Kiosks' slow ROI may not slow their growth

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By: Wise Marketer Staff |

Posted on March 14, 2006

Many kiosk deployments are not meeting their expected ROI, although continued investment is still expected, according to Venture Development Corporation's latest market report, entitled 'Kiosks for Self-Service and Interactive Applications: Technical and Vertical Market Analysis'.

Despite a lack of ROI on many kiosk initiatives, VDC found that users recognise the technology's importance, as well as its future uses, and are now placing greater emphasis on requirements for solution providers.

Forecast for 2007
These changes contributed to VDC's forecast that the kiosk market (which reached over US$330 million in 2005) will exceed some US$480 million in 2007, growing at a compound annual growth rate (CAGR) of 20.6%.

EXPECTED ROI % users           REALISED ROI % users
< 12 months 37.5%   < 12 months 13.8%
12-18 months 23.8%   12-18 months 17.5%
18-24 months 12.5%   18-24 months 38.8%
2-3 years 26.3%   2-3 years 30.0%

Table 1: ROI from self-service/interactive kiosk projects
Source: Venture Development Corporation

Reasons for a slow ROI
In the survey, the main reasons cited for such early frustrations included:

  1. Development and deployment schedules are not being met;
  2. Kiosks are not operating at required performance or reliability levels;
  3. Kiosks are not as easy to use as they need to be;
  4. Users are not reaching their customer visit and transaction goals;
  5. ROI is falling short.

Future still bright
According to Christopher Rezendes, project director for the report, "Our findings provided evidence that the right kiosk deployment can enhance consumer experiences in a broad range of retail businesses. In turn, these enhancements can contribute to higher transaction values and reduced costs in processing these transactions."

"We expect that retailers from a broad range of segments will invest more of their IT, merchandising and logistics talent to deploy kiosks in ways that have immediate and material impact on their customers' experiences and their business units' income statements," Rezendes concluded.

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