Kiosks and Mobile Devices

How can Kiosks stay viable in a mobile world?  Well, we probably could have asked the same question years ago concerning ticket agents and cashiers when Interactive Kiosks were becoming more prevalent.  Despite these advances in technology, a majority of consumers still prefer to utilize traditional methods.  As an example, airport check-in Kiosks have been available for many years, yet 59% of travelers still check in using the main airline counter. 

Why have newer, more efficient technologies not been adopted faster and by more people?  We can learn by looking at the Technology Adoption Life Cycle (TALC).  This sociological model places consumers into five 'adopter groups.'  Those groups follow a bell shaped curve in the adoption cycle of a particular technology.  Geoffrey Moore also speaks of a 'chasm' that technologies must cross in order to be assimilated into the culture.  According to Moore, the chasm occurs between the Early Adopter and Early Majority groups of the TALC.

Dovetailing with the above theories, there is also an acceleration over time of the creation and availability of new technologies.

"Not only are new technologies being created faster than ever before; they are also becoming accessible to the broader population much more rapidly than at earlier points in history."

Although the TALC is helpful, it doesn't speak on the amount of adoption time involved with each new technology.  With the accelerated availability and development of newer technologies, it could in turn be inferred that the TALC is accelerated as well.  Each technology moves through this adoption process, but the cycle itself may take less time.

Back to the question we first posed, how do Kiosks stay viable in a world that is being proliferated with mobile devices?  Two words, physical location.  Kiosks are placed in highly trafficked locations and offer a physical means for both vending and advertising.  Vending of a physical item in real-time: whether you want to print a paper ticket/coupon, rent a DVD, purchase a product/good or check in at a location, those tasks can all be accomplished seamlessly using a Kiosk.  There is also a physical presence a Kiosk provides, consumers can see and use it 'in the wild' so to speak.  This way Kiosks can work as a bridge to the mobile experience, either by signage on the physical Kiosk or advertisements via the interface.  You can inform consumers about mobile functionality that can be coupled with a Kiosk, functionality that they may not have known of otherwise.

Kiosks are still an important piece in this emerging mobile world.  It will be very interesting to see how both the mobile and Kiosk experiences intertwine and evolve in the years ahead.

Digiboo - A New Way to Watch Movies in Flight

With the advent of Redbox, Kiosk based movie rental has become a viable option.  The convenience of being able to rent a movie while visiting your most frequented locations has really caught on.

Joining the fray is Digiboo, a Kiosk based instant download service. As an introduction to the Digiboo service, let’s play out a scenario:

You have a business flight in 5 hours and just remembered that you wanted to rent a movie to view in flight.  What are your options?

Instant Download (Digiboo)
The advantage of using Digiboo in this type of scenario is that their Kiosks are located in the boarding area of airports.  Typically, many travelers have some time to spare prior to their flight, why not use that time to rent a movie?

You can obtain a Digiboo movie via a USB storage device or the Kiosk provided Wi-Fi connection.  Using USB 3.0 flash memory it can take as little as 30 seconds to download a movie (2 to 5 minutes for USB 2.0 and 4 to 10 minutes over Wi-Fi 802.11n). There are several advantages over other rental services:
• New releases are available every week (coinciding with DVD retail release dates)
• 30 day rental period, 48 hour viewing window
• No need to return a physical disc (the movie is automatically removed from your system upon either meeting the 30 day or 48 hour thresholds)
• Less PC power is drained when watching a DVD

New releases are $3.99 and classic titles are $2.99 (you have the option to purchase a rented title as well).   Currently, you can find Digiboo kiosks in Seattle, Portland and Minnesota.  The service will be expanding to many more major airports soon.
Supported Devices: PC (support for Android expected fall 2012)

Physical Disc (Redbox)
Most Redbox kiosks can be found at gas stations, grocery stores and fast food restaurants.  The rental period is 1 day (ends at 9:00 p.m. the day after you rent).  The cost for a movie is typically $1.20 (+ tax) for a DVD.  You may hold onto the disc past the rental period, but will be charged an additional rental fee for each day the disc is overdue. You may return the disc to any Redbox kiosk in the U.S. once you are finished with the disc (since Redbox kiosks are exclusive to the U.S., returning the disc would not be an option on an international flight).
Supported Devices: Any device with an Optical Drive

