markets for kiosks and self-service

Kiosks and Consumer Markets

Craig Allen KeefnerExecutive DirectorKiosks.Org Association

Scope - Know Thy Customer(s)

• Market data • Segment data• Overlapping workforce• Technology Future

Market - Numbers

2000 2001 2002 2003

1997 1.5B 2B 2.5B 3B

1998 2.4B 3.2B 3.9B 4.6B

1999 1.1B 1.5B 2.0B 2.7B

2000 1.8B 2.2B 2.9B

2001 2.0B 2.7B

2002 1.7B 2.5B

Market - Revenue

• Bridal Registries– At least 2.5 Billion in revenue

• Photokiosks – At least 1.5 Billion in revenue– In 2 years China #1 market

• Total Revenue*– At least 10 to 15 Billion

* Includes direct and incremental revenue.

Market - Revenue

Company Registries $Value Per Revenue

Target 500,000 2,500 $1,250,000,000Incremental 5,000,000 20 $100,000,000Kohls 100,000 1200 $120,000,000ROM $1,000,000,000

Kodak 1,400,000,000ROM 200,000,000

$4,070,000,000

Note: 2.5 Million weddings a year and 60 percent of those use a registry.

Markets - Segments

• Retail and POS• Services - Financial • Gaming and Travel• Services - Health, Jobs, Food• Services - Hospitality, HR• Directions, Chat, Email, Wireless

Note: Loyalty component is most often common component.

Market - Segments

• Revenue by Segment (projected)•Retail - 36%•Entertainment/Travel - 20%•Financial - 18%•Government - 15%•Other - 12%

Segments

• Entertainment• Hospitality• Fast Food• Grocery Stores• Convenience Stores• Mega Retail• Travel

Categories

Segments

• Does it better utilize existing assets?• Does it Reduce Costs?• Helps with Customer Relations?• Or is it only adding new technology &

costs?

For the Next 12 Months

Segments - Entertainment

• Webcasting company Brando Company plans to begin in April a new business that will distribute content to multimedia kiosks in restaurants.The touch-panel display kiosks will be placed at tables, offering fortune telling and entertainment programs. Customers will pay for the information content along with their bill for food and drink. Brando aims to sign up 1,000 restaurants annually for the terminals. The service will be called "digi+pop TVi," and the content will be broadcast from Brando's production center via communications satellite for download to the terminals. A restaurant operator will be able to adjust the content to suit his own style, region or season.

Entertainment - A year ago


• Digital jukeboxes for pubs and restaurants. Easy to set up and easy for customers to use, it comes with full backend for personalizing the behavior of the unit and full reporting system. Typical pub income at 200 pounds/week with total cost of <5000, the unit pays off in less than 6 months. Also Human Resource and Training modules for off hours.

Entertainment - Last Week at ATEI


• Leisure Link announced “itbox”. Comes in multiple looks and multiple functions and designed to offer simplistic functions to gambling and adult soft entertainment depending on demographic and location (even within the location itself).

Entertainment - Last Week at ATEI

Note: Leisure Link operates over 90,000 pay for play terminals


• Quiz Games - compelling prizes

• Puzzles - innovative puzzle games

• Sports - Racing Tips and Video Sports

• Movies - video clips + commerce

• Music - digital singles and albums

• Adult - the latest in adult entertainment

• Ring Tones - personalize the mobiles

Entertainment - the IT box


• "The Internet attracts a younger generation of player, they sit down at the bar, check their e-mail on Hotmail and then stay there to play games," said Otto Kraus, general manager for Austrian-based electronic games manufacturer AMUsys. "Without the Internet, this younger player may never have the impulse to play."

Drivers

From Stephan Herron article on KioskMarketplace - Feb 1, 2002

Segments - Hospitality

Hotels & Motels

• Overall Market Cap of 58B• Marriot: 9B mc, 2,340 Properties• Hilton: 4B mc, 1900 Properties• Starwood: 6B, 740 properties• Market revenue est at 120B


Hotels & Motels• Biggest question: do we pull CAT5?• Still searching for what the customer wants• Test offers including internet offers being trialed• Dialup needed for security (safe, secure, reliable)• Is it in the home?• 10% of potential broadband in US actually used b• Analog to be around for 5 years• “IP in hotel room irrelevant” -- Marriott

Source: panel discussion with Savoy Group, Carlson Hospitality, Six Continents, Telematrix and Marriott Corp. February 2002 London


• NCR Xpress Hotel Check-In allows guests to check in and check out while enabling you to more effectively utilize your staff by freeing their time for other tasks.

