, along with an arsenal of gadgetry, to gather data ever since. But Wal-Mart amasses more data about the products it sells and its shoppers' buying habits than anyone else, so much so that some privacy advocates worry about potential for abuse.

With 3,600 stores in the United States and roughly 100 million customers walking through the doors each week, Wal-Mart has access to information about a broad slice of America - from individual Social Security and driver's license numbers to geographic proclivities for Mallomars, or lipsticks, or jugs of antifreeze. The data are gathered item by item at the checkout aisle, then recorded, mapped and updated by store, by state, by region.

By its own count, Wal-Mart has 460 terabytes of data stored on mainframes at its Bentonville headquarters. To put that in perspective, the Internet has less than half as much data, according to experts.

Information about products, and often about customers, is most often obtained at checkout scanners. Wireless hand-held units, operated by clerks and managers, gather more inventory data. In most cases, such detail is stored for indefinite lengths of time. Sometimes it is divided into categories or mapped across computer models, and it is increasingly being used to answer discount retailing's rabbinical questions, like how many cashiers are needed during certain hours at a particular store.

All of the data are precious to Wal-Mart. The information forms the basis of the sales meetings the company holds every Saturday, and it is shot across desktops throughout its headquarters and into the places where it does business around the world. Wal-Mart shares some information with its suppliers - a company like Kraft, for example, can tap into a private extranet, called Retail Link, to see how well its products are selling. But for the most part, Wal-Mart hoards its information obsessively.

It also takes pains to keep the information secret. Some of the systems it uses are custom-built and designed by its own employees, the better to keep competitors off the trail. Companies that sell equipment and software to Wal-Mart are bound by nondisclosure agreements. Three years ago, Wal-Mart summarily announced that it would no longer share its sales data with outside companies, like Information Resources Inc. and ACNielsen, which had paid Wal-Mart for the information and then sold it to other retailers.

"When you look at their behavior, you can tell that Wal-Mart considers data to be a top priority," said Christine Overby, a senior analyst for consumer markets at Forrester Research. Over the years, she said, Wal-Mart executives have spent handsomely for their systems, paying $4 billion in 1991 to create Retail Link and signing onto innovations like bar codes and electronic data interchange, a forerunner of the Internet, well ahead of the pack. Wal-Mart is also driving manufacturers to invest in radio frequency identification. By next October, the company will require its biggest suppliers to tag shipments to some of its distribution centers with tiny transmitters that would eventually let Wal-Mart track every item that it sells.

With so much data at Wal-Mart's corporate fingertips, what are the risks to consumers? Most have no clue that their habits are monitored to such an extent. There are no signs - like the ones for Wal-Mart's anti-shoplifting cameras - advising customers that information is being collected and stored. And there is no giveback: Wal-Mart doesn't use loyalty cards and rarely offers promotions based on past purchases.

It is aware, however, that shoppers are concerned about privacy. On its Web site, Wal-Mart posts a privacy policy that states, in part: "We take reasonable steps to protect your personal information. We maintain reasonable physical, technical and procedural measures to limit access to personal information to authorized individuals with appropriate purposes."

NOT everyone agrees. "People don't know that Wal-Mart is capturing information about who they are and what they bought, but they are also capable of capturing a huge amount of outside information about them that has nothing to do with their grocery purchases," said Katherine Albright, the founder and director of Caspian, a consumer advocacy group concerned with privacy issues. "They can find out your mortgage amounts, your court dates, your driving record, your creditworthiness."

One source of information can be a credit card or a debit card, Ms. Albright said. Wal-Mart shoppers increasingly use the cards to pay for purchases, particularly in the better-heeled neighborhoods where the company has been building stores recently.

Some companies specialize in what is known as data enhancement, in which a customer's name and address, or a telephone number, can open the door to additional information. "If Wal-Mart had a customer database and wanted to start e-mailing their customers, we could append their e-mail addresses," said Sarah Stansberry, director of marketing for AccuData America, a company based in Fort Myers, Fla., that specializes in such services but does not use credit card records. With e-mail addresses, AccuData can track names and home addresses, she added. Other information follows: "We can access what they paid for their house, and their mortgage," though not driving records. The company has not done any work for Wal-Mart, she said.