Digital Download Service (iTunes, Amazon Instant View, Google Play)
This option requires advanced planning since it is the most time consuming in regards to actual download time.  Depending on your internet connection, it could take anywhere from 20 minutes to 3 hours to download a movie.  Cost is $3.99 for a standard definition movie.  You are allotted a 30 day rental and 24 hour viewing period.  Like the instant download service, once either of those thresholds is met, the movie will be automatically removed from your system.
Supported Devices: PC, Mac, iOS, Android

Streaming (Netflix)
The main requirement here will be an in flight Wi-Fi connection, which can typically run anywhere from $5-$20.  A Netflix streaming subscription is $7.99 a month.  With that subscription you are able to view all of the streaming content provided.  Unfortunately, if you are looking for new releases, titles are limited with this option.
Supported Devices: PC, Mac, iOS, Android

There you have it.  As for the Digiboo service, it is still only in the initial stages.  But, with time, could be a major challenger to other Kiosk based movie rental services like Redbox.  Why not give them a try.

Will the new iPhone have NFC?

With the announcement of the new iPhone set for next Wednesday, rumors are swirling about the expected features. One of those features is NFC. Some have said it will not be included (here and here), while others are saying it is a possibility (here and here). 

In conclusion:

confirmed: new iphone either will or will not have NFC
— Chris Ziegler (@zpower) August 28, 2012

Let's just say for the sake of this blog that NFC will be included in the hardware of the new iPhone.  What could that do for NFC technology?

In our blog written in January entitled NFC Kiosks in Japan, we discussed how NFC adaptation in the US had been very slow in comparison.  60 percent of all cell phones in Japan were NFC enabled.  Meanwhile, only 23 percent of users in the US were willing to use their mobile phone for payment.

According to a survey by techbargains.com, it is expected that 70 percent of current iPhone owners (38 percent of Blackberry and 22 percent of Android) will buy the new iPhone. It will be by far the most popular smart phone to date in the US.

If Apple were to place emphasis on the adaptation of NFC with this new device, there's no telling what that could do for the technology both in public awareness and overall acceptance. 

Back in 2011, Frost and Sullivan asked "NFC: When will be the Real Start?"   With the release of the newest iPhone, they may have their answer.

Complexity and Risks of a Kiosk Project -3

Why Penn's wine kiosk failed: Part 3

In this series, we have been discussing why the Pennsylvania Liquor Control Board's Wine Kiosk project failed. In this post, we will continue to focus on the kiosk malfunctions – over 1,000 reported issues - that served as a critical blow to the project.

The table below is the excerpt of the number and type of malfunctions at wine kiosks from June 21, 2010, through December 31, 2010, published in the special performance audit conducted by Pennsylvania Department of the Auditor General. 

Category	Number	Examples of error messages (excerpt)
Kiosk not functioning	281	· Kiosk is not responding · Out of order messages on the screen
Door and dispensing issues	179	· Door did not unlock to dispense product · Product not dispensed once door is open · Door does not close tightly after sale
ID issues	144	· Out-of-state license not recognized · ID scanner not functioning
Receipt issues	97	· Not printing receipts
BrAC (breathanalyzer) issues	70	· BrAC hardware failure / not functioning
Audio/Visual issues	67	· No audio / Volume too loud · Overhead camera problem
Payment card issues	35	· Signature pad not working · Not processing credit card
Out of stock error message	18	· False " Out of stock" message on screen
Other	28	· Shelf doesn't stop blinking
Total	919

Source: A special Performance Audit – Wine Kiosk Program of the Pennsylvania Liquor Control Board (August 2011) by Pennsylvania Department of the Auditor General

As you can see, almost every single major device had a number of errors.

