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IHL Survey: Kiosk Market Rebounds; Customer Usage Up To 70%

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After two difficult years in 2008 and 2009, kiosk shipments rebounded in 2010, according to IHL Group’s “2011 North American Self Service Kiosk Market Study,” released on June 30. Self-Checkout Systems saw the greatest improvement, up 61% in 2010 after a 39% decline in 2009. In total, kiosk shipments increased by 16% in 2010 compared to an 8% drop in 2009.

The big question for the kiosk industry is how mobile technology will affect the business in the long run. The fact is that mobile phones — now owned by nine in 10 U.S. consumers, according to the National Retail Federation (NRF) — perform many similar functions to in-store kiosks and are considered by some industry experts to be “mobile kiosks.” In order to keep up with consumers’ mobility, retailers will likely turn to mobile integration in future kiosk implementations. A few of the mobile kiosk applications that may catch on include mobile device vending and mobile device charging, according to IHL.

The continuing bright spot for the kiosk industry is that, depending upon the situation, consumer usage of kiosks averages between 20% and 70%. Two other statistics, noted by IHL in the Kiosk report, that support the continued growth of kiosks include:

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  • Retailers see a 6% to 8% jump in incremental sales when kiosks are installed in a store, according to KioskCom.
  • Customers currently spend two or more days per year waiting in line, according to NCR.
Focusing on the retail and hospitality industries, the IHL study covers six different types of kiosks:
  1. Self-Checkout
  2. Ticketing
  3. Check-In
  4. Food Ordering
  5. Postal
  6. Other Retail (including DVD rentals)

Other than the obvious challenges incorporating mobile technology into the kiosk environment, businesses also continue to struggle to justify the costs around installing and maintaining kiosks. In order to deliver an acceptable ROI, kiosks must offer benefits such as labor savings and line busting.  As the cost for the machines continue to drop and labor costs rise, kiosk ROI will improve, IHL asserts in the report.

Although the rationale for kiosk installation varies from one retailer to the other, there are a few common findings across the deployments. According to IHL, security is a common concern. And although new technologies do present some unchartered security territory, it can be outweighed by the added convenience the technology provides. Additionally, in the case of kiosks, some products are designed to decrease internal theft, which can be responsible for approximately half (47%) of retail shrink, according to the National Retail Security Survey.

Overall IHL noted the following for Installed Base Growth by (kiosk) Device Type (2010 vs. 2009):

  • Self-Checkout Systems: 5% in 2010 vs. 5% in 2009
  • Ticketing: 6% vs. 9%
  • Check-In: 5% vs. 6%
  • Food Ordering: 7% vs. 9%
  • Postal: 0% vs. 0%
  • Other Retail: 17% vs. 21%

IHL Group predicted check usage at self-checkout systems will be low, based on the fact that customers can use this system as a substitute for the ATM machine, helping retailers in their cash management efforts. Considered the cash cows, ticketing kiosks have been around for years installed in the mass transit arena. Check-in kiosks will see heavy card use among travelers, converting them into ticketing kiosks and a balance between cash and debit/credit for food ordering kiosks.

For the future, in addition to new mobile uses, other new implementations may include  prescription kiosks and reservation and food ordering kiosks for golf courses.

Within the kiosk report, IHL also provides information on best-in-class installations across different types of industries and kiosk providers. For more on the study, contact IHL Group.

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