Kiosks introduce a myriad of purchasing options/services

Filed under: News |

Let’s do a little Freudian word association between company and product. 7-Eleven … auto insurance. McDonald’s … DVDs.

Not what you would have said? You’re not alone.

Yet the association is not as farfetched as you might think. 7-Eleven stores in four states have replaced standard ATMs with Vcoms, a kiosk that is roughly four feet wide. With a phone, a touch screen, a number pad and a voice that sounds like James Earl Jones, these kiosks do more than the standard Internet surfing or cash withdrawal.

John Napier, the manager of the 7-Eleven at Nevada and Cache la Poudre, said his store was one of the first to get the Vcom kiosk, early last year. “It removes obstacles,” he said. “Cashiers still sell money orders and phone cards, but now customers don’t have to wait in line if they’re in a hurry.”

The money orders printed by the kiosk are identical to those sold by 7-Eleven employees – the kiosk charges the same rate and prints the store number on the money order “so customers can bring it back if they don’t use it.”

Included in the many functions of the machine is Western Union transfers. “I get calls all the time from all over the country. If parents of students at Colorado College need to send money, they can go any Western Union office in the country and students can pick up the money here 24 hours a day, seven days a week.”

Need auto insurance? Step right up and Public Access insurance will connect you with a variety of carriers from Progressive to Dairyland. Need a phone card? Verizon offers both domestic and international long distance rates.

Colorado Springs is a major testing ground for the technology, which is also springing up in Texas (7-Eleven Inc.’s headquarters is in Dallas), Florida and Virginia. With 36 7-Elevens in town boasting Vcom centers – which also can handle check cashing and bill payment – local residents say they’re everywhere.

“I thought, ‘Wow, that’s a really big ATM.’ They used to have really small, compact ones. Then I walked into 7-Eleven and they had this monstrosity,” said Brian Robinson, who frequents the 7-Eleven at Nevada and Cache la Poudre several times a week. “I’ve used it as an ATM and I’ve also purchased a phone card.”

The kiosk is usually nestled in a corner near the front entrance, providing “privacy.” Up to 30 bills at a time can be processed. For auto insurance, a VIN and driver’s license number are required, and all new policies are discussed with a licensed sales representative over the phone.

“We don’t sell an auto insurance policy without talking to the customer,” said Les Schlesinger, president of Public Access Insurance. “We want our customers to have the counsel that a licensed professional provides. Studying the industry, the Internet has not been that successful. It’s a good lead generator, but self-service really hasn’t gotten here yet.”

With more people shopping, paying bills and transferring funds online from the comfort of their homes, it only makes sense that businesses would take advantage of another market – those without Internet access.

“Though Vcom functions as an ATM, we added key financial services customers have asked for,” said Brady Giddens, managing director for 7-Eleven Inc. “We’ve offered ATM services for more than 10 years, but a lot of customers wanted to pay bills and transfer money orders. We’ve been selling phone cards since the mid-90s.”

Like their ATM ancestors, Vcom machines operate on a cash basis, for the most part. Check cashing was a natural leap to make, but customers now can buy “credit” with their cash. After putting in bills, out comes a MasterCard. The “cash cards” are used like a debit card, with a predetermined storage of funds available.

Besides the unusual union of 7-Eleven and auto insurance, several McDonald’s restaurants have started renting DVDs through lobby kiosks. While children play in the plastic playground, parents can rent and return films such as “Gangs of New York,” Martin Scorsese’s epic.

“I think kiosks can be a wonderful thing in the right place,” said McDonald’s franchisee Steve Bigari, owner of 12 restaurants in Colorado Springs, who says he hasn’t added kiosks to food service just yet, though he knows several owner-operators in Denver who have the machines.

After testing well in Washington, D.C., and San Francisco last year, the DVD rental kiosks are springing up in Colorado. A McDonald’s on Broadway Avenue in Denver serves up French fries at the counter across from the kiosk, which has a slot to receive or return DVDs and a large sealed door with several dozen different titles.

An interesting trend is taking root. Not only are services other than those expected offered at a variety of locations, but those services are being offered by a machine. And sometimes that machine comes with a voice.

Indeed, in many cases machines have replaced people. Gone are operators, the informative tour guides, the knowledgeable clerks. Kiosks can, and in many cases, have replaced them. No need to hire employees with upbeat demeanors, experience in customer service and knowledge of the product when an interactive touch screen can do the job better.

“This use of kiosks is driven by the need for companies to improve productivity and reduce labor costs, so yes, the idea is to replace employees,” said Larry Stimpert, who teaches business management at Colorado College. “If you are or want to be an employee at one of these companies, then it is a bad, but inevitable, trend. Many companies – McDonald’s would be a good example – are quite eager to find ways to improve productivity and reduce labor costs.”

He also said that the change isn’t all that unexpected.

“Sure, it’s a bit surprising that McDonalds is now offering DVD rentals. On the other hand, one might ask why McDonald’s hasn’t thought of it sooner?” Stimpert said. “In Japan and Korea, convenience stores like 7-Eleven sell a much wider range of products and services, so what we are seeing develop here is really a catching up with what has already occurred in some other countries and markets.”

Still, it might take a while for U.S. consumers to embrace the concept.

“It’s huge and intimidating,” said Elizabeth Shick, a 7-Eleven regular. “But it does everything. … It makes sense that a convenience store would make all those things convenient.”