Starbucks pulls CD-burning kiosks

After a much ballyhooed trial (yikes -- I've already mentioned it three times in this blog):

Music kiosks changing the retail landscape...
Consumers give digital content kiosks the thumbs up
Red tape could kill stores' CD-burning kiosks

it looks like Starbucks is going to call it quits with its in-store CD-burning solution. As this article from Seattle-PI tells us:

Experts blame iPods, and the ability to burn CDs on home computers, for curbing the success of what Starbucks had hoped would be a hit.

"Launching the service without the ability for customers to download music directly to their MP3 players was a major misstep," said John Moore, a former marketer for the Seattle-based coffee giant who now runs Brand Autopsy, an Austin consulting firm.

In 2004, Starbucks announced with fanfare that Austin and Seattle would be test markets for its Hear Music media bars. Working with Hewlett-Packard Corp., Starbucks developed touch-screen computer kiosks that allow customers to download music from a bank of about 200,000 songs, burning them onto CDs at 99 cents a track.

Less than two years later, Starbucks has removed the equipment from most of the stores. In the remaining stores, the kiosks recently were upgraded with new software and a larger bank of more than 1 million songs. Starbucks chose the 10 stores based on the popularity of the kiosks.

Starbucks execs deny that this wasn't their plan all along, but you'd hardly expect them to say something like "yeah, this was an utter failure, we totally missed the boat" (well, they'd probably say it in executive-speak, but you get the point :)

Argentina bank to deploy self-service kiosks

Kioskcom.com tells us that, "Diebold, Incorporated will provide more than 300 self-service terminals, including its Opteva(R) automated teller machines (ATMs), to Banco Rio for installation at branches throughout Argentina."

The press release then goes through the obligatory list of quotes from relevant Diebold and Banco Rio employees, and gives a non to Diebold's "advanced security software," which must be something only found on their ATMs, since it seems like their automated voting kiosks are hacked constantly.

There has been a good amount of press given to the "super-ATM" over the past 12-18 months, and I think it's a fair bet that this type of interactive kiosk is going to become a lot more common in the near future. Additionally, I wouldn't be surprised if much of this growth started outside of the US, considering that there are many fewer old-style ATMs to be replaced in less developed nations. Whereas here you'd have to toss your capex and start all over replacing hardware, elsewhere you can almost start from scratch.

IBM Introduces New 17" IBM Anyplace Kiosk

We knew it was coming... we saw it at KioskCom... and here it is! According to this press release, IBM has released a 17" version of their Anyplace Kiosk, one of the best all-in-one kiosk devices that I've seen yet. From their PR:

IBM announced today its first ultra-compact kiosk with a 17" touch screen. The new IBM Anyplace Kiosk 17" models are designed to enable business innovation in a bigger, bolder way. They can now be used in more ways to heighten the customer experience and expand the usage of self service kiosk solutions across a variety of industries, including retail, travel and transportation, entertainment, and healthcare.

Highlights of the new models include:

- At 17 inches, models offer a big screen in an ultra-compact all-in-one unit
- 1280 x 1024 resolution offers better clarity and more detail than smaller IBM models
- The bigger touch screen makes it easier for several people to view at once.

If it's anything like its 15" predecessor, this Anyplace Kiosk will be a good performer in the high-end self-service application space, particularly because of its strong multimedia playback capabilities.

Fujitsu releases new self-ordering products

Self-service ordering is becoming an increasingly hot area in the interactive kiosk/self-service solutions marketplace these days, with major venrods like Subway and McDonald's trialing the systems to improve efficiency (though whether they'll ever get the green light for a mass deployment is still anybody's guess). From the press release:

The self-ordering systems combine newly designed Fujitsu hardware with self-service applications from software partner NextChoice Systems to offer consumers increased ordering, payment and personalization options. The units are fully upgradeable and available in several installation configurations to accommodate various restaurant, grocery and hospitality formats.

According to a January 2006 study from Venture Development Corp., "Kiosks for Self-Service and Interactive Applications: Technical and Vertical Market Analysis," North American shipments of self-service and interactive kiosk systems are expected to achieve a compound annual growth rate of nearly 20 percent from 2004 through 2007. Within the segment, self-service ordering ranked highest in the study, based on scoring criteria that included fast return on investment, high market growth rates and high consumer-adoption rates.