Here are the lessons we can learn from the list of errors:

There more devices you have, the more challenging integration becomes

As we mentioned in our previous post, the kiosk system was extremely complex, requiring numerous I/O devices.

As we wrote in our post What are the hidden challenges of kiosk application development?, device control is one of the greatest challenges in kiosk software development.  Based on our experience, as the number of devices increases, the difficulty of software development increases almost exponentially.

Why?

Insuring that each of these devices interacts with each other in the right sequence and all out-of-bound cases are handled properly is imperative. Each device should be put through a rigorous testing process both on their own and in combination with other devices.

It is not known whether their policy and contract would have allowed, but if they had reduced the number of devices by using the resources of the grocery store there would have been a higher chance for the project succeed. (For example, if a cashier could confirm that the customer passed the breath analysis and proved their age, he/she could have handled the checkout process. In this way, the kiosk would not have required a special display case and payment mechanism.)

Moving parts are more prone to error

As we can see in the table above, the door and dispensing mechanism was one of the most problematic devices they had. The display doors and metal shields are opened, closed, locked, and unlocked many times a day. Not only is it difficult to coordinate each move, they easily wear out over time particularly if they are left in a harsh public environment.

It is risky to adopt new technologies

Commonly used devices from known companies tend to be more reliable because they have been field tested and all major technical issues have been solved. Alternatively, new/relatively new technologies such as the wine display and breathe analyzer are more prone to encounter unexpected errors because they haven’t been thoroughly tested in the field.

In Summary

The Pennsylvania Liquor Control Board undertook a very ambitious project.  Due to a lack of experience and planning, they sort of met the perfect storm of issues.  Overall, anyone planning future kiosk projects of great complexity can learn from the Penn Wine Kiosk and be better prepared for the challenges they will face before, during and after deployment.

Complexity and Risks of a Kiosk Project -2

Why Penn's wine kiosk failed: Part 2

This article was originally written for and published at KioskMarketPlace.com. http://www.kioskmarketplace.com/blog/8377/Why-Penn-s-wine-kiosk-failed-Part-2

In this series, we have been discussing why the Pennsylvania Liquor Control Board's Wine Kiosk project failed. In this post, we will focus on the more than 1,000 kiosk malfunctions that served as a critical blow to the project.

Complex kiosk system
First, let's discuss the process of the wine kiosks. As we mentioned in the previous post, the kiosk system was extremely complex requiring numerous I/O devices.

Here is how each kiosk was intended to work:
To purchase wine from a kiosk, customers were required to insert a driver's license into a scanner and pass a breath alcohol test. In addition, each wine kiosk was equipped with two cameras so that a Board employee at the call center could observe customers as they made their purchases.

After the customers swiped the credit card and signed the signature pad, a Board employee at the center would unlock the wine display case door. Within the display case itself, there were metal shields surrounding each bottle to prevent product theft. Once customers took the purchased wine from the case and closed the door, it was then to be re-locked immediately.

Continued malfunctions
During the first seven months of operation, customers reported nearly 1,000 malfunctions, which eventually forced the Board to shut down the kiosks during the 2010 holiday season for longer than a month.

According to the report, the vendor, Simple Brands, found "the cause deep within its kiosks in the operating system and in the interactions with the hardware, including the dispensing mechanisms". During the shutdown period, the vendor attempted to fix the problems by rewriting the software related to four components of the kiosks: The touchscreens, the identification scanners, the card readers, and the printers, and "modifying the power distribution to the dispensing system to remedy the non-dispensing issues related to the kiosk doors and the shields".

Unfortunately, the kiosks began to malfunction again almost immediately after they reopened, and the issues were essentially the same as the ones that occurred before conducting the repair. Overall, the Auditor General estimated that as many as 1 in every 21 transactions was problematic.

The box was nice, but...
A common misunderstanding is that a kiosk system can be built by simply placing off-the-shelf hardware and software components together like Lego blocks. Afterward, cover them with a handsome enclosure, attach a nice application interface, and it is done!