Check In Kiosks from NCR


• NEW YORK (Reuters) - Photography giant Eastman Kodak Co. plans to expand its do-it-yourself Picture Maker kiosk family to places such as hotels, resorts, and Internet cafes, enabling users in remote locations to print pictures snapped with a digital camera. (February 1, 2001)

Kodak Expands To Hotels and Resorts and Cybercafes

Note: U.S. shipments of point-and-shoot digital cameras -- which feature business card-sized displays for quick viewing of snapped photos -- reached 6.5 million units in 2001, up 30% -- Jan 31,2002


• One of the kiosks is located at the Camden Lock Information Centre, located in one of London’s leading shopping districts. Four touchscreens give users access maps and directions to more than 5,000 locations within the Camden borough, including retail outlets, restaurants, museums

and ATMs. -- 15 November 2001

Directional kiosks find their way to England

Segments - Restaurants

Revenue in Billions

42.8

119.6

239.3

407.8

0

50

100

150

200

250

300

350

400

450

1970 1980 1990 2002


• Restaurant industry sales projected to reach record $407.8B in 2002, up 3.9 percent over 2001, according to 2002 Restaurant Industry Forecast. On an inflation-adjusted basis, restaurant industry sales are expected to increase 1.4 percent in 2002, which would represent the eleventh consecutive year of real growth in the industry. On a typical day in 2002, the restaurant industry will post average sales of more than $1.1 billion.


• Top Challenges for Restaurants

Top Challenge Quickservice Full Service OperatorsOperators

Average Check Size<$8 $8-$14 $15-$24 $25+

Economy/ Recession 12 16 21 27 36Maintaining Volume 14 16 17 16 22Recruiting 33 23 14 13 14Competition 5 11 9 11 9Higher Costs 3 11 13 8 2

Segments - Fast Food

• Checkers, the largest double drive-thru restaurant chain in the US, awarded NCR a $2.2 million contract to install NCR point-of-sale systems in 149 restaurants by April, 2001. As it is rolled out to Checkers® and Rally's Hamburger® 700-plus locations over next 2 years, the total value of the relationship exceeds $20 million.

• The total POS solution includes NCR's 7454-a multi-media, touchscreen POS workstation with advanced functionality-and software provided by Aloha Technologies, Ltd. A POS system with kiosk capabilities, the NCR 7454 can be used to run diner promotions or employee training programs when not in use by restaurant personnel.

Checkers


• November 2001 -- Tricon Global Restaurants, Inc., owner of the Pizza Hut, Taco Bell and KFC brands, has become the first quick-service restaurant business to begin implementing a global enterprise data warehouse.

Data Warehousing


• The warehouse is used as the foundation for a number of applications, including sales and consumer promotions analysis, menu mix management and product introductions, as well as to segment and analyze customer purchase behavior across the Tricon brands.

Data Warehousing


• Delphi Display Systems, Inc. was recently selected as the preferred equipment supplier of drive thru order confirmation systems for Taco Bell(R). Also known as Order Confirmation Boards (OCB), the devices integrate advanced digital video electronics with state-of-the-art sunlight readable color liquid crystal display ("LCD") technology to improve the efficiency of the fast food drive thru.

POS and Signage


• Located at order point in the drive-thru lane, the OCB visually confirms customer's orders to improve accuracy and speed of service. Additionally, the OCB functions as a digital marketing medium by displaying full color, high resolution, POP images. Other benefits: access to hearing-impaired customers, bridging language barriers, and employee theft reduction. Goal is improve overall guest experience.

