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Posted Date: 3/8/2013

New Customer Engagement Technology for VARs

By Julie Ritzer Ross
“Customer Engagement” continues to be a big buzzword in the retail and hospitality space, with a number of trends emerging on the technology and application fronts. Here, VSR takes a look at some of these developments, focusing on those that are most applicable to the SMB space.

The growth of customer-facing technology markets in general is worth noting. According to NextGen Research, worldwide kiosk installations will total more than 2.5 million units next year, up from 1 million units in 2009. Meanwhile, IHL Group’s (www.ihlservices.com) North American Self-Service Kiosks Market Study pegs the volume of transactions at self-service kiosks as increasing by more than 10 percent annually in North America, with transactions executed via the devices projected to exceed $1.1 trillion per year by 2015. VARs and integrators, says Greg Buzek, IHL’s founder and president, can expect to play an ever more important role in configuring and designing kiosk applications as SMB retailers’ interest in deploying them becomes stronger.

Much the same is true of the digital signage market. According to research firm IHS iSuppli (www.isuppli.com), continuous decreases in the price of commercial displays will push digital signage shipments from 15.4 million in 2011 to nearly 17.3 million units in 2013. Moreover, statistics from the Digital Screenmedia Association (DSA; www.digitalscreenmedia.org), an association of vendors, integrators, and ISVs who promote digital signage, kiosk, self-service and mobile technology deployments worldwide, indicate that digital signage sales to SMBs will account for $697 million of the predicted $1.4 billion U.S. digital signage market in 2013. Even more telling, 71 percent of SMBs are willing to pay a premium for new solutions with a proven ROI.

Mini Kiosks Make it Big
The kiosk category includes smaller-footprint, purpose-built micro kiosks with compact displays as small as five or so inches, as well as kiosks whose display component comprises a tablet computer or similar hardware. While larger retailers have traditionally executed the bulk of mini kiosk deployments in recent years, the explosive popularity and affordability of tablets, among other factors, has sparked heightened retailer interest in making mini kiosks the center of a variety of digital customer engagement applications.

Mainstreet Inc. (mainstreetinc.squarespace.com), a VAR and integrator in Grand Prairie, Tex., is fielding an increasing number of requests for customized shelf-level mini kiosks from specialty stores that want to use the units—many of which feature hardware sourced from BlueStar (www.bluestar.com)—as assisted shopping tools that disseminate product information and convey promotional messages. According to Debbie Simurda, Mainstreet’s vice president of marketing, one of the keys to fulfilling requests for, and selling, customized kiosks is the ability to offer custom-built kiosk enclosures that match retailer-specific needs as closely as does its digtital Mainstreet kiosk solution. One small specialty apparel chain is considering setting up mini kiosk stations where shoppers would be able to peruse “look books” and build outfits from inventory on the sales floor.

Mini kiosks are also winding their way into apparel retailers’ fitting rooms. C. Wonder, a New York City-based, 11-unit women’s apparel chain, has installed iPad mini kiosks in its fitting rooms. Customers can use the kiosks to summon a salesperson to fetch additional items and/or to bring in an iPad from which the checkout process can be completed, as well as to adjust lighting and music. Mike Terzich, senior vice president, global sales and marketing, Zebra Technologies (www.zebra.com), notes the emergence of mini kiosks that have a connection to RFID-enabled smart shelves. RFID readers on these smart shelves read RFID tags embedded in individual articles of clothing. Based on this information, other apparel and accessory suggestions are displayed on the kiosk screens, and commands can be used to let an associate know of shoppers’ interest in having them brought to the dressing room.

In addition to the seemingly unlimited menu of application options for mini kiosks, and the competitive advantage they afford by satisfying consumer demand for rapid delivery of product information and services, VARs would do well to trumpet the financial advantages to be reaped from mini-kiosk deployment. For instance, points out Frank Olea, CEO, Olea Kiosks (www.olea.com), a freestanding mini kiosk built on an iPad platform can be rolled out for about $1,000; other, larger options bear a far higher price tag.

Multi-Functional, Multi-Mode Units Kick In
Like their larger counterparts, SMB retailers see the appeal of kiosks which, by connecting the physical and online presence of the shopper, enable them to more effectively operate in omni-channel fashion, asserts Jerry McNerney, senior director, enterprise marketing, North America, Motorola Solutions (www.motorolasolutions.com). They also appear to recognize that customers’ level of engagement may increase if the technology used to cultivate it allows interaction to occur in more than one mode.

Motorola Solutions’ Customer Concierge kiosk, introduced early this year, affords in-aisle and online merchandise search capabilities as well as video and audio chat functionality. With a variety of screen images, it integrates a touchscreen-driven interactive product browser, digital signage and connection to retail associates (via such Motorola devices as the MC40 and SB1) into a single, interactive device.

