Venky Rajagopal, a businessman from Chennai, is a globe trotter who has been at the waiting end of a hotel check-in counter, rather often. This time around, the Hilton on Sixth Avenue, New York, had a different offering. A kiosk to help hotel guests check-in. Rajagopal walked up to the kiosk, fed it a credit card for purposes of identity and pocketed the card key that the machine spat out. The machine then printed a page that identified the room number, and even gave directions on how to find the elevator. The kiosk machine completed the same transaction in under 30 seconds. That is revolution for you.
And this revolution is just not in the U.S. It has taken place here too. In India, management of kiosks is still nascent, but, the concept is gaining popular ground with retailers and customers alike. And why not? Kiosks offer an optimum solution to both the retailer and the customer- while the cost benefit structure is a plus for the retailer, the convenience factor ‘wows’ customers. To understand it better, www.entrepreneur.com defines a kiosk as a small, enclosed stand from which merchandise is sold, often placed in the common area of a shopping centre or public concourse. The structure of a kiosk could be designed as a standalone like a terminal, or a semi-enclosed booth.
While kiosks became popular in the global market place in the 90s, the turn of the century saw India embrace this successful format largely owing to the fast pace of economic growth. “The development of real estate in urban centres attracts a concentrated footfall of the target consumers. As a result more companies will use kiosks as a medium for sales as well as promotions in the future,” reasons Purnendu Kumar, assistant vice-president, Technopak Advisors. He adds that commercial streets in India are congested with traffic and the lack of space hinders wide scale promotions. Kiosks are an ideal format to catch and retain customer attention.
The food retail industry has made most prominent use of food serving kiosks and one does not fall short of examples- Tibbs Frankie, Hot and juicy American corn outlets or Burgerman. While trying to ascertain the reasons for this rising trend, Kumar says: “For companies looking at generating revenues through kiosks, the product categories should be an impulse or incidental one rather than an informed purchase, as there is a limitation to create a quality shopping ambience around it. This is the reason you will find more food kiosks and even in food, more of ice-creams, hot corn or bakery variety take the kiosk route to expand.”
For companies looking at generating revenues through kiosks, the product categories should be an impulse or incidental one rather than an informed purchase, as there is a limitation to create a quality shopping ambience around it. This is the reason you will find more food kiosks and even in food, more of ice-creams, hot corn or bakery variety take the kiosk route to expand,” says Purnendu Kumar, assistant vice-president, Technopak Advisors.
Essentially, these kiosks are a spruced up version of the street food vendors with an emphasis on hygiene. What makes these “nano” sized business establishments click? N.Lenin, Founder and Managing Director at Pizzaguy, who has been successfully operating ten outlets around the city found kiosks to be a more viable option than a full fledged shop establishment owing to minimal resource requirement in space, manpower, initial outlay and overheads. “We achieve optimal sales in a 3 feet by 3 feet set up with an investment as low as Rs.60,000 in contrast to a restaurant where capital outlay itself runs into several lakhs,” says Lenin. On the other hand, Sunil Cherian, the CEO and founder of Burgerman Foods India, relied on the brand recall that a kiosk brings to his product offering. “A kiosk enjoys greater customer loyalty vis-a-vis a restaurant because the Burgerman signage is seen in many places thus adding to the brand recall value,” says Cherian. The mobility of kiosks plays an important role here. “We sell more than 6,000 burgers a day in a twenty square feet area which an established brand like McDonalds is unable to achieve in Chennai,” adds Cherian.
Managing a food serving kiosk
Most kiosks operate from a common kitchen from where all the raw ingredients are distributed to the employee in charge of various locations. Besides the operational ease of getting a kiosk up and running, the regulatory modalities are extensive but uncomplicated. One needs to adhere to the Food Management Sale certification and the Prevention of Food Adulteration certification, a licence certificate from the city corporation and in addition, local police approval needs to be sought to set up a kiosk in any area.
At the start of the process, identifying a location is paramount. “Eating on the go has become common place as people juggle jam-packed, hectic schedules. Strategically located snack bars and food stands offer consumers quick, convenient snacks that tide them over until their next meal,” explains Cherian. The look and feel of a kiosk is also vital in capturing public attention. “The target customers for a kiosk are the passers-by – often impulse buyers. Therefore, the merchandising and display has to be ‘alive’ and should be able to reach out to grab the customer’s attention in a busy environment,” adds Kumar.
While the positives remain, there are certain negatives that need to be addressed. The sternest challenge that both Chakravarthy and Cherian face is workforce management. Kiosks have a hierarchy where all the kiosk managers or ‘point of sale’ person as they are referred to, report to the kiosk owners. Training kiosk managers presents its own set of difficulties. Typically, the candidates lack social exposure and need to be taught how to interact with customers. In this light, Cherian has started the Burgerman School of Kiosk Management that aims at imparting critical knowledge on how to match customer expectations, both through product and service offerings. The school intends to train people from the lower economic strata who aspire to become small-scale entrepreneurs. Emphasis is laid on customer interaction and maintenance of hygiene amongst other aspects of resource management and fund management.
Even during the economic downturn, retail kiosks were a smart option for the corporate world to cut costs and save resources. Now in the phase of recovery, kiosks are making inroads into sectors other than fast food and beverage. Infact, corporates such as ICICI Bank, Kaya Skin Clinic, Citi Financial, Reliance Money, Club Mahindra and Max New York Life Insurance are already leveraging this opportunity. In addition, the development in infrastructure presents ample opportunity for kiosks to multiply. “Malls, atriums, railway stations, metro stations, airports and the like are being rapidly developed in India and shall witness a larger proliferation of the kiosk format,” affirms Kumar.
Today’s rampant dependence on computers, the popularity of video games and reliance on ATMs are only some of the ways that consumers are experiencing interactivity on a daily basis. Many people have come to expect and even demand a dynamic self-service option that provides them with an alternative to waiting for a service. The presence of a kiosk within a larger retail establishment allows customers to retrieve detailed product information, discover additional services and access a company’s website directly from the store. Over the last decade, consumers have familiarised themselves with touch screen technology in the retail marketplace, particularly through food and beverage ordering kiosks and informational kiosks on tourism.
In the future, product and service categories such as banking solutions, telecom services, flowers, tobacco, books and music and fashion accessories will look to make optimum use of the kiosk retail format. “While kiosks are a cost effective way for banking sector companies to disseminate information about their new financial products, telecom services companies could use them for the trial and usage of various VAS offerings,” says Kumar. Experts say that the future will see not just start-ups or speciality retailers but leading retail chains and established brands looking for kiosk solutions to give their retail presence a needed boost.