POS and Signage


• 1200 stores in UK (35% franchised).• 30,000 worldwide• McDonalds accepting SpeedPass from Exxon• Testing cobranded loyalty cards. Other ideas

cannot be disclosed.• “Over the next 12 months the dominant force in

the industry will be CRM” -- Chief IS Europe

More Fast Food Facts - McDonalds

Segments - Grocery

Grocery Statistics - Store Sales 1990 1990 2000 2000 10 Year $B Sales Percent $B Sales Percent Change

All Grocery Stores 368.5 100 494 100 34%Supermarkets 271.7 73.7 384.8 77.9 42%Chain Supermarkets 189.8 51.5 314.4 63.6 66%Ind. Supermarkets 81.9 22.2 70.4 14.3 -14%Other Stores 69.9 19 52.2 10.6 -25%Convenience Stores 26.9* 7.3 29.7** 6 10%Wholesale Clubs n/ a n/ a 23.7** 4.8 n/ aMilitary n/ a n/ a 3.6* * 0.7 n/ a

Source: Progressive Grocer

Segments - Grocery

Grocery Statistics - Store Numbers 1990 1990 2000 2000 1990 - 2000 Number Percent Number Percent % Change

All Grocery Stores 145,000 100 127,980 100 -11.7Supermarkets (+2M) 30,750 21.2 31,830 24.7 3.5Chain Supermarkets 17,460 12 20,825 16.1 19.2

Ind. Supermarkets 13,290 9.2 11,005 8.6 -17.2Other Stores (<$2M) 58,250 40.2 37,310 29.2 -35.9Convenience Stores 56,000 38.6 58,000 45.3 3.5

Wholesale Club Stores n/ a n/ a 840 0.7 n/ aMilitary Commissary n/ a n/ a 190 0.1 n/ a

Source: Progressive Grocer

Segments - Grocery

Grocery Statistics - Habits

Day of Week All Shoppers

Under 35

Years Old

35 – 54 Years

Old

Over 55 Years

OldSunday 16% 15% 22% 8%Monday 11% 16% 7% 13%Tuesday 11% 12% 7% 14%Wednesday 15% 15% 12% 21%

Thursday 14% 6% 12% 21%Friday 12% 17% 10% 12%Saturday 21% 19% 30% 11%

Segments - Grocery

Grocery Stats - Sales/Expenses 1989 1999 % Change

1989 - 1999Sales – All Stores 351B 472B 34.7

Supermarkets (>$2M) 257B 365B 41.8

1989 1999 % Change1989 -1999

Payroll Expenses 11.41% 11.20% -1.84Total Employment Cost 14.95% 14.10% -5.69

Supplies 0.92% 1.10% 19.57Utilities 1.09% 1.20% 10.09

Segments - Grocery

• NCR Self service at a Lunds grocery store

• Krogers now uses split level self-checkout in 40% of its traditional checkout lanes (U-Scan)

Grocery Stores

Courtesy of Kiosk Magazine

Segments - Grocery

• Self Service application at Lunds grocery store in Minnesota

Grocery Store


Segments - Grocery

• Self Service deli application at Lunds grocery store in Minnesota

Grocery Store


Segments - Grocery

• Self Service application at Lunds grocery store in Minnesota

Grocery Store


Segments - Grocery

• 2300 Stores in 31 states• 790 Convenience Stores• Discounts & coupons with loyalty card• In 1999, the convenience stores

accounted for 2.5% of Kroger's total sales and 1.8% of Kroger's cash flow.

Krogers

Segments - C Stores

• In the continuing journey to discover feasible applications for the kiosk industry, the convenience store is a source of frequent conjecture.

• In US: +120,000 C-Stores

C-Stores

Segments - C Stores

• A steady, diverse clientele means each store presents many opportunities. But the rapid fire nature of the c-store experience means customers often get in and out with blinding speed.

C-Stores

Segments - C Stores

112 121144 151 156 164 170 175 180

0

50

100

150

200

1992 1993 1994 1995 1997 1998 1999 2000 2001

Sales in Billions

Segments - C Stores

• Phillips66: 12,000 ww• Exxon/Mobil: 5800 US - 45000 ww• 7-Eleven*: 5820 in US -16800 ww• Chevron: 8000 in US - 8000 row• BP Amoco: 29,000 ww• Shell: 46,000 ww

*Southland/-Eleven announced closings on 1/31/02

Convenience Store Numbers

Segments - C Stores

• 12/31/2000 - 29000 worldwide• 17,300 in the US (12,000 franchised)• 7,900 in UK/ROE• Joint venture with Safeway (UK)• Joint venture with Huit a Huit (France)• Poland and Russia expansions• “We are aiming at increasing our per-customer

revenue by attracting retail customers to spend more in convenience stores and business customers to spend more on value-added services and solutions.”

