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The Business Case for Automated Retail Kiosks

SPONSORED BY: SIGNIFI SOLUTIONS

© 2014 Networld Media Group

There’s no doubt that retail is changing, and it’s a rare business that operates in a single channel. Today, most retailers conduct business online as well as through physical locations. According to InternetRetailer.com, online sales for U.S. retailers are projected to grow from $258.9 billion in 2013 to $434.2 billion in 2017. By then, 10 percent of all retail transactions are expected to take place online versus about 6 percent today. And a June 2013 study by research firm Cisco indicated that 3 in 5 consumers around the world would be interested in shopping at a fully automated self-service store with machines that dispense products and kiosks offering virtual customer service.

“Customers are much more savvy today and know what products they want,” said Shamira Jaffer, CEO of Signifi Solutions. “Long gone are the Automated retail kiosks can expand your presence beyond online and brick-and-mortar retailing while offering a hosof branding opportunities

When the Toronto luxury menswear shop Quattro Clothiers wanted to expand its reach and increase its exposure, it didn’t embark on a costly marketing campaign or build expensive new brick-and-mortar locations. Instead, it did so via “The Quattro Shirt Lab,” an automated retail kiosk solution developed by Canadian-based Signifi Solutions. Signifi’s kiosks, called SpotShops, use a tray system to carefully handle the shirts, which carry price tags ranging from $225 to $395. Quattro is placing the units within a three-to-four-mile radius of its brick-and-mortar store as a way to increase its footprint and drive traffic back to the physical store. “The Shirt Lab will attract new customers and turn heads when people see high-end shirts being sold out of a machine,” said Paul Devellis, partner at Quattro Clothiers. With Signifi’s attention to design, the SpotShops definitely attract attention, the benefits of an automated retail solution extend far beyond flash.

The Business Case for Automated Retail Kiosks
By Richard Slawsky RetailCustomerExperience.com
Gone are the days where people had to touch and feel and talk with a salesperson to buy a product. People are buying sight unseen on-line everyday. Automated retail provides brands an intuitive and highly engaging solution that goes far beyond vending. Moreover, retailers can integrate this in their omni-channel strategy.

Additionally, people are curious to try this hip new interactive way of purchasing. Although the idea of buying a product from a machine has been around for generations, automated retailing bears little resemblance to buying a product such as a candy bar from a vending machine. Some of the items
already being sold via automated retailing include apparel, sunglasses, watches, video games, perfumes, makeup and electronics.

Automated retail kiosks area natural marriage of online and physical retailing, creating an additional sales channel by offering the convenience of buying on-the-go while offering the instant gratification of buying from a physical store. San Francisco-based Zoom Systems, another provider of automated retail solutions, is teaming with beauty company Benefit Cosmetics to place “Glam Up & Away!” interactive, branded, retail kiosks in major airports. Benefit Cosmetics will offer 30 of its best-selling products in each kiosk. The company already has installed the machines in major airports, including New York (JFK), Houston (IAH) and Las Vegas (LAS), with additional deployments scheduled.

And Corona, Calif.-based AVT Inc. has teamed with Los Angeles-based juice bar Kreation Juice to develop 24-hour automated juice machines outside its Beverly Hills location. The Kreation Juice machines are just blocks away from a “Cupcake ATM,” an automated retail device that sells Sprinkles Cupcakes. Sprinkles also operates Cupcake ATMs in Chicago and Dallas.

Creating a branding opportunity
Still, for retailers to incorporate automated retailing into their business modelsit has to offer benefits that ultimately will increase sales and add to the bottom line. Probably the most obvious benefit of automated retailing is the reduction in overhead through lower operating costs, a reduction in shrinkage
and increased sales per square foot.

“We could open up at least four Shirt Labs for the price of opening a traditional store, save on the costs of leasehold improvements and reduce management time and effort,” Devellis said. “Automated retail provides brands an intuitive and highly engaging solution that goes far beyond vending.”

According to market analytics firm Asymco, average annual sales per square foot for regional malls in the United States is $341, while the average annual sales per square foot for the top 20 retailers is $787. Some
SpotShops, on the other hand, average more than $4,000 in annual sales per square foot.
While opening a brick-and-mortar location can be a lengthy and expensive process of leasing, zoning and construction, not to mention hiring and training staff, a retail SpotShop can be placed wherever the brand’s prime customers may be, extending that brand’s reach at a significantly lower cost. “If you’re selling women’s cosmetics, for example, you could locate a SpotShop in a grocery chain to reach a different demographic,” Jaffer said.“Or you could locate at an airport to reach travelers if you’re selling those
last-minute products they might need.” In addition to allowing physical retailers to extend their reach at a much lower cost than building additional stores, automated retail allows online provides a great marketing opportunity —huge billboards on three sides and a glass display to showcase our products”

Automated Retailing FAQs

What happens if the product doesn’t dispense?

Signifi’s SpotShops are equipped with a laser sensor system
that guarantees vend, if a vend in one lane fails, the software immediately dispenses from a secondary lane. If the product doesn ot dispense, the customer is not charged.

Can customers return products if they are not satisfied?

The process is similar to returning a product from a catalog or online store. Merchant contact info is displayed on each machine, receipt and LCD screen. Signifi’s SpotShops offer the ability to take back products once the purchaser has spoken with customer service or has met the criteria on the screen. This can be done immediately at point of purchase.

What does a merchant need to operate an automated
retail system? You require a standard electrical outlet and Internet connection.

What payment methods can the machines accept? Different companies offer different options. Signifi’s SpotShops, for example, can accept several different methods of payment, including chip and pin, pay-by-phone, cash, coin, credit card, debit card, gift card, student ID badges and employee ID badges.

Where do I place the units?
Signifi Solutions and Zoom Systems both have location experts and can offer you lucrative locations such as airports and other high traffic areas that fit the demographics of your product.

Does the product we sell have to be in a box?

Though companies have different requirements, Signifi’s Spot-Shops can handle different shapes, sizes and weights. We have the flexibility of dispensing odd shapes from baguettes to jewelry and shirts.

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