The manufacturer of the wine kiosk might have allocated its development resources based on this misunderstanding. Indeed, they seem to have put a lot of effort into the look of the kiosk. As we can see here, the designs of the enclosure, wine display and touchscreen were beautiful and sophisticated.

We agree that aesthetics are very important, but with better planning they could have anticipated the difficulty and risk of development upfront, and focused more resources on the integration of components, development of a reliable and fault-tolerant kiosk system and testing.

In our next post, we will continue discussing technical issues and lessons learned from this kiosk project.

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Complexity and Risks of a Kiosk Project -1

Why Penn's wine kiosk failed: Part 1

This article was originally written for and published at KioskMarketPlace.com. http://www.kioskmarketplace.com/blog/8293/Why-Penn-s-wine-kiosk-failed-Part-1

After reading fellow blogger Michael Ionescu's post "Bad execution: Why good kiosk ideas fail", I did some research to learn more about what was behind the failure of the Pennsylvania Liquor Control Board's Wine Kiosk project.

I found that the 102 page report of a special Performance Audit conducted by the Pennsylvania Department of the Auditor General provided a lot of information regarding the entire project including the contract between the Liquor Control Board and Simple Brands (the kiosk vendor), revenue and loss, mechanical and technological malfunctions, and other operational issues.

What went wrong?
The report lists poor sales, high operating costs, erosion of customer confidence due to continued malfunctions, and shortfall in convenience as the reason for the project failure. Those reasons, as well as 1,000 reported kiosk malfunctions were definitely key issues (I will discuss this in detail in my next post). However, I feel the report did not address the fundamental problem: A huge underestimation of the complexity and risk of such a project.

When I first heard about this project in 2009, as much as I wanted them to succeed, I was really pessimistic about the results because of three primary reasons: First, this kiosk system was extremely complex requiring numerous I/O devices including wine dispenser, touch panel, ID reader, receipt printer, breath analyzer, camera, speaker, and credit card reader. Second, it was such a high-risk/low-return deal for the kiosk vendor. The vendor was to provide service and maintain kiosks at no cost to the Board while collecting small fees – a $1 convenience fee per transaction and a $0.50 advertising fee per bottle. In addition, the vendor agreed to compensate the Board with more than $2 million per year if the Board's expense in operation exceeded its revenue. Lastly, Simple Brand was a new company with no previous kiosk experience.

I strongly disagree with the report that the contract was advantageous to the kiosk vendor. The report also doubts the fairness of the procurement process because Simple Brands was the only company that submitted a bid. In my opinion, other kiosk companies viewed this project as far too risky to undertake.

The results
The results of the wine kiosk program were disastrous – revenues below expectations, costs far exceeding estimates, and continued malfunctions forced the Board to terminate the program in September 2011.

The revenue Simple Brands collected between October 2010 and March 2011, was less than $62,500 – about $36,389 for the transaction fee and $26,091 for the advertising fee. Meanwhile, as of March 2011, the vendor had spent approximately $5 million for development and $9 million for manufacturing. The manufacturing cost per kiosk was $93,000 and installation cost was $3,700 each.

The Board also suffered a loss. As of March 2011, the net income it earned from sales was $206,060, while costs were $1,131,375, ending with a net loss from sales of $925,315.

Not a sustainable business model
Since the report does not talk about the vendor's initial sales and cost projections, we really don't know what business model they had for this project. But even if the kiosks were fully functioning from the start of the project and sales were as projected, it still might not have been a sustainable business model for the kiosk vendor.

Let's assume the sales per kiosk are 210 bottles each week (their minimum sales threshold) and customers buy 1 bottle per transaction. Since it was contracted to run 100 kiosks, the annual revenue for the vendor would have been:

210 (bottles) x 52 (weeks) x 100 (kiosks) x $1.5 (transaction + advertising fee per bottle) = approx $1.6 million

Meanwhile, based on our experience, their development costs ($5 million) and the manufacturing and installation costs per unit ($93,000 + $3,700) don't seem to be too high considering the complexity of the kiosk system and the risk factors in using the new technologies.