BP: Facts and Figures

Segments - C Stores


Jan 19, 2002 (The Orlando Sentinel) --Solar panels line a canopy above the gas pumps. There's cappuccino and gourmet food in the cafe, lower-pollution fuel in an underground tank, and an Internet kiosk for customers.

Segments - C Stores


Jan 19, 2002 (The Orlando Sentinel) -- Orlando is the first Florida market in which BP has introduced the upscale-oriented convenience stores, which feature a gourmet coffee, pastry and sandwich shop called The Wild Bean Cafe; computer access to weather information, travel data and road maps; a solar-powered electrical system; and a new, low-sulphur Amoco gasoline.

Segments - C Stores

BP: Facts and Figures: In the UK

BP Connect with Gift-stop kiosk and internet kiosks has grown from 37 to 80 stores (120 total kiosks). Another 50 planned in UK with primary focus to be in other markets like US and other European countries.

Segments - C Stores

Exxon: Facts and Figures• ExxonMobil developed new retail facility incorporating the "Best of Both" from Tigermarket and On the Run convenience stores. The new On the Run store features a proprietary café with gourmet coffee, fresh bakery items and hot food service items.

Segments - C Stores

Exxon: Facts and Figures

• More than 300 On the Run convenience stores operate in the United States, with 90 more in other parts of the world. 300 more On the Run sites are planned for key global markets in 2001.

Segments - C Stores


• In May 2000 there were 400,000 transactions at Exxon and Mobil stations.• Projects to over 15 Million total in 2002•Finalized alliance with Tesco grocery chain in UK. 28 cobranded sites by year-end.

Segments - C Stores


• McDonalds piloted with SpeedPass. Now in over 400+ restaurants in Chicago and looking to expand.• Average service time cut from 131 seconds to less than 20 seconds.• Also Nokia 5100 being used..

Segments - C Stores


In France and UK, ExxonMobil is testing Esso Express , an unattended station where customers pay at pump using credit cards, debit cards or cash. The stations have no sales associates, but reps at a central customer service center monitor the site via video link to ensure safety and answer consumer questions via an intercom system. The concept appears to be a popular and viable alternative to traditional service stations in certain markets.

Segments - C Stores

• 1800 delivered as part of Circle K test.• "Kiosks are not inconsistent with our

vision, there isn't anything we can sell that you can't buy anywhere else, so it's a matter of time and speed. That's the focus of this kiosk. We're talking about better access and quicker access to information where you need it and when you need it." said Scott Templeton, Phillips 66 innovation manager.

Circle K

Segments - C Stores

• The kiosks come with 17-inch, multimedia screen that appears at the checkout counter. The main screen includes broadcast content, store information, and advertising, while smaller screens flash current news and weather info.

• Customers use video camera on kiosk to record a message, perform a stand-up routine, or do whatever else comes to mind. Comedy Central uses selected videos as part of a homegrown humor initiative, and Cox is offering $170,000 worth of promotional advertising on its cable systems.

C-Stores

Segments - C Stores

• New cycle for ATM software has begun and is a very large market.

• Multi-function financial transactions now occurring in Convenience Stores

• 185,000 ATMs in the US• Close to 15B transactions in US in 2002 (declining)• Ideas for ATMs include wireless map downloads,

wireless tickets and couponing.

ATMs Poised to Enter New Cycle

Segments - C Stores

Oops.. And don’t forget!

• #1 -- The entire ATM transaction period HAS TO BE under 20 seconds.

ATMs Poised to Enter New Cycle

Segments - Mega Retail

• Target: 29B Revenue, 1000 Stores– Bridal Registry, Baby Registry, now full fledged Gift/Xmas

Registry with complementary Internet mechanism (like Northwest Check-In)

• Walmart: 3200 stores– 1,651 Wal-mart Stores (50 more in 2002)– 1,026 Supercenters (185 in 2002)– 486 Sams Clubs – 26 Neighborhood Markets (20 new in 2002)

Segments - Mega Retail

• Office Depot• Staples• Home Depot• Lowes• Home-Related in General for US

Segments - Travel

Post 9/11 Airlines• + Banks of Luggage Check in Kiosks deployed as result.

