Originally created 10/02/00

Kiosks push sellers into the retail world



Sylvia Parker didn't look for an expensive brick-and-mortar store when she needed a place to sell cheap plastic containers.

Instead, the area Tupperware distributor sought out a low-cost alternative to leasing commercial property, and she was able to tap into a huge retail audience without the hassle and overhead of a long-term lease.

No, she's not selling on the Internet. She's at a kiosk at Augusta Mall.

Kiosks, those push carts and booths that have been a fixture at shopping malls, airports and office buildings for more than a decade, are still among the easiest ways to enter the world of retail.

"They really are the best of everything," Ms. Parker said of her push cart kiosk. "I get good exposure and I'm not locked into a 12-month lease or anything like that."

She also need not worry about security, facilities maintenance, utilities and other costs associated with operating a traditional store.

The savings are attractive to budding entrepreneurs, who have turned the specialty retailing segment into a $10 billion a year industry during the last 20 years.

"(The industry) certainly has evolved since the 1980s," said Maria Scarfone, associate publisher of Specialty Retail Report. "Back then it was more like setting up a card table."

Indeed, the kiosks (known in the industry as "retail merchandising units,")can now be found in just about any venue where large groups of people are found. Facility owners have discovered transforming common areas into kiosk space is not only profitable, but gives the overall development a more festive atmosphere.

These days, a kiosk retailer can be anyone from "mom and pops" selling Indian imports to a large chain retailer hawking seasonal goods. More and more large retailers are getting into the kiosk business, making it a more competitive marketplace, particularly around holidays.

Despite the influx of big business, independent businesspeople can still be competitive because most facility operators lease kiosks based on a sliding scale. For example, a large company selling leather wallets will probably pay a higher lease than an independent selling $10 sunglasses and throwaway watches.

"We individually negotiate each deal - there is no rate card." said Arleen Dalton, national director of speciality retail for The Rouse Co., owner of Augusta Mall and several other retail properties nationwide. "We take into consideration things like the product, the location and the time of year and then work out economics that make the most sense."

The Columbia, Md.-based company, like most other property owners, is also flexible on the lease terms. An entrepreneur can lease a kiosk for as little as a week to as much as three months on a renewable basis. That's why its not uncommon to see companies using kiosks to "test market" certain products, to determine whether they are worth stocking in their stores.

Most facilities operate kiosk programs the same way. For their money, the lessees get a kiosk, a chair, a sign and sometimes bags and receipts. Lessees must provide their own employees, fixtures, business licenses, and, of course, merchandise.

Most kiosk merchandise tends to be small; jewelry, watches, vitamins and herbals, weight loss products, and wireless phones and pagers. The kiosks themselves can vary greatly in size and style, but most are portable units, like the Augusta Mall's push carts.

The mall is updating its kiosk program this fall by swapping the carts for a slightly larger tabletop unit with adjustable glass shelves. The unit's bottom bins can be used for both storage and display.

The cost to lease one of the larger units might go up, but the price will still be more affordable than trying to set up shop at one of the permanent stores.

"They are just a great, low-cost way to get into business," Ms. Dalton said. "It's a great way to find out if your business will work without bankrupting yourself."

TABLETOP TIPS

1. Kiosks are an economical and easy way to get into retailing, but standard business rules still apply:

2. Have the right product: Select a product you believe is going to sell. Do some informal market research. Kiosks are typically small, so avoid products that occupy too much space.

3. Have a business plan: You will need to know how much rent you can afford, as well as how much you can afford to pay any employees you may have. Many facilities managers will request a plan before leasing to prospective tenants.

4. Hire quality employees: Most products don't sell themselves. Make sure the person you hire to staff your booth will not spend the day trying to sell your products, not reading a book.

5. Have an appealing display: Spend some time working on the best way to present your products. Many shoppers will overlook a product that would normally be appealing to them because the display area is cluttered or looks unprofessional.

6. Do your homework: Consult facilities managers to find out details about their kiosk programs. Read up on the industry; contact Specialty Retail Report for a free issue at (800) 936-6297.

Reach Damon Cline at (706) 823-3486.