So Fujitsu seems to think this is a pretty significant area for growth. I'm still not totally sold on the premise of self-ordering, but then again, I don't hang out around fast food restaurants during their busy periods, so I'm not exactly one to be making qualified judgements in this case :)

Brand kiosks to improve ROI and usage

Kiosk Marketplace has posted a very nice article about branding self-service kiosks for use in retail (and other) environments. While I've seen some articles like this before, I was particularly pleased to see this one address branding from both a hardware and software perspective, as well as from a built-it (custom) versus buy-it (off-the-shelf) standpoint. Here's a short clip:

Kiosk enclosures fall into three basic categories: stock, semi-custom and custom, according to the level of branding. However, while it is easy to see high-profile, custom designed enclosures as examples of good brand integration (and some of them truly are outstanding), it is important to note that an effective, integrated brand message is not necessarily limited to custom work. Most enclosures — stock, semi-custom or custom produced — can effectively convey the intended message when the client simply follows a few basic steps during the planning phase of the kiosk project.

Step 1: Articulate the message. In the same way that step one in making a business case for any kiosk project is to define the ROI (return on investment), step one for the marketing aspects of the project is to define the ROP, return on perception. The client needs to define what perception they want the customer to have when they see the kiosk, use the kiosk and what they will take away and remember of the experience. Whatever the client wants to convey (for example: strength, fun, service, excitement, safety), the manufacturer can’t build it until the client defines it.

Step 2: Create a collaborative environment for the vendors. To obtain a fully-integrated experience for the user, vendors need to work together to share brand assets. Too often clients fall into the trap of “which to do first — enclosure or software?” The most effective methodology is to develop each in tandem, with a free exchange of ideas between the software developer and hardware/enclosure providers. This produces an integrated solution where the software and hardware become a seamless experience for the user.

Step 3: Just because you can, doesn’t mean you should. Keep it simple — and that means everything. Sophisticated technologies in both the software and hardware realm offer a dizzying array of possibilities for functionality and design. The kiosk that tries to do too much and offers too many options can easily become overwhelming and leave users confused to the point where they do nothing and walk away. The same holds true for branding and design elements.

Go ahead and read the full article here.

Borders to test additional CD mix-and-burn kiosks

Kiosk pilots always make a lot of news (well, in the kiosk industry, anyway), but post-pilot rollouts, which are arguably more important since they suggest the kiosk's business model was validated, are typically less noteworthy for some reason.

So it was good news that InternetRetailer wrote this little article about Borders expanding their use of in-store kiosks. This functionality will either come in the form of new kiosks, or additional functionality on some of their existing kiosks, which are used to do book searches, product wayfinding, etc. As they note:

It’s another effort by Borders to drive increased utility out of its installed base of store kiosks, which [Kevin Ertell, Borders’ director of interactive marketing, loyalty and CRM] says the company is moving to put at the center of any web- or computer-focused communication with customers in its stores. “The mix-and-burn piece would be part of that, as well as being able to look up or locate books in the store,” Ertell says. “We know from our research that there are a lot of customers who want to do these things themselves, so we have that capability for them. And we also have our booksellers available there to help them with anything they may need.”

New kiosk system provides coupons on demand

While there's nothing particularly new about interactive kiosks dispensing coupons in retail locations, the business model described in this article at Kiosk Marketplace makes it seem pretty unique. Acting as something of a broker/clearninghouse for all sorts of coupons, the Matthias MoneyBoard machine and back-end system will allow vendors to pre-purchase coupon "slots" on an interactive kiosk for up to a year at a time. Presumably they're allowed to change the terms of their offer over that period of time, since I don't think I've ever seen a coupon that has run for quite that long :)

The inventor says that his way of dispensing coupons is less wasteful (as opposed to free standing inserts in newspapers), and reaches a greater percentage of interested shoppers, which translates to an up to 50% cost savings over traditional couponing methods.

While I can't vouch for that statement one way or another, the clearninghouse model makes sense to me. The real question would be whether or not people would wait to get to a machine, rather than looking for comparable offers on the Internet, from the comfort of their own home. Still, it might be a good vehicle for brand conversion or incremental sales. If it takes off, we'll certainly be hearing more about it.