One employee services 4 kiosks (like Kroger self-checkout)• + Internet Check-Ins have increased• + Frequent Flyer Aspects Increased/Priority• + Average Time in Airport has doubled• Minuses -- Initiatives in Wireless ID check-ins have been

temporarily grounded (budgets in general).

Overlapping Workforce

• The Flatboy's sleek design is very unobtrusive and compact with its small footprint and wall-mount configuration. This kiosk was originally designed to allow people to apply for jobs directly at fast food restaurants. This kiosk design also lends itself to a wide range of kiosk applications, including public Internet access. All components are mounted to the three front doors, allowing 5 minute field replacement for any combination of components.

Help Wanted


• This is the Bennigan's and Unicru foodservice employment kiosk.

Employment



• Target Stores and other retail store in US have multiple low-end job units to assist with their labor management.

Employment



• Cost to Labor• Staff turnover (2 to 3X a year?)• Problems at entry level• Reduce dependence on training

Employment



• 9,000 Job Kiosks for UK Government• NeoProducts and Mike Smith• EDS• Best case for delivery implementation

Employment


• Continental Tire North America operates several manufacturing facilities within North America. They are developing an internet based employee self-service application for Human Resources related information and transactions. They are also considering moving traditional printed materials such as MSDS, corporate policies & procedures, etc. into an electronic environment. To make information accessible to all employees, we will install several kiosks in the break areas of each manufacturing facility.

Intranet Corporate Systems

Source: RFP into kiosks.org website - January 2002


• Mandate from CIO to set up two cybercafe-type areas in cafeterias, for large (100,000+ employee), multinational pharmaceuticals company. Initial project is to install 6-12 units in Philadelphia (US) headquarters and 6-12 units in London (UK). Ideally, the result will be a drop-in solution that can be reused for other sites in the future, other cafeterias in major buildings, etc., if initial project is a success. The solution must be isolated from the corporate intranet. Must be robust, secure, etc. Web access is the primary goal - no access to internal mail.

Intranet: GlaxoSmithKline

Source: RFP into kiosks.org website - January 2002


• January 31, 2002: Wal-Mart Stores Thursday inked a deal to deploy a self-service expense reimbursement platform.

• It is J2EE compliant, includes a business rules engine, XML engine and zero install HTML client, making it a quick install. Wal-Mart went from conception to deployment on its solution in less than nine weeks.

Wal-Mart Rolls Out Employee Self-Service Applications


• The new North Star portal provides self-service access to information and services from +100 state agencies. Also, citizens find information based on subject area.

• Minnesotans will be able to perform tasks as renewing car license plates, applying for hunting and fishing licenses, and retrieving small business forms and information through the new portal.

Citizen-Centric Content: E-Minnesota

Source: Wednesday January 16 08:08 PM ESTBroadVision Guns Minnesota's E-Gov Engine

Technology - At Home

• The Philips home shopping device, the HSD4000, allows consumers to compile shopping lists of grocery items by simply scanning the bar codes of items then easily download the list to a local food retailer for pickup or home delivery. The technology allows consumers to dramatically shrink the shopping process, especially for items that are bought on regular basis such as groceries, paper-based products, soap, detergents and favorite canned items.

Philips Shop At Home Device

Technology

• AUSTIN, Texas--(BUSINESS WIRE)--Jan. 15, 2002-- Wincor Nixdorf Inc., the leader in the delivery of open systems solutions to the retail and banking industries, today announced a new, compact point-of- sale (POS) appliance. The BEETLE® /iPOS is a high-performance, ``all-in-one'' POS system with the CPU, power supply, and other components mounted directly behind the flat panel display.

• Its attractive, compact, and splashproof design makes it ideal for hospitality and food services, but it performs equally well as a kiosk or in many traditional POS environments where a very small footprint is desirable.

Wincor Nixdorf Launches New BEETLE /iPOS Appliance with Compact, All-in-One Design

Technology

• Installed at convenient locations throughout your store, the MK1000 allows customers to quickly and easily verify the price of bar coded merchandise and obtain up-to-the-minute information on in-store promotions–while they shop.

