Self-Serve Kiosk Sales To Hit $1.6 Trillion By 2013

North American self-service transactions will top $775 billion this year and will likely beat $1.6 trillion by 2013, according to a new report from the IHL Group.

"The current recession is actually increasing the acceptance of the technologies, as they are a hedge against increasing labor expenses during a tough economic climate," said IHL Group Lead Retail Analyst Lee Holman. "They allow companies to schedule their workforce for high-volume periods without sacrificing service during non-peak times."

Although this growth isn't being sparked by customer demand, IHL found that shoppers have grown accustomed to the do-it-yourself style of buying stuff. "Most consumers have adapted to self-service as a way of life," Holman said. IHL found that 87 percent of consumers report they use self-service kiosks and it said the units "continue to thrive in the grocery arena as well as in certain retailers in the mass-merchant and specialty hardgoods segments."

The findings of the research were on track with IHL's expectations. "I'd be lying if I said anything surprised me about it," said IHL President Greg Buzak. "Consumers now understand it is a way of life and have stopped complaining about it being a lack of service."

Indeed, the down economy seems to have lowered the expectations among consumers when it comes to personalized service. With jobs being cut and venerable companies going bankrupt, cash-strapped shoppers are zeroing-in on what matters most, saving money, and caring less about being treated as somebody special in the store. "When everyone gets used to shopping at Wal-Mart for price," Buzek said, "they complain less everywhere else." Therefore, those consumers are more willing to scan and bag their own purchases.

Increased comfort about buying goods on E-Commerce sites might be another factor behind the growing consumer acceptance of self-service kiosks, IHL said. Shoppers have become adept at getting what they want without the intervention of smiling sales staff or cashiers. An electronic voice from a self-checkout is good enough.

"Part of this consumer acceptance In a market where self-sufficiency often reigns supreme and time is at a premium, new self-service technologies are emerging that revolutionize the way consumers shop for goods and services," IHL said. "The Internet taught consumers how to select and pay for products on their own, and this same technology has been moving into traditional retail outlets for the past decade."

The researchers noted that the ticketing kiosks commonly used in mass-transit settings, are "the most mature of the kiosk types" studied in the report. IHL noted that some airlines are beginning to add a "first contact" transaction capability with these types of units. IHL said check-in kiosks, first popularized in airports by Continental and others airlines, "are seeing a change towards common use self-service (CUSS) devices that allow check-in to multiple airlines from the same unit. "Hotel adoption is ramping up as well," IHL said.

Food ordering kiosks are demonstrating success in convenience stores such as Sheetz and Wawa, IHL said, adding that some "fast casual" restaurants are now using these units "at the table, no less." However, fast-food joints "continue to be reluctant adopters, mainly due to their heavy franchise mentality and the fact that most business is still conducted through the drive-thru," IHL said.

IHL noted that kiosks at the post office "though highly praised for their effectiveness and time savings, are currently in a state of flux as the follow-on contract (to the initial installs) was never funded." Additionally, IHL noted that about 3,200 post offices are being closed this year. "How this news impacts further deployments remains to be seen," IHL said.

DVD rental kiosks, such as those distributed by RedBox, "have been all the rage for the past couple of years," IHL observed. It said other types of kiosks in this group that is growing in popularity "include those at certain DIY retailers for propane tanks and the latest generation of the somewhat ubiquitous photo kiosk found in drug stores, mass merchants and others."