Ms. Dillman said that she did not think Wal-Mart had ever tried to squeeze data from credit cards to learn more about customers' buying habits. Indeed, she said, it wouldn't be necessary. "We can do that without the credit card information," she said. "We can look at what's happening in the market, and look at what's happening in other markets that are similar."

WAL-MART uses its mountain of data to push for greater efficiency at all levels of its operations, from the front of the store, where products are stocked based on expected demand, to the back, where details about a manufacturer's punctuality, for example, are recorded for future use. The purpose is to protect Wal-Mart from a retailer's twin nightmares: too much inventory, or not enough.

"They recognize that technology is a critical tool for them to have an efficient supply chain," said Kathryn Cullen, a principal at Kurt Salmon Associates, a consulting firm, who said that she has not advised Wal-Mart. "They track the purchases and very quickly route that back to their suppliers so they can be replenished. They are very strict with their suppliers, but they give them the data that they need."

Armed with sales results from past weeks and months, Wal-Mart meets with each of its suppliers to establish sales goals for the coming year. Suppliers are actively encouraged, so to speak, not to miss those goals. A manufacturer that fails to meet its sales target - or has data-documented problems with orders, delivery, restocking or returns - can expect even tougher negotiations in the future from Wal-Mart, which is renowned for its steeliness in such situations.

Still, achieving sleeker operations is not the whole story. In many ways, data are used to forecast and drive Wal-Mart's business. "We use it in real estate decisions, understanding what the draw is like and what the customers will be like," Ms. Dillman said, referring to the company's planning for new stores, including the number of shoppers it expects to attract to each.

When it comes to Sam's Club, Wal-Mart's membership warehouse chain, "we know who every customer is," she added. So Wal-Mart does a kind of outreach, contacting nearby convenience store owners, for example, to let them know that "the items they buy, they could save money on by buying at Sam's."

AT Wal-Mart, problems are referred to as "exceptions," and technology is essential for what Ms. Dillman calls "exception management." Within the company's empire, "we keep watching everything that just happened," she said. "We are pretty near real time. We can tell people that they need to go do something, and we are within hours, depending on the event."

The "event" may be a truck's failure to drop off or pick up something, or the delivery of a load of shoes missing their mates. It could be the absence of an important product in a store's backroom, or in the distribution center that serves that store. Or it could be an act of nature like the hurricanes that descended, one after another, on Florida and other parts of the Southeast this year.

Eventually, some experts say, Wal-Mart will use its technology to institute what is called scan-based trading, in which manufacturers own each product until it is sold.

"Wal-Mart will never take those products onto its books," said Bruce Hudson, a retail analyst at the Meta Group, an information technology consulting firm in Stamford, Conn. "If you think of the impact of shedding $50 billion of inventory, that is huge."

The impact will probably be felt by suppliers, he added, but none are likely to complain.

"You can see the pattern of Wal-Mart's mandates, and as Wal-Mart grows in power, it is getting more dictatorial," he said. "The suppliers shake their heads and say, 'I don't want to go this way, but they are so big.' Wal-Mart lives in a world of supply and command, instead of a world of supply and demand."

Consumers willingly turn over plenty of information. For example, cashing a payroll check at Wal-Mart requires a two-step process, said an assistant manager in a Wal-Mart in Saddle Brook, N.J., who asked to be identified only by her first name, Mary. "First you enter your Social Security number into the system, twice," she said, pointing to the number pad hooked up to a register in the checkout lane. "The cashier can enter it, but some people don't like to share that information." Next a customer must enter his or her driver's license number, the assistant manager said. If payroll checks are cashed regularly at Wal-Mart, there is no need to keep punching in the Social Security number, only the driver's license number: "The system will recognize you the next time."

All of that information winds up at the company's office in Bentonville, the assistant manager added.

