Coinstar Inc. has had a banner 2009, and with a national footprint of roughly 40,000 kiosks, the $1.2 billion company is setting the bar for retail self-service innovators. Tuesday, attendees to the KioskCom Self Service Expo got to learn from the Coinstar model as Gregg Kaplan, the company's president and chief operating officer, presented the tradeshow's opening keynote session.
Kaplan, who founded the redbox brand in 2002, joined Coinstar when it acquired redbox' DVD-rental concept earlier this year and shared the company's kiosk strategy with attendees during his session, "Growing Your Kiosk Network: The Coinstar/Redbox Experience."
"The question I most often get is, 'How did it happen? What lessons, what principles do you use to grow the business?" he said.
Using a creative and particularly germane approach to his presentation, Kaplan likened four key principles in the brand's kiosk philosophy to themes from well-known films.
Keeping it simple
To make his first point, Kaplan called to mind the example of "Forest Gump": "Isn't it amazing that such a simple man can achieve something so great," Kaplan said.
Particularly when they're championing new applications, kiosk developers must keep their concepts very simple, he said, and should be able to explain the idea in one sentence.
"If the value proposition at the beginning is not very, very simple, the user's not going to get it," he said. "You have to start from there."
Kaplan also advised the audience to keep the kiosk's user interface very straightforward and to avoid flashy, distracting graphics, describing how the steps in the redbox rental process use a minimal number of buttons, which are large and easy to locate.
"If the GUI feels like an airplane cockpit, it's probably not going to work," he said.
Create a compelling offer
Secondly, Kaplan suggested self-service solutions providers make like the title character in "The Godfather," and "make them an offer they can't refuse."
Coinstar and redbox have given consumers that compelling value proposition, Kaplan said, by offering to turn what usually amounts to idle junk into tangible cash or gift cards at Coinstar, and providing the same new release a consumer can get at the rental store for a quarter of the price.
"If it's not so compelling that consumers are going to run to get it, it's probably not going to work," he said.
Innovate and adjust
In the film "Mrs. Doubtfire," the main character was forced to be flexible and creative when presented with a problem, Kaplan said, and kiosk innovators must do the same. In fact, he said, in the first two years of developing the redbox concept, the brand went through dozens of business models as it hammered out pricing, inventory, hardware and placement issues.
"More often than not, the business plan you start with is not the business plan you're going to end up with," he said. "So go into it with the assumption that you need to be flexible. We're still innovating today, and we're still adjusting."
Kaplan illustrated his point by showing the audience an image of a blue redbox, which the company had to create as part of its deal with Walmart, since the retailer requires that everything in its front vestibule feature a façade consistent with its blue and yellow brand.
"That's what you have to do when you're building a business and trying to work with great clients," Kaplan said.
Focus on the economics
The phrase "show me the money" was made famous by the film "Jerry McGuire," and Kaplan said it should be the motto for anyone trying to grow a kiosk business. To make economic sense for both the solutions provider and the deployer, he said, a kiosk must do one of three things — improve efficiency, increase access to a product or service, and provide a return on investment.
"I love the kiosk business because it's so simple," he said. "You're either getting a return on investment or you're not."
