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Kiosk Roundtable Part I: Kiosk Suppliers See Category Playing a Major Role in 2003



Kiosk Roundtable Part I: Kiosk Suppliers See Category Playing a Major Role in 2003

complied by Bill Schiffner

Advances in technology solve many problems and bring innovative products and services to both consumers and businesses. However, these advances have almost a domino effect in that they create additional needs and, in turn, additional solutions. Nowhere is this more true than in the digital photography arena, where we have seen startling advances in recent years in digital capture and, as such, has generated the need for output products and services to keep pace. A case in point was the announcement of several new digital kiosk products targeted towards the digital camera market at Photokina last year. Digital kiosks are becoming more and more prevalent as retailers turn to these self-contained imaging systems as an easy solution for expanding their digital services while boosting their profit picture. In order to get a better handle on this category, Photographic Processing asked a panel of experts to share their views. The panel for our roundtable discussion included: Craig Wetherbee, senior marketing manager, Agfa; Dan Sullivan, president and CEO of Applied Science Fiction, Joe Welch, director of marketing - Retail Digital Systems, Commercial Imaging Division, Fuji Photo Film U.S.A., Inc.; Brian D. Krasavage, Marketing Director, Kiosks, Consumer Imaging, U.S. & Canada, Eastman Kodak Company; Steve Giordano, Jr., president & CTO, Lucidiom, Inc.; Joseph Leo, Director of New Business Development CPG - NBD Olympus America Inc.; George Briggs, CEO, Pixel Magic Imaging; and Dave Johnson, marketing manager, Digital Photography Broadcast & Professional Company, Sony. Part II will appear in the March issue.

What role do you see the kiosk playing in the retail market in 2003?

Wetherbee: An increasingly visible and vital role. The use of kiosks in the marketplace will continue to expand as the use and understanding of digital products expands. And, as the capabilities of the kiosks and their ease-of-use increases, more locations will offer them; including what we would now call non-traditional locations.

Sullivan: Market research and trade sources continue to emphasize the need for retailer activities that create consumer awareness and promote digital printing services. The photo kiosk continues to play a dominant role in this area for retailers. Consumer acceptance of kiosks has been growing, and will continue to accelerate in 2003 as the demand for additional services such as prints and enlargements from DSC media cards, floppies and CDs, print to print and scan to print services increase. Many consumers prefer shopping via kiosk rather than clerk-assisted transactions because of privacy, speed and their ability to control their print orders. We see more OEMs entering the market offering a wider variety of kiosk options, to provide the functionality, flexibility and customization for the retailer to service their digital customers.

Welch: There's no question that we will see kiosks playing a greater role in the retail marketplace. Research from a new InfoTrends Research study commissioned by Fujifilm found that 68 percent of digital camera owners said they would be interested in using a self-service kiosk to make prints. Although some consumers may still view kiosks as limited to print-to-print applications, new second-generation kiosks fulfill not only the print-print function but also address the huge new revenue opportunities from digital camera developing.

Krasavage: Kodak sees 2003 as an exciting year for retail printing kiosks. The print-from-print kiosk market is firmly established and we expect to see continued double-digit growth for both reprints and enlargements from prints. While this category continues to experience a strong rate of growth, consumer awareness of the product category is still relatively low.

2003 is also going to be a very exciting year for retail digital camera printing kiosks. Kodak is investing millions of dollars on the Atlanta digital camera printing market test that is underway right now and will run through midyear. We have over 500 kiosks in the Atlanta market offering a suite of digital camera printing options for consumers across a variety of types of retail outlets. Consumers will have the choice of "prints in minutes" (via on-kiosk printing), "prints in an hour" (via connection to an in-store lab) and "prints in days" (via overnight wholesale printing) from their digital media. Kiosks are in place at traditional photo retail outlets as well as other channels including hotels, convenience and electronics stores.

We expect to gain very valuable insight into these new consumer needs through the results of the Kodak Atlanta digital camera printing market test. Through this test, we expect to better understand the consumer's needs with respect to service time and convenience.

Giordano: In 1995, the first self-checkout systems were introduced. Now, eight years later, the self-checkout lane has become synonymous with the progressive retailer. These progressive retailers are discovering that the future of self-service rests not only in the technology, but also in the customers' awareness that they increase their satisfaction by taking control of the purchasing process.

For the photo industry, the same holds true. Retailers need to offer an experience that is not only technologically advanced but also improves upon the customer experience. Traditionally customers drop off a roll of film for processing and return for pickup either in 1 hour or the next day. The actual time in the store really never exceeds 3 minutes. A Photo Kiosk or Automated Photo Machine (APM) should have the same transaction time with the advantage of digital imaging. The major advantages being, image selection and immediate enlargements in a single transaction. It is a well documented fact that Digital Imaging is an exploding market with vast opportunities for retailers. What retailers need to focus on is creating an experience that has broad appeal. By offering the customer the choice to use a Photo Kiosk or APM, photo retailers can improve their customer service in the same way that the banking industry improved service by offering ATMs.

Leo: We look for the kiosk to provide a convenient and economical service to digital camera owners in enabling them to get high quality digital photo prints at their favorite retail location. This service will benefit those who are unfamiliar with PC as well as those who just do not have enough time to maintain and operate the traditional home printing method. Certainly, retailers will benefit by providing this service.

Briggs: Kiosks are a great way to interact with consumers and clearly demonstrate what digital product and services look like, and how easy they are to use. We know that the excitement level with consumers is high when they are part of this process, and this excitement often leads to referrals, return visits/revenues and increased customer loyalty. Kiosks will therefore play an increasingly important and profitable role in 2003. First of all, they will continue to improve retailers return on their Print-to-Print kiosk investments. As existing users become more familiar with the growing range of creative output opportunities, so they increase their usage. In addition new users are continuing to find their way to these machines. These dynamics lead to more print volume per machine, and a higher return for the retailer.

Secondly, 2002 was essentially the year to determine whether a) consumers want to make prints from digital cameras in significant quantity, and b) if so, will they want to do it at retail stores? After much testing we now know the answer is yes to both questions. As a result new devices dedicated to printing from Digital Still Cameras are beginning to gain significant adoption. We will see a dramatic increase in the population of these kiosks in 2003.

Johnson: We see digital printing services adding to the value of digital cameras by providing the missing component of the consumer digital imaging experience-turn-key, photo-quality prints. We expect that digital kiosk and countertop systems will continue to fill the void in retail digital photo printing services that consumers increasingly demand.

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