Posted: 6/2003
The Smarter Way to Vend
By Tara Seals
For instance, Blackstone Calling Card began the nationwide deployment of its patent-pending interactive kiosk earlier this year. The product went into deployment in February and, and the company is projecting there will be 2,500 to 5,000 kiosks deployed by year-end.
Unlike traditional vending machines, the Blackstone kiosk does not display or store live inventory. When a customer makes a product decision, an e-PIN is delivered and the system prints the requested selection onto durable thermal paper stock once payment has been received.
The benefit of e-delivery, besides protecting from theft and fraud, is the assurance of product availability, 24 hours a day, 7 days a week. Blackstone says it continuously updates the products and services at the kiosk, which are automatically downloaded via a dedicated phone line.
"The kiosk offers the retailer an entire category of prepaid products and services -- prepaid cellular and long distance calling cards, gift certificates and gift cards, home phone service, prepaid credit cards, traffic school, loyalty programs, etc. -- without worrying about staffing, inventory, shelf space, training or theft," explains Mike Acton, Blackstone's general manager. "Plus, the kiosk does all the work."
The intelligent part of the product is a user-friendly audio and touch-screen display that guides the customer through the entire purchasing process. It also offers "advice" on selecting the right card by identifying the best calling card with the maximum minutes at that point.
"The prepaid phone card business is of course nothing new," says Gabriel Navarro, owner of Navarro Discount Pharmacies in Miami. "[But] the kiosk offers all of the domestic and prepaid calling cards that a customer can be looking for as opposed to only carrying a few due to inventory/space issues. It is great for the consumer in that they can select the country that they desire to use it for and the kiosk then tells them the most economical card based on the rates per country."
 DataWave's intelligent kiosks |
The intelligent approach has garnered good response overall, says the company. Blackstone conducted a series of consumer tests, the most recent of which ran November 2002 to January, tapped nationally recognized retail chains in the grocery, convenience and pharmacy channels. Once these outlets were selected, kiosks were strategically placed in stores throughout Miami and the outlying metropolitan areas.
"At one location, the kiosk sold more in the prepaid category in one weekend than the category had done in the entire previous year," says Acton. "Needless to say, the test has been deemed a tremendous success by all parties and we are now in the process of deploying the kiosks nationwide."
Opal Manufacturing Inc. is the company that makes the Blackstone unit -- Blackstone took a generic intelligent kiosk and has added its own GUI and customer interfaces. Opal President Garnet Rich says the kiosks "add sizzle" to the industry.
"We offer the basic kiosk and make it unique for the customer through color and graphics, and it ties into various back ends," he explains. "We even have a unit that vends prepaid wireless airtime, and can deliver a handset at the bottom of the machine. What makes these units unique is that everything is done online, in real time -- here is no product in the machine. That makes adding new services limitless."
The ability to add new services is an important dimension for kiosk success, say industry players. "[It's] convenience for the retailer who can now carry over 100 different products and services without having to train an employee on products, rates, minutes, etc., and convenience for the consumer who can run in and purchase a gift card without having to go to the mall, park, customer service, wait in line and purchase a gift," says Blackstone spokeswoman Clare Morgan.
7-Eleven Inc. is taking the all-in-one concept even further. It has developed its own intelligent kiosk, called the Vcom, and is in the process of rolling it out nationally. The unit offers ATM capabilities through American Express, Western Union money orders and money transfers, Western Union's Quick Collect bill payment service and Certegy Check Services check-cashing. Public Access Insurance will offer Instant Auto vehicle insurance. Planned enhancements for this year include touch-screen access to online shopping and Verizon Communications Inc. prepaid/postpaid telecom offers.
 Blackstone's interactive kiosk guides customers through the sales process. |
Even further down the road, the company anticipates Vcom will offer loan and credit services, deposit capability, event ticketing, travel directions and road maps. "Our research tells us that customers want to do multiple financial and personal tasks at one time, have 24-hour access to cash and a choice of convenient locations," says Larry Bullis, 7-Eleven market manager for Richmond, Va., one of the initial Vcom markets.
Customers can use a simple, menu-driven series of options available in English and Spanish to perform their transactions. Those who need personal attention or have questions can speak with a bilingual customer service representative through the Vcom phone attached to the kiosk.
At the current rate of deployment, Vcom units could be installed in 3,500 7-Eleven stores by the end of 2003, says the company.
Another driver for the new vending approach is the self-service aspect of the kiosk. Navarro says the savings from being able to offer products and services without carrying inventory, and no staff to maintain, has translated into a 40 percent increase in revenue.
PreCash Inc., which provides electronic replenishment solutions for stored value products, is marketing its e-PIN units to convenience retailers and high-traffic niche targets, such as supermarkets, and plans to place the kiosk in completely unmanned environments such as airports and malls.
"The benefits for the retailer are labor and opportunity cost savings, a secure location for cash storage, a potential increase in store traffic and a recurring revenue from convenience fees," says John Chaney, CEO for PreCash.
PreCash contracted with Opal to build the PreCash Express Kiosks, to automate the company's refill transactions on its e-payment cards. The machines feature a touch screen with bilingual menus, an optional card dispenser, high-speed printer and a coin mechanism for change.
"Self-service takes the pressure off the retailer," says Rich. "And people get things done quicker without having to wait in line."
Canadian vending provider DataWave Systems Inc. markets its intelligent machines as "remote, unmanned retail stores," because they offer point-of-sale activation, cash/credit card acceptance, detailed reporting and sales analysis, round-the-clock self-diagnostic troubleshooting and automatic inventory replenishment.
Unlike Opal, DataWave's offer is based on point-of-sale technology (PINs reside on cards and are activated via a magnetic stripe) rather than e-PIN delivery (PINs are delivered on-demand, one at a time). The DataWave System is a proprietary, automated direct-merchandising distribution network, which includes freestanding intelligent vending machines that dispense multiple prepaid products and services. The machines are connected to the company's communications gateway and database software through a wireless and/or landline wide area network.
Consumers win too. "At their own pace, consumers are able to research over 100 of the best prepaid products and services on the market (long distance, wireless, home phone service, international cellular service, gift cards and traffic school), review and compare cards and rates -- in real time -- and purchase the best product for their specific needs," says Blackstone's Morgan.
That sort of information at the consumer's fingertips translates into convenience, which in turn, makes the vending option more viable for all involved, bolstering customer loyalty.
To stay in the game and keep that loyalty, vending purveyors also are continually improving the functionality and user interfaces of their machines. DataWave placed its first machine in 1996, but has refined it and expanded its presence since then. It has installed more than 1,500 intelligent vending machines, and it has developed software for remote loading, activation and dispensing of MasterCard cash cards. Future phases and enhancements for PreCash's kiosk include online card association and credit card acceptance. Vcom is a cash-based machine now, but 7-Eleven plans to roll out check, money order or credit card payment options soon.
