Catalog in a Big Box

A WHILE BACK MY SISTER ASKED ME FOR AN ANNIVERSARY gift idea while we were shopping at a mall. At first I couldn't think of anything my husband and I needed. Then we came across a Tupperware kiosk.

I've long loved Tupperware but it just wasn't something I remembered to buy for myself. I never thought of visiting the company's Web site, hadn't seen a catalog for years and didn't have a clue about Tupperware parties. Faced with a lively looking kiosk filled with Tupperware styles I hadn't known existed, all those stumbling blocks to purchase disappeared. The kiosk was packed with irresistible items, and so I walked away with loads of goodies thanks to my sister and her now-perfect anniversary gift.

(Quick note: There are many types of kiosks. I'm talking about the freestanding, indoor, manned kind often found in malls, not the self-service type.)

I am not alone in my admiration for kiosks. Chick Raven, writer for ChicksLayingNestEggs.com, a financial advice site for women, was thrilled to discover a “Tupperware island” from which she also bought many items. Her column raved about Tupperware.

According to the its 2005 annual report, Tupperware will continue to explore “affordable retail access points” such as “an easily transportable sales venue that may be quickly set up and taken down.”

Avon found that kiosks do more than sell product; they bring in customers who are new to the brand. Avon CEO Andrea Jung recently told Chief Executive magazine that during her firm's tests of kiosks, “95% of the mall kiosk customers had never bought Avon before.” While kiosks may provide exposure, they're definitely an adjunct to Avon's direct sales program. Both Tupperware and Avon still focus largely on their sales forces. For instance, Avon lets its reps sell at retail, or have their own kiosk or Web site.

Not all manned kiosks sell from the unit itself. Dell continually has expanded its kiosk program, but not for direct sales. Its mini-store stocks products customers can touch, feel and get comfortable with, and its staff is on hand to offer advice as needed. Other firms use kiosks based on seasonal needs. Hickory Farms limits such operations most of the year but gears up for the holidays.

The ability to set up a kiosk relatively easily when and where a company wants it is a major appeal. Because of their low costs compared with full-fledged stores (they start at $3,000 but can run up to $100,000 plus), kiosks generally are more profitable on a square-foot basis. Similar to paper catalogs that use ZIP code analysis for better targeting, if sales aren't up to projections there's always the option of moving the kiosk to a more receptive location.

Last December the Associated Press reported that carts and kiosks generate an estimated $10 billion in annual sales, triple the amount reached 10 years ago. It's like having a catalog that potential customers can flip through and see three-dimensional merchandise that they also can touch and feel.

Before opening a kiosk, consider the following factors:

• Determine your No. 1 reason for having a kiosk

  Then do a business plan that treats the kiosk's revenue and expense as a separate entity but includes the effect on other avenues of purchase.

• Location, location, location

  Find out if the mall is targeting the audience you want, and make sure the location within the mall will create sufficient traffic. Go to the potential site and watch how many people walk by and the paths they take.

• Know the competition, which can be extensive

  The Mall of America, for example, has about 100 temporary tenants. Check not just the type of merchandise competitors offer but also the quality. Be certain your landlord cannot suddenly add a store or kiosk that would be harmful to your products or image.

• Knockout creative

  Kiosks must be attention grabbers — organized, not intimidating, and effortlessly accessible. The image must enhance your core business and not degrade it in any way.

• Sizzling-hot merchandise

  While catalog experience might tempt you to lead with your biggest sellers, this is not the place to do the same. Consumers want what is fresh and electrifying (say, for example, a new version or color of a best-seller). Just as you should avoid crowding your catalog's pages with too many items, resist offering everything in one tiny kiosk.

• Negotiate the lease price and contract time

  For retail malls, kiosk income is found money. Monthly leasing costs generally start in the low $2,000s for carts and $9,000 for kiosks. They can jump to $25,000 for popular locations during key seasons. Leases can run from a month to several years.

• Look for hidden costs

  In some cases you may have to join the mall association or contribute to a maintenance fund. If extra storage space is available, this could mean yet another expense.

• The right staff

  The knowledgeable, friendly lady who sold us the Tupperware was a perfect combination of everything you'd want in a customer service or sales rep. She knew her stuff, subtly went for the order and handled the transaction quickly and smoothly. Hire someone who can keep a smile on his or her face at all times; there's no place to hide in a kiosk. Know the hours the mall requires your kiosk to stay open, as this will affect your hiring plan.

• Seriously good security

  A kiosk is not as thief- and vandal-proof as a well-secured store. You need to protect the product and data that will be integrated with your main business. Investigate not only the latest in security for the kiosk itself but also how many guards, electronic monitors and the like are provided by the mall.

• Traffic generation plan

  Kiosks may be cheaper to operate than stores, but a good traffic scheme can go a long way toward making the unit a healthy contributor to your bottom line.

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KATIE MULDOON (kmuldoon@muldoonandbaer.com) is president of DM/catalog consulting firm Muldoon & Baer Inc., Palm Beach Gardens, FL.