$5 million + ($93,000 + $3,700) x 100 (kiosks) = approx $15 million

This $15 million covers only the initial costs and does not include various operating costs. In addition, based on the contract, the vendor was supposed to "bear any and all costs associated with improvements, upgrades, enhancements or other features, providing any and all maintenance services related to each wine kiosk at no cost". In our view, $1.6 million of annual revenue does not seem to be enough to collect the $15 million in initial costs within 10 years of the contracted term and generate a healthy profit.

Unfortunately, both Simple Brands and the Liquor Control Board seem to have underestimated the complexity and risk of the kiosk project, which lead to two devastating outcomes: an unfeasible and unsustainable business model as well as an abyss of technical issues.

In our next blog post, we will discuss what technical issues the wine kiosk faced and the lesson we can learn from them.

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How to minimize the effect of kiosk errors

Kiosk Error Management

This article was originally written for and published at KioskMarketPlace.com. http://www.kioskmarketplace.com/blog/8041/What-are-the-hidden-challenges-of-kiosk-application-development

Let's examine the following scenario to find out how things could go wrong with an in-store kiosk that is not designed to handle errors properly.

In a retail store, a customer is trying to order a shirt using an in-store kiosk because she couldn't find her size in the store. The kiosk is designed to enable her to order any product in the catalog, make a payment and ship the item to her home. She chooses the shirt from the catalog, selects the correct color and size. She then enters her shipping and billing address. Finally, she swipes her credit card through the card reader and waits for her receipt to print... Nothing! The screen seems to be frozen and the receipt was never printed.

She doesn't know if the order went through, and in the worst-case scenario, she may never receive the product even though her credit card was charged! Being frustrated, she talks to one of the floor assistants, but he has no idea what went wrong either. After searching for the store manager, he finally finds a phone number that he can call for assistance. The customer will have to wait for at least a few days to find out what happened with the transaction. Most likely she will not use the kiosk ever again. The kiosk will be kept unplugged until a service engineer comes to fix the problem...

What went wrong?
In this scenario, there seems to be a problem with the kiosk printer or the network, but device errors are inevitable, particularly in a harsh operating environment with public usage. Even if we choose the most durable and reliable devices in the market, we can still expect various issues to arise.

The biggest mistake in this scenario was that the kiosk left the customer and employee confused and upset without giving them any insight into what went wrong or a method to recover from the error.

So, how should the kiosk have been designed to handle the issue differently?

Monitoring and early detection
Continuous monitoring of kiosk devices and software enables early detection of problems. If potential issues are detected early, it can reduce the chance that a customer will actually face a problem like the one depicted in the above scenario. Also with automatic email/SNS notification, a kiosk administrator can be aware of the problem and quickly start taking action, which will greatly reduce the downtime of the kiosk.

Out-of-service mode
Ideally, all problems should be solved before they can actually affect any customer. At the very least, the kiosk should hold in out-of-service mode until the kiosk starts functioning again.

Although it might sound strange, out-of-service mode is actually a powerful tool to prevent the worst-case scenario. Of course, customers won't be happy seeing an out-of-service message, but it is much better than encountering an error while using a kiosk. If they know that the kiosk is out-of-service ahead of time, they can find another kiosk in the store or choose a different course of action.

In addition, an out-of-service message can hide errors that may appear on the kiosk screen – such as a pop-up error message, browser error (such as 404 Page Not Found), or a non-responding screen. Exposing errors is not only embarrassing, but also could pose a threat to kiosk security. For example, a user might be able to access the operating system of the kiosk by tapping a button on a pop-up error window. (For more about kiosk security please see our previous post.)

Problem diagnosis/remote management
Knowing the exact cause of a problem greatly helps to reduce down time and service costs. If problem diagnosis and remote management capabilities are in place, a kiosk administrator can remotely identify, troubleshoot, diagnose and resolve most problems. A service engineer will be dispatched only when kiosk parts need to be fixed or replaced.

Implementing these capabilities might increase the up-front development costs, but in the long term, it will save more money on service and maintenance costs.

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