new retail concepts

Developing trends

Approximately 40% of U.S. households will own at least one digital camera by the end of 2004, according to InfoTrends Research Group. As the technology becomes more prevalent, consumers are looking for affordable, convenient printing options, and if convenience stores are prepared, they could capture those customers.

7-Eleven Inc. (Dallas, TX) is in the midst of a five-store test of Sony PictureStation digital photo-finishing kiosks, the first phase in a "proof-of-concept" test for a possible larger deployment of the kiosks at 7-Eleven stores. Ron Hannah, category manager for services, claims the photo-like quality, wireless credit-card functionality and quick transaction times sold 7-Eleven on the service's viability in a c-store environment.

The PictureStation's wireless credit card technology lends itself to unattended service and quick transactions. The kiosk deliversconvenience and flexibility by giving customers the option to create everything from wallet-sized prints to 8" by 10" prints, in addition to custom options like seasonal and holiday borders. A customer needs only to insert a digital photo memory card into the machine and, using touchscreen technology, select and edit the pictures they want printed. The process takes just a few minutes from start to finish, based on the number of pictures being produced. Payment is made by credit card.

There are other options in addition to Sony's kiosk. Noritsu, for example, recently introduced the CT-Kiosk—a self-serve, touchscreen retail system that makes printing digital photos equally fast and consumerfriendly. It sees its system as a "bridge" for retailers considering offering photo-developing services, because the small footprint—11 sq. ft.—can be set up as a standalone kiosk or as a self-service "drop-off" terminal for off-site printing.

Customers simply bring in their images stored on virtually any form of digital storage media, insert the disk into the terminal and select editing and print-size options from the touchscreen. Kiosks with infrared or Bluetooth capabilities can transfer photo files wirelessly. Orders can then be sent offsite via Internet to any Noritsu digital mini lab or digital printer for output, or printed onsite. To create a standalone kiosk that offers on-the-spot quality digital printing, operators simply add up to three high-quality dye sublimation printers. Customers can create custom greeting cards, calendars, photo frames and more through an optional specialty print capability.

The Noritsu CT-Kiosk requires a $9,000 to $15,000 investment depending on the set-up, but does not come with wireless credit card function. But with the difference in cost between printing individual digital photos at home or at a retail location—60′ versus 39′—this may be a natural convenience for convenience stores to offer. KB


Invest in a pop-up

On October 1, Target Corp. opened a 2,100 sq. ft. store on Manhattan's Times Square, selling nothing but pink and white merchandise ranging from cashmere scarves and cosmetic kits to flip-flop sandals and T-shirts. The store sold 20,000 pink bracelets in its first week. All told, the chain made $600,000-plus in profits for the month—100% of which went to charity. But if the store was such a star, why did the chain close it just 30 days after opening?

The Times Square store represents a model many retailers, including some convenience retailers, are beginning to invest in: pop-up retail. Essentially, Target rented the space at the world's busiest intersection for the month-long period as a corporate giving campaign, in this instance to support the Breast Cancer Research Foundation. In addition to the stuff inside the store, Target staked out convenience store turf by selling coffee and donuts—pink donuts—at a mobile coffee cart out front. Everything the store sold for the month of October went to support the fight against breast cancer.

Similar concepts are becoming more popular because the consumer is championing them. Customers feel good about patronizing companies that support noble causes. BusinessWeek quoted youth marketing firm Alloy Inc., which says more than 60% of teens surveyed a year ago said they would be more likely to buy brands that support charitable causes. But pop-up retail goes far beyond "cause marketing."

Fas Mart Convenience Stores (Mechanicsville, VA) got a taste of pop-up retail over the summer when it opened a store at Richmond International Raceway as part of a sponsorship deal. The store sold plenty of merchandise—including a minimotorcycle that retails for nearly $500—to tens of thousands of race fans during weekend events. But the fact that the mobile store couldn't sell beer has made the chain reconsider its in-arena store strategy for the 2005 racing season. BD


All this & coffee, too

Starbucks is not about the coffee beans. Rather, the company that defined the gourmet coffee experience is about community and atmosphere and, by the way, its stores just happen to sell coffee.