Ms. Dillman said it was "separated out, along with any personal identifiable information," and warehoused in a way that requires special permission to gain access. For check approval - when a customer writes a personal check to pay for something at a Wal-Mart, for example - "we don't keep it any longer than we need it for that transaction," she said. "All it's linked to is the checking account number, when we scan your check," she added. "We don't mine that data. We don't use it for anything other than the transaction."

Historically, Wal-Mart's focus has been on the products it sells, not to whom it sells them. One of the most difficult pieces of information to harvest is which customer bought what. Such information is expensive, too.

"When you are in the everyday-low-price market, you tend not to gather a lot of information about customers directly because you don't spend a lot of time with them gathering name, address, telephone numbers through a loyalty card," said Gene Alvarez, a vice president at the Meta Group. "That is the proper focus, because when you want to get customer-intimate, you have to offer a loyalty program, and there's the cost of that loyalty program."

Wal-Mart has discovered the potential of its own Web site in learning more about customers. Ms. Dillman said the site was beginning to allow users to buy a product online and have it delivered to a store near them, an option that Sears, Roebuck and other retailers have had for years. Naturally, some personal information would have to be submitted as part of the transaction. "You can do some association there, what products are of what interest," Mr. Alvarez said.

But Wal-Mart executives tend to care more about how products sell as part of a larger basket. "Me knowing what you specifically buy is not necessarily going to help me get the right merchandise into the store," Ms. Dillman said. "Knowing collectively what goes into one shopping cart together tells us a lot more."

Analyzing what ends up together in that cart drives Wal-Mart's pricing, other experts said. Shoppers might buy cold medicine along with chicken soup and orange juice during flu season, but not all of those products need to be priced at rock-bottom, said Ms. Overby, the Forrester analyst. "They might say, 'If we get really good at pricing the cold medicine and promoting it and letting people know that, hey, we have that product in stock and also at the best prices,' then they get people into the store," she said. "The other items in the basket might not be the lowest price in town, but the entire basket will be 10 to 20 percent less."

STILL, as Wal-Mart recently discovered, there can be such a thing as too much information. Six women brought a sex-discrimination lawsuit against the company in 2001 that was broadened this year to a class of about 1.6 million current and former female employees. Lawyers for the women have said that Wal-Mart has the ability to use its human-resources database to calculate back pay for the plaintiffs as well as to determine whether women were fairly promoted and paid. The judge hearing the case, which is pending in a federal court in San Francisco, has agreed.

The database is unusually detail-rich, said Joseph Sellers, a lawyer for the plaintiffs. "They've put into their work force database the information that bears on virtually every facet of compensation," he said. "They have performance reviews, along with seniority, the time spent with the company, which store they worked in. So you can compare people working in the same store, to measure whether men and women are paid differently."

If that comes to pass, it will be a rare moment indeed, with Wal-Mart's carefully assembled data being channeled for a purpose Wal-Mart did not desire.

From NY Times

Price Checking Leads Point of Decision Kiosks in Retail Space

Frost & Sullivan new report on little price check terminals.

October 25, 2004 09:05 AM US Eastern Timezone

Price Checking Leads Point of Decision Kiosks in Retail Space

PALO ALTO, Calif.--(BUSINESS WIRE)--Oct. 25, 2004--Point of decision (PoD) kiosks, also known as mini-kiosks, are emerging as the retail industry's solution to offering a superior in-store customer experience.

PoD Kiosks are defined as stand-alone or networked interactive self-service devices whose primary interface with the customer is via a touch screen or programmable buttons. They have a diagonal screen size between five and nine inches, resolution no less than quarter VGA (video graphics array) and possess multimedia capabilities including moving pictures and sounds.

New analysis from Frost & Sullivan (www.it.frost.com), U.S. Point of Decision Kiosk Markets, reveals that this market generated revenue of $36.4 million in 2004.

"In a climate of converging positioning strategies among retailers, the focus on in-store experience as a differentiator is being renewed. PoD kiosks are meeting the need for cheaper and smaller alternatives to the standard full-form factor kiosks," says Frost & Sullivan Senior Research Analyst Vineeta Kommineni.

