Report: Self-Service To Top $1.7 Trillion By 2012

North American self-service transactions will process $607 billion this year, a figure that is projected to soar to $1.7 trillion by 2012, according to a report published Wednesday (June 18) by the IHL Group.

When IHL began work on the report, "I did not expect the acceleration that we're seeing in the out years," said IHL President Greg Buzek. "I did not expect how fast it's growing."

Ironically, Buzek said, the jump in later years is being partially caused by the sales slowdowns of today. As dollars are getting tighter, retailers are pushing more sales through less-labor-costly self-checkout systems and paying for the installation of more such systems. Those additional machines, over the years, will increase the number of dollars being processed by self-service.

Also, IHL is seeing self-service units moving into different kinds of retailers, beyond the initial grocery deployments. That will likely cause the average self-service transaction size to increase, which was another key factor in the higher projections, Buzek said.

Not all self-service systems are expected to do as well. Self-checkout systems are projected to process about $161 billion this year and $446 billion in 2012; ticketing kiosks will hit about $298 billion this year and then soar to $1.2 trillion in 2012; check-in kiosks will hit $44 billion this year and then actually drop to $32 billion in 2012; food ordering kiosks will eat some $31 billion this year and then climb to $48 billion in 2012; and postal kiosks will stamp some $308 million this year and then climb to $419 million in 2012.

The projected actual drop with check-in kiosks seemed unusual and Buzek said it was impacted by quite a few factors, but the evolving definitions of check-in kiosks were ticketing kiosks impacted it more than anything else.

The explanation starts with stressing that this is based on revenue and not on the number of units. Also, if a consumer goes to the Web (or calls a toll-free number, for that matter) and buys a ticket or a hotel reservation and then uses the kiosk to merely check-in and pick up the ticket, IHL chose to not include those dollars in their calculations. "We only count the additional revenue such as meals, etc.," Buzek said.

Another factor: IHL made the assumption that airline downsizing—mergers, acquisitions, severe cutbacks, etc.—will likely cause a direct reduction in the number of kiosks. Continental, for example, may yank their kiosks from cities they no longer use, he said. Although IHL sees an increase in the number of hotel check-in kiosks, it's not enough to overcome the loss of the airline units, especially if those kiosks are merely confirming Web purchases.