Now, Starbucks is about music, too. The Seattle-based company is pushing to find new ways for its 35 million weekly customers to listen to and purchase music.

Starbucks has begun installing kiosks called Media Bars in its coffeehouses that enable customers to listen to digital music, create their own compilations and purchase them from a comfy chair while sipping a latt. Starbucks plans to take the concept a step further, according to BusinessWeek, by developing new retail outlets that are music stores first and coffeehouses second. The chain has already opened two Hear Music Coffee Houses in California.

Starbucks customers—especially its core audience of baby boomers who may feel out of touch finding and downloading music from the Web—can use a stylus to peruse different genres from a touchscreen computer terminal. They can select as many as 12 songs or as few as one (at 99′ each) that are burned to a disc that customers pay for with a credit card or a proprietary Starbucks card.

In addition to its retail stores, Starbucks has made other overtures to establish itself as a force in music. For example, the company has launched its own satellite radio service, and it may one day develop its own portal for downloading tunes from the Web.

"We are more than a retail store, much more than a coffee store," Starbucks Chairman Howard Schultz says of his company's new ventures. "We are becoming alternative distribution." Can convenience stores find ways of doing the same? BD


Better than sex

More people like cereal than sex, according to the braintrust behind the Cereality Cereal Bar & Caf (www.cereality.com), a simple but shrewd foodservice concept quickly ramping up near college campuses across the nation. So far, college-age consumers have shown strong interest in the concept, which puts a fresh new spin on a category that until now has been about as exciting as a bowl of soggy Rice Krispies.

The concept seems like a no-brainer: Customers line up in a homey store modeled after a kitchen to choose from a menu of more than 30 different varieties of hot and cold cereals from Kellogg's, Post, Quaker and General Mills, as well as other cereal-related fare. Patrons, who recite their orders to pajama-clad associates known internally as "Cereologists," can customize their meals with toppings, milk crystals to color their dairy and other add-ons.

There's only a few Cereality locations at present—a 200 sq. ft. store at Arizona State University in Tempe, a 1,500 sq. ft. store near the University of Pennsylvania in Philly and one due to open in the Chicago market
51;but that will soon change. The company is focusing its development on companyowned and operated stores as it pursues national expansion, but plans to work with area developers down the road.

Everything about the concept is unique, from the Chinesetakeoutthemed cereal bowls, to the milk fountain (also known as the "Moo Machine"), to the Invent-A-Blend touchscreen kiosk for creating custom cereals. This is proof that food concepts don't have to include overly sophisticated operations or require tons of training and expensive equipment. In the case of Cereality, a good concept just requires a spoon, a leak-proof bowl and customers with an appetite for Frosted Flakes and Cap'n Crunch. BD


Two-in-one tech

Trying to develop or augment an electronic gift card program? Pining for a contactless payment alternative to cash? If you answered yes to both questions, why not kill two birds with one system?

The latest from ViVOtech (www.vivotech.com) combines reloadable gift card technology with a Speedpass-like device that provides retail customers with a quick, new way to pay—without having to pull out a wallet or purse and dig for crumpled bills and spare change. The system also saves retailers time and money, as it can speed up service times, eliminate cash handling problems and has the potential to decrease credit card processing fees.

Customers simply wave a card or fob—which can be customized for the retailer and shaped to look like a gas pump, sandwich or virtually any other form—at a specialized terminal at the point of sale. The radio frequency identification system won't replace cash, but it will provide an option for unbanked customers as well as those who don't have or prefer not to use credit cards. Such a contactless transaction takes only a few seconds, compared to more than 10 seconds for most cash transactions.

In early installations of the combined technology, retailers have witnessed a "20% shift, 20% lift" phenomenon, whereby roughly 20% of customers shift to the technology, and spend about 20% more using the contactless form of payment than they did with cash. Retailers pay a monthly fee for the service, either a flat fee or on a usage basis, which is determined by the number of terminals deployed and the number of cards/fobs issued. BD

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