Amendments to item pricing laws (IPL) are ushering in a wave of growth in this industry. Nine US states currently have IPLs that require most items sold in a retail environment to have a price label attached to them in addition to price labels on shelves. In 2003, Massachusetts amended its IPL to exempt retailers who install at least one electronic scanner for every 5000 square feet of store selling space from this requirement. This is now prompting retailers and supermarket associations in other states such as Michigan and California to appeal for similar changes.

"In order to capitalize on their investments in price checkers, retailers are showing interest in PoD kiosks that enable customer-facing applications other than mere price verification. These include guided selling, loyalty programs, and paging of sales associates for assistance," says Kommineni.

For PoD kiosks to succeed, however, they must carry compelling content to motivate usage by customers. For maximum impact, this content needs to be repackaged into short selling messages designed specifically for the PoD kiosk. The impact of full motion content at the point of decision needs to be reinforced.

Since this is an emerging market, content providers are yet to develop best practices for optimum message length, number of messages to be strung together, and so on. Issues of content control also abound.

"While content management is expected to pose a strong challenge in the short term, it is likely to diminish considerably in the medium term once best practices for content creation and content ownership are developed and alliances between content production houses, retailers and PoD kiosk software vendors evolve," concludes Kommineni.

If you are interested in an overview to this new research service, please e-mail Dustin McVey (dmcvey@frost.com) with the following information:

-- U.S. PoD Kiosk Markets (F037)

-- Name

-- Title

-- Company

-- Phone #

-- E-mail Address

U.S. Point of Decision Kiosk Markets is unique in its exclusive coverage of these emerging markets, providing forecasts and key drivers and restraints. It discusses pricing and interchangeability of PoD kiosks and cart-mounted devices in detail. It also assesses which retail segments are most likely to adopt PoD kiosks and provides a comprehensive competitive analysis. Executive summaries and interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. Its advisory expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities for clients. While serving clientele ranging from virtually every Global 1000 to emerging companies, Frost & Sullivan's comprehensive industry coverage includes a global perspective of all vertical and horizontal industries. Its unique coverage combines our ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com

U.S. Point of Decision Kiosk Markets

F037

Price Checking Leads Point of Decision Kiosks in Retail Space

Gift Card Retail Kiosks

St. Clair and KIS Introduce Gift Card Retail Kiosk

LOUISVILLE, Colo., Oct. 5 /PRNewswire/ -- St. Clair Interactive and Kiosk Information Systems will be displaying a new self service gift card solution for retail kiosks. The new solution will be shown at the upcoming Digital Retailing tradeshow in San Francisco October 11 and 12th in booth 1218.

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Shoppers can purchase gift cards and also check values of existing cards without lineups or delays at check outs. The kiosk dispenses and updates values both on the card and in the database. Transactions can be linked to POS. The application can transact with almost any Gift Card / prepaid / PIN database that has xml capability (such as ewi prepaid, Mosaic, etc).

Rick Malone, CEO of Kiosk Information Systems Inc said, "We're happy to work with St. Clair on another joint product. Gift Cards have a strong ROI and self-service makes the return even higher. We like products that offer real services and real returns for our retail customers!"

Kiosk Information Systems designs and manufactures touch screen, self- service kiosk solutions for retail, human resources, employee benefits, CRM, Wi-Fi, loyalty, gaming and many more self-service applications. With more than 28 standard kiosk models, custom models, turnkey vending units such as public internet terminals and photo kiosks, KIS has the largest self-service product and services line from which to choose. For information about KIS products and services please visit www.kis-kiosk.com/ , call KIS at 303-466-5471 or email pr@gokis.net

St. Clair Interactive Communications is a pioneering designer, developer and producer of interactive touch screen self-service transaction applications. Its client list spans the globe and includes major companies in the retail, telecommunications, financial services, manufacturing, health care, transportation, education and public utilities sectors. Since it was established in 1983, St. Clair has delivered more than 460 interactive multi- media projects, each developed for specific business applications and each using its own combination of hardware / software / network / data / user interfaces. For more information about St. Clair Interactive please visit www.stclairinteractive.com or call 800-461-8335 or email info@stclairinteractive.com.

