Enhancing Retail with Tech-Enabled Kiosks
Reformation (sustainable women’s clothing and accessories) boasts tech-enabled dressing rooms with automated delivery and customizable “Golden Hour” lighting. Lululemon incorporated a yoga studio, meditation shop, and healthy food restaurant into its Chicago store. And, for the ultimate immersive retail experience, SHOWFIELDS combines art and retail into a form of retail theater claiming to be “The Most Interesting Store in the World.” Throughout all of these creative retail experiences, kiosks are emerging as a new way for real estate owners to offer enhanced brand awareness and distribution.
What is a Kiosk?
A kiosk is a small structure in a public area used to provide information, display advertisements, and/or sell products. Whether you’re withdrawing cash from an ATM, ordering fries at McDonald’s, grabbing a snack from a vending machine, or paying for parking, you are utilizing a kiosk.
At Fifth Wall, we consider kiosks across five key characteristics:
1. core capabilities — what can it do?
2. component integration — how does it perform its functions internally?
3. user interface — how does it facilitate transactions and interactions?
4. aesthetic/design — what does it look like?
5. deployment strategy — where is it located?
Historical Kiosk Innovation
Innovation has disrupted all kiosk features, but the magnitude of disruption differs by context. While there are concerns that kiosks might displace human workers, kiosks can actually enhance the performance of human workers.
For example, before ATMs took over, customers obtained cash directly from bank tellers in banking transactions. Although many predicted that these new kiosks would eliminate teller jobs, studies show that the number of tellers increased in the late 20th century as higher efficiency led banks to open more branches. Tellers were also given more opportunities to focus on customer relations and selling new services, elevating both their own skill-set and the overall customer experience.
Enhancing Retail and Food & Beverage (F&B)
The next wave of tech-enabled retail and F&B is just getting started. As customer preferences change, there is evidence that customers often prefer engaging with a self-service kiosk versus a person. For example, a new study from Tillster, a company specializing in ordering solutions, shows that more than 65% of surveyed customers preferred to attend a restaurant if self-service kiosks were offered, and 30% of customers prefer to order from a kiosk versus a cashier if the lines were of equal length.
Here are some ways that kiosks can enhance the customer experience and generate value for brands and retailers:
Brand awareness and advertising
- A kiosk could be a gateway for a brand that has not yet made the jump offline, such as Hims offering a promotion and purchase option directly targeted towards shoppers of a specific mall.
- Some vendors have developed highly creative kiosks such as Carvana’s car vending machine. This is a great intermediate option for traditional retailers who may be more cautious about giving their store a tech-enabled makeover.
Gateway for digitally native brands (DNVBs)
- Kiosks are a lower-cost alternative to a full brick and mortar store and could be used as an intermediate step for a DNVB to go omnichannel.
- Implementing kiosks effectively fuses brand awareness and distribution.
Upsell/Cross-sell
- A customer may never realize he wanted a hibiscus iced tea alongside his Sweetgreen salad if he had not seen the “recommended addition” on the screen.
Customizations
- Full-size screens facilitate visualization and customization of apparel and accessories in dressing rooms.
- Restaurant kiosks enable self-guided menu curation for those on special diets.
Delivery
- Reformation incorporates automated clothing selection and delivery in its fitting rooms through an automated kiosk — seamlessly blending the online and brick-and-mortar shopping experience. Customers avoid the potential embarrassment of hailing a store attendant while partially clothed, and the retailer instantly receives insights about popular items in store.
Retail is just one area where kiosks are transforming the customer experience. Fifth Wall sees significant potential in this segment for residential, office, and hospitality applications and looks forward to continuing to follow this section of the retail sector closely. To learn more about our perspective on kiosks, please contact Kevin Campos or Sarah Liu, and sign up for our Retail and/or Real Estate Technology newsletters.
The above is presented for informational purposes only, is not intended to recommend any investment and is not an offer to sell or the solicitation of an offer to purchase an interest in any investment vehicle managed or sponsored by Fifth Wall. This document speaks as of the its publication date or as of specific date(s) as noted, and Fifth Wall undertakes no obligation to update any of the information. The information above has been prepared from original sources and information Fifth Wall believes to be reliable, but Fifth Wall makes no representations or warranties as to its accuracy or completeness. Forward-looking statements may express Fifth Wall’s expectations for future events, but there can be no assurance or guarantee as to specific future industry trends or investment or performance outcomes.
