Retailers Launch Cyber Kiosks

Borders Group Inc. and Sears, Roebuck and Co. are joining the ranks of retailers installing in-store intranet kiosks to drive sales by making their entire inventory available to shoppers at all locations at all times. And Kmart Corp., which was one of the first retailers to offer access to online catalogs in some of its stores last year, said it intends to increase the number of its wired outlets from 365 to 1,500 by year's end.

By merging their physical and virtual sales channels, retailers hope shoppers never leave a store without making a purchase because items they wanted were not on the shelves. The Web's success as a sales channel has convinced retailers that they can use it to boost in-store sales, said David Cooperstein, senior analyst at Forrester Research Inc., Cambridge, Mass.

"There are a lot of companies starting to do brick-and-mortar high-tech makeovers [by bringing Web technology into stores]," he said. "It's the next step in channel synchronization."

Sears said it expects to roll out its first Web kiosks in its Michigan and Connecticut stores in three to six months. In-store kiosks will access items in Sears' online catalog, which offers more than 4 million items.

"The tendency is to have some sort of convergence between the physical and virtual stores," said Pete Rector, director of vendor management at Chicago-based Sears. "We want customers to have what we call 'any-cubed',order any time, from anywhere, and get it any way they want it."

Borders, Ann Arbor, Mich., is pursuing a similar convergence strategy by testing a handful of kiosks that give shoppers access to inventory in that particular outlet. It will introduce the terminals at an unspecified number of locations nationwide by year's end. Eventually, the terminals will be connected to Borders' central inventory database so every book it holds will be available at all of its stores, said Rick Vanzura, president of Internet and fulfillment services at the retailer.

"We're building interfaces between store systems and the back end," he said. The company is preparing for a surge in electronic orders by beefing up its custom middleware and upgrading its IBM Corp. Net.commerce storefront software.

The next step for retailers is to tailor online catalogs based on the demographics of shoppers at specific stores. Retailers also eventually could use the kiosks to gather information about shoppers in the aisles and use it for marketing purposes. "The name of the game these days is collecting rich customer data," said Forrester Research's Cooperstein.

EDITOR'S NOTE: This story is part of a weekly series exploring the IT challenges faced by enterprise customers, with reporting by InformationWeek, a sister publication of CRN, published by CMP Media Inc.