McNerney cautions resellers that selling configurations like Customer Concierge necessitates a comprehensive approach. “Resellers would want to position the full package of capabilities (voice, video, mobility, data capture, marketing automation, plus more) to show how the retailer can better interact with the shopper in an automated fashion as well as engage retail associates, both in and out of the store, when appropriate,” he says.

Alternative Delivery Arrives
For VARs that serve SMB retailers in certain verticals where packaged goods reign—notably, grocery, convenience store, drugstore and liquor stores—there exists a widening base of opportunities to promote kiosks that are specifically designed to print out and dispense coupons on demand. Olea Kiosks and Zebra Technologies have rolled out an offering of this ilk; it incorporates Olea’s kiosk enclosures and Zebra’s barcode printing technology. Retailers in all markets can also use the kiosk to distribute coupons they have generated themselves.

Similarly, there has been a move among retail and hospitality SMBs to leverage kiosks to support their loyalty programs. FavoriteEats (www.favoriteats.com), a provider of loyalty solutions for the hospitality market, has installed its iPad-based loyalty kiosks at a number of restaurants, according to Glen Womble, founder and CEO. FavoriteEats employs the MokiMobility (www.mokimobility.com) cloud-based mobile device management platform to lock down and otherwise manage the units. Instead of carrying traditional paper or plastic loyalty cards, customers sign up for restaurants’ loyalty programs by entering their phone number on the FavoriteEats iPad. At each subsequent visit, the customers enter their phone number to receive credit for their purchase and work towards the custom reward determined by each restaurant.

Womble says ROI on kiosks—and any type of customer engagement technology, for that matter—is easier for prospective end-users to understand when applications are presented as part of a package that includes analytics. Such analytics should include usage demographics—who used the technology, when, how (e.g., via voice, touchscreen, etc.) and with what result(s).

Digital Signage Gets Moving
Interactive digital signage is in itself not new, but the technology is evolving in that it is now possible for interaction to occur in multiple ways. One example of this is the series of Experience Stations developed by Intel (www.intel.com) and digital technology solutions provider Inwindow Outdoor (www.inwindow
outdoor.com
). The units’ hardware components encompass large-format, 70-inch touchscreen displays to accept multi-touch inputs. Near-field communications technology permits two-way communication between mobile device-wielding shoppers and the digital signs; for instance, customers can use their devices to activate the screen by scanning a QR code, and personalized messages can be sent back to the mobile devices via the digital signage network. Three-dimensional cameras capture shoppers’ gestures (e.g., removing an item from a display) and control the screen accordingly (e.g. flashing a message about the product or an image of the merchandise in use). Moreover, when shoppers approach the stations, real-time analytics software determines their gender and age and subsequently plays targeted advertising based on the audience demographics.

David Drain, DSA’s executive director, says SMB retailers are on the cusp of experimenting with interactive digital signage of this type; their desire to strengthen their competitive stance against larger players should push them over the edge shortly. Toward this end, and to assist VARs and integrators in digital signage sales as a whole, the association is developing a digital signage ROI calculator that takes into account a number of variables and benchmarks to provide a complete ROI picture.

Social Networking Signs On
Retailers and hospitality players are beginning to extend their efforts to connect with customers through social media by adding a social networking element to digital signage. For example, Ben & Jerry’s flagship store in Tokyo now features a digital menu board that displays the ice cream purveyor’s Twitter feed.

But such initiatives aren’t limited to heavy-hitters like Ben & Jerry’s; SMBs are beginning to see the value of marrying social networking with digital signage as a means of upping the customer engagement ante. Zero-In Media (www.zeroinmedia.com), a digital signage VAR with offices in New York City and Sparta, N.J., was engaged by New York City-based quick-service burger restaurant 4Food to tweak the establishment’s Scala (www.scala.com) digital signage software so that Twitter feeds and diners’ Foursquare check-ins could be displayed, along with digital menu and other content, on its 13-foot by 20-foot LED wall. Michael Schuman, 4Food’s co-founder, says the technology has been very effective in strengthening patrons’ link with the brand.

Despite Schuman’s observation, some sources say certain SMB prospects may express skepticism that leveraging social media within the context of digital signage will have a tangible effect on sales. However, it behooves VARs to emphasize a bigger picture: Twitter support for digital signage enables retailers to Tweet personalized welcome messages for visitors, display Tweets featuring certain hashtags, present coupons and push exclusive offers across the screen. Statistics, too, may serve as fodder for overcoming objections here. Specifically, 66 percent of Twitter users who participated in a recent study conducted by research firm Compete (www.compete.com) said retailer feeds on the social network have influenced their decision to purchase specific products and/or, more importantly, buy from certain merchants.

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