Eastern and Central Europe: Ripe for the kiosk industry? | Features

“This is not happening overnight,” said Rene Lager of IBM Retail Store Solution Sales for the CEMAAS (Central Europe, Middle East, Africa and Association of Southeast Asian Nations). “People are starting to get used to it and starting to expect (kiosks). They’re looking for them sometimes and asking if businesses have a kiosk. The retailers in this area are starting to fulfill those requests.”

Growing a self-service market

NCR brought its first ATM to Lithuania in 1995. By the end of 2007, Central and Eastern Europe found itself playing catch-up with neighboring countries in Western Europe, with 305 ATMs per million people in use around CEE, compared to 707 per million in Western Europe, according to Retail Banking Research.

In Romania, where roughly 84 percent of citizens do not have bank accounts, Citibank is unveiling multifaceted ATMs that are enticing consumers to open accounts and use the machines to pay bills and speeding fines. The technology is being credited with helping curb a significant problem of late payments that were spurred by residents in the mostly cash-based society who often had to take time from work to settle bills, but often failed to make it in time.

And this year, back in Lithuania, supermarket chain IKI signed on to offer the country’s first self-checkouts, which will be NCR FastLane machines that allow consumers to scan, pack and pay for goods themselves.

Despite the gradual pace with which kiosks have been implemented, representatives from several companies say that’s just the way new markets open. They take time to materialize.

The crumbling of the Soviet Union and the creation of breakaway nations in the 1990s paved the way for the kiosk industry to step in. As more borders have opened, the ability for companies to reach new customers has become easier.

The barriers facing kiosk businesses, with headquarters outside of the region, is that they must make connections and forge relations with local partners.

Wincor-Nixdorf, which specializes in self-service recycling machines outfitted with kiosk interfaces, started placing its popular machines around CEE three or four years ago. Movements by nations to become more environmentally friendly and regulations mandating recycling have helped the German company, said Robert Mazuga, director of international business development for Wincor.

Wincor-Nixdorf would not give specific deployment numbers but said thousands of its machines are scattered across the area.

Wincor-Nixdorf’s market share is steadily increasing in a region Mazuga considers underserved. Fueling the increase is continually better access to those areas, he said.

Building relationships

Wincor-Nixdorf’s attention, like that of many others, is on making contacts in the region. Such relationships with retailers and analysts will prove vital in learning the needs of a community, where best to place machines and how to ensure customers know how to get the most from the technology.

“We’re going to build step by step and country by country,” Mazuga said. “We’re trying to play a role there.”

IBM has turned to its recently created Self-Service Alliance to learn the lay of the land. Through the group, a worldwide collaboration of varied businesses at all levels of development, IBM is creating a dialogue that is expected to pinpoint what solutions will be most effective. Because of the variety of cultures from country to country, one solution that might work in one area will not necessarily be sufficient for another, Langer said.

“Each country is different. … The most important key is partners who are on the ground,” he said. “They speak the language in that market. But the game is rolling and moving forward.”

Because of the relative infancy of kiosks in Eastern Europe, manufacturers are spending as much time educating potential vendors and users as they are mapping out ways to expand their businesses.

Kiosk companies expect the next waves of technology to be simple, easy and reliable. Eventually, the trend will be toward more complex solutions. But, of course, how quickly the technology progresses will hinge on each respective country, the speed at which they can pick up the technology and the vision of businesses that look to separate themselves from competitors.

“It will take some time,” Langer said. “We are at the beginning.”