Can Airport Kiosks Help You Gain Retail Leverage? They Did For NEAT!
In Vince Young’s previous article on RetailLeverage.com, he astutely points out that one of the great ways for up-and-coming challenger brands to unleash pent –up demand at retailers is to start by choosing a path to market such as a specialty/boutique retailer. Mr. Young goes on in a subsequent article on RetailLeverage.com to give an example of Rosetta Stone, who used retail kiosks in mall and airports as an early channel of distribution.
Neat Goes to the Airport!
Neat Receipts is another example of this strategy working as a way to get their product ‘out there’, in a highly controllable channel (your own!) to raise awareness and generate demand. The Neat Company, headquartered in Philadelphia, sells a line of products which include a $500 scanner equipped with some super slick, easy-to-use organization software. This proprietary interface (and thus unique user experience) essentially digitizes and organizes your personal finances essentially giving you a digital file cabinet. Information can be then charted, graphed, tracked, retrieved and analyzed very easily. I would imagine that many folks who thrive on tracking every dollar that the household or small business spends would indeed be impressed with this product.
According to their website, Neat Receipts now has 16 kiosks in 10 large airports in the US and Canada. Having walked passed them myself many times, I often wondered, who in the world would buy a $500 scanner while on their way to their gate in an airport? Then as I thought about it some more, 4 good reasons came to mind why Neat might want to sell a $500 scanner in an airport. These are also good reasons why other startups may want to consider a similar strategy.
4 REASONS WHY AN AIRPORT KIOSK CAN MAKE SENSE
- You have a story to tell. Your product essentially requires a demo to close the sale…particularly when your product is relatively unknown. Plopping a $500 scanner down with a piece of POP on a crowded Office Depot shelf will sway no one. Dust will collect and you’ll scratch your head wondering what went wrong with your killer product that was so unique. Next thing you know, you are slashing prices (see my previous article “The Dreaded P” on RetailLeverage.com). Demos on TV infomercials are effective. Demos in retail aisles are effective (aka “Theater in the Aisle.” Retailers and manufacturers spend a lot of time, money and effort to create a demo experience in the aisles (see the Bose displays in Target! Actually see the Bose displays everywhere!) Kiosks, staffed with your owned trained personnel present a simply awesome opportunity to show off your wares in the most controllable experience…your own!
- You need to raise awareness. Instead of buying a TV or radio spot, then closing your eyes and crossing your fingers and praying to your marketing gods that someone heard your message…I mean really heard your message, airport kiosks put your brand and your product in clear view of all the passer-by traffic. Instead of a channel of distribution, think of it as a MARCOM vehicle. Think of the sales as the extra benefit, not the primary benefit. If and when they stop by for the full demo, then great, you’re in the bonus round! At the Atlanta Hartsfield Jackson Airport alone, nearly 90M passengers were recorded to have passed through in 2008. This probably explains why the Neat Company has invested in 4 kiosks in that airport alone.
- You have a relatively unique product that deserves a higher price point. Instead of being forced onto a shelf with other scanners priced at $99 and below, a kiosk allows you to stand on your own terms. NeatDesk is a unique user experience and one that is vastly different than other “scanners” on the market as their demo will clearly show…when given the chance. $500 looks way overpriced when sitting next to a $99 scanner. Isolate yourself from other price points from products that may look a bit similar to yours.
- The kiosk locations are where your target customers frequent. Neat really nailed this one. I am willing to bet my dwindling 401k that no one ever bought a $500 scanner in an airport before Neat arrived however Neat’s target customer, the business, well-educated, financially conscious consumer who needs help organizing their thousands of receipts and business cards, can certainly be found en masse in the nation’s largest airports. And as a bonus, they are often bored looking for something to do to pass the time between flights! Name recognition, demos and customer interaction are at your fingertips.
According to CEO and founder Les Spero, “The product gained traction through direct sales, and then…climbed the retail ladder. It works because each retailer relies on the fact of your success at a previous retailer.” (Philadelphia Business Journal) Since you need to start somewhere, make your first retailer your own channel. This gives you the best chance to succeed. Today, Neat’s products are found on the shelves of the largest Office Superstore chains – Staples, Office Depot and Office Max, many regional retailers and on the websites of such behemoths as Amazon.com.
As a long-term strategy as a sole source of distribution, the costs associated with airport kiosks between leasing and staffing alone probably do not make smart business sense. But for a brand and product getting a name for itself, getting to demo its superior qualities and to not get pigeon-holed into being an over-priced scanner, I give kudos to Neat Receipts for finding a direct channel that enabled them to accomplish their objectives. I have always implored marketers to OWN SOMETHING. In this case, Neat Receipts did just that – they owned their own channel (a highly unlikely one for a scanner) and in doing so, turned what others may have viewed as a channel of distribution, into a powerful advertising and awareness vehicle to notch some pent-up demand. Les Spero goes on to simply state in the Philadelphia Business Journal, “It’s all about the kiosks.”