MK1000 MicroKiosk -Automated Sales Assistant

Technology

• The MK1000 does more than price verification. Its large easy-to-read display can be used as an electronic billboard for instant in-store merchandising and comes complete with the ability to display graphics and text messages to promote seasonal sales, in-store promotions and upcoming events.

MK1000 MicroKiosk - Automated Sales Assistant

Technology

• CERTO solves almost every conceivable self-service task and assists communication with the customer.

• One-to-one marketing, route-finding systems, film check-ins, sales support, Internet access and eMail are just some of the potential applications offered by the column terminal.

CERTO: Compact column terminal

Technology

• The base unit consists of a compact system complete with built-in card reader, high-performance 15“ multimedia TFT touchscreen display and an audio sound system. The PC unit is built into the screen. Depending on customer, the column can be equipped with magnetic or smart card reader, barcode scanner, thermal printer, alpha keyboard and trackball, a built-in camera or a telephone handset.

CERTO: Compact column terminal

Technology - Biometrics

• WASHINGTON (AP) - January 8, 2002 -- The government is working with the states to develop a new generation of drivers' licenses that could be checked anywhere and would contain electronically stored information such as fingerprints for the country's 184 million licensed drivers.

New Drivers' Licenses Study Underway


250.9399.5 523.9

729.1

1049.6

1440.6

1905.4

0

500

1000

1500

2000

$ (M)

1999 2000 2001 2002 2003 2004 2005

Total Biometric Revenues ($M)


2001 Market Share

Finger48.8%

Middleware11.9%

Hand10.4%

Voice4.3%

Signature2.7%Iris

6.2%Keystroke0.4%

Facial15.4%

Technology

• Slow to be accepted but US population open to change in new environment.

• In 1990 -- There were 0 debit cards• In 2002 -- Over 10 million debit cards and and 10

Billion transactions.• National ID system being re-examined.• IBM/HP -- by 2005 SC readers integrated in PCs..

Smartcards Coming Into Vogue Again?

Technology

• December 4, 2002 -- Net Nanny Software International Inc. (OTCBB:NNSWF - news; CDNX:NNS.V) announced today that it has signed Wildspace, Ltd., Junek Ltd. and Joint Future Systems, S.C., which are headquartered in the UK, Czech Republic and Mexico respectively, to distribute its strong user authentication technology, BioPassword®.

Net Nanny Signs International Distributors For BioPassword

Technology

• All three companies will distribute BioPassword, the authentication solution for enterprise networks, and the BioPassword software developer's kit, which enables third parties to incorporate the patented keystroke dynamics technology into their

own applications.

Net Nanny Signs International Distributors For BioPassword

Kiosks and Consumers

• Kiosks.org Association www.kiosks.org/smi• Symbol Technology www.symbol.com• Kiosk Magazine www.kiosk.com• KIS www.kis-kiosk.com• Wincor-Nixdorf www.wincor-nixdorf.com• ePOINT www.epoint.com• TouchPoint www.touchpointit.com• Kioskmarketplace www.kioskmarketplace.com• NeoProducts www.neoproducts.co.uk• NetShift www.netshift.com• NCR www.ncr.com

Thank You For More Information

Kiosks 2002 - Addendum

Craig Keefner is the Executive Director of Kiosks.org Association. The Association is worldwide and its members include vendors, individuals and also users/deployers. It’s mission is to identify and promote the interests of companies engaged in the electronic, self-service kiosk industry.

Working committees include: Marketing and Public Relations, Best Practices, Technology and Standards, Government Relations, Research and Statistics, Advertising and Developing Markets. The President of the Association is Mr.. Richard Rommel of Eastman Kodak and the Chairman is Mr.. Richard Good of NetWorld Alliance.

Members include: NCR Corporation, Symbol Technologies, Wincor-Nixdorf, IBM, Compaq, Intel, Eastman Kodak, MEI, Netshift, Eurocoin, ePOINT and many many others.

For more information or to join: go online at www.kiosks.org/join or call 1-866-240-1318. You can email us at [email protected]

This presentation delivered February 7, 2002 at The Hatton for Kiosks 2002