St. Clair and KIS Introduce Gift Card Retail Kiosk

Retailers Turning to Tech

With e-commerce gaining steadily, bricks-and-mortar outfits are embracing new technologies to keep shoppers happy -- and spending

Newbie shoppers entering a Food Lion in Mooresville, N.C., might think they've come to the wrong place. The shop looks more like an electronics emporium than a traditional grocery store. Customers bustle about brandishing handheld scanners. Information kiosks dish out maps on how to find any item, such as that lattice pie crust hiding between aisles 7 and 8. And near the pharmacy, a high-tech blood-pressure monitor takes shoppers' readings and keeps the data for a year.

While this Food Lion experimental store seems extraordinary, technologies assembled within it could become commonplace within two years as retailers prepare for a makeover as dramatic as any on the Mix It Up home-design TV show. Gone will be today's cashier stations, price tags, paper sales signs, pharmacy waits, and deli lines. Hold on to your cart, because your shopping experience might soon have little resemblance to anything you experience today.

"BIOLOGICAL PROBLEMS." What's behind this shift to technology? With consumers growing more accustomed to the quick convenience of shopping on the Internet, bricks-and-mortar retailers are having to hustle like never before. They increasingly find that new technologies are often the only way to keep costs down while offering customers a better shopping experience. Buyers appreciate kiosks that can suggest the perfect recipe to go with white wine. And a self-checkout that halves the time spent waiting in line can be a big draw.

Add changing demographics, and the time is ripe for shopping to get a tech infusion. As the population ages, buyers look for technologies that offset their declining capabilities. Baby boomers, for example, like gadgets that make up for their deteriorating eyesight -- such as the hand-held scanner Food Lion is testing out that displays an item's price and description in larger type. "A lot of the high technology is really addressing some biological problems that our society is having," says Craig Childress, director of prototype design research at human-behavior consultancy Envirosell in New York.

"If you really want to be here down the road, you have to look at consumer trends and change accordingly," says Susie McIntosh-Hinson, a senior vice-president at Food Lion. As a result, the $3.6 trillion U.S. retail industry now spends about 2.1% of its sales a year on technology, up from 1.8% in 2001, according to IBM Global Services' 2003 survey of 78 chief information officers and tech managers.

"The retailer is going to know you -- your size, your brand preferences -- better than you know yourself"

Early results indicate the payoff can be sizable. New gizmos and software can speed up sales growth from about 5% today to 7% to 8%, says Marshal Cohen, chief industry analyst with consultancy NPD Group. Consider this: By recommending curtains that go with the bedding a customer has picked, an in-store kiosk can increase that buyer's spending by 25% or more, estimates Francie Mendelsohn, president of kiosk consultancy Summit Research Associates in Rockville, Md. And an interactive digital store sign that chipmaker Intel (INTC ) is working on might notice that a buyer has put a bottle of shampoo in his cart and suggest a conditioner that complements it.

SAFE DATA? This type of technology has one drawback, however, which could slow its adoption. To make shopping more convenient, "the retailer is going to know you -- your size, your brand preferences -- better than you know yourself," predicts Cohen. That means buying habits, preferences, and personal data will be collected by retailers, potentially sparking privacy concerns. Already, some customers avoid preferred-shopper, or loyalty, cards and make purchases with cash only. As stores get more high-tech, retailers will need to persuade shoppers that they won't sell or misuse their data.

If retailers can ease concerns, the store of the future will unfold. You can catch an early glimpse at chains like Stop & Shop Supermarkets, which is testing a device called a Shopping Buddy. This gizmo is the size of a large purse that attaches to a shopping cart's handlebar. It sports a flat screen that can scan a customer's preferred-shopper card to reveal a list of past purchases. A shopper can then use the data to compile fresh grocery lists, and the Buddy will direct them to the aisles where the items can be found. Research shows that most customers leave a grocery store still having something they wanted to buy but couldn't find.

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