The Self-Service "Buy-and-Pay" Market: Kiosk, Vending and Foodservice Trends in the U.S.

Table of Contents

• Scope & Methodology
  • Scope of Report
  • Report Methodology

• Overall Market
  • The Self-Service Economy
    • Figure 1-1: Share of Self-Service “Buy-and-Pay” Transaction Volume by Classification, 2007 vs. 2012 (percent)
  • Kiosk Penetration in Retail and Hospitality
  • A Positive Confluence of Factors
  • Top Players Crossing Over from ATMs
  • More ATMs, But Fewer Transactions
  • Blame it on Debit Cards
  • Deployers Focusing on New Functions

• Retail Self-Checkout and Restaurant Trends
  • Retail Self-Checkout Going Strong
  • Consumer Usage and Appeal
  • Several Grocery Chains Field Innovative Self-Pay Initiatives
  • Self-Payment Systems in Restaurants
  • Pay-at-Table Platforms

• Emerging Trends in Buy-and-Pay Kiosks
  • Part of Modern Life
  • DVDs
  • Photo Development
  • Gift Cards
  • Hospitality
  • Healthcare
  • Public Services

• Vending Trends
  • Vending Machines and Kiosks Increasingly Overlapping
  • Lackluster Growth in Vending Revenues
  • Figure 1-2: U.S. Vending Industry Revenues, 1997-2006 (in billions of dollars)
  • Market Outlook

• Consumer Trends
  • A General Desire for Self-Service Applications
  • Level of Self-Service Acceptance Among Consumers
  • Yet Some Consumers Avoid Kiosks
  • Debit Cards Outpace Credit Cards

• The Self-Service Economy
• Market to Reach $1.2 Trillion in 2012
  • Figure 2-1: Self-Service “Buy-and-Pay” Transaction Volume, 2007-2012 (in billions of dollars)
  • Figure 2-2: Share of Self-Service “Buy-and-Pay” Transaction Volume by Classification, 2007 vs. 2012 (percent)
• Kiosk Penetration in Retail and Hospitality
  • Figure 2-3: State of Kiosk Deployment, 2007 (percent)
• Point-of-Sale/Self-Checkout Is Most Popular Kiosk Type
  • Figure 2-4: Types of Kiosks, 2007 (percent)

• Global Context
  • Self-Payment More Widespread in Wealthier Regions
  • Self-Service Most Common in the United States
  • Green and Healthy Automation Trends in Europe
  • Japan Loves Vending

• Market Drivers and Drawbacks
  • A Positive Confluence of Factors
  • Figure 2-5: Factors Fueling Kiosk Growth for Businesses, 2007 (percent)
  • Growing Consumer Acceptance and Demand
  • Lower Technology Costs
    • Figure 2-6: Producer Price Indexes for POS Terminals, Funds-Transfer Devices and All Other Miscellaneous Computer Peripheral Equipment, 1998-2008
  • Consumer Shift to Plastic Payment
  • Self-Payment Offers Advantages to Businesses
  • Reduce Labor Costs
  • Upsell and Assist Sales
  • Avoid Missed Sales/Extends Hours
  • Add Efficiencies
  • Increase Store Traffic
  • Meet Customer Demand
  • Create Differentiation and Loyalty
  • Disadvantages of Self-Pay Applications for Businesses
  • Costs Too Much to Implement
  • Alienates Customers
  • Loses Sales

• Competitive Overview
  • Reasons for Kiosk Deployment
    • Figure 2-7: Top Three Reasons for Kiosk Deployment, 2007 (percent)
    • Figure 2-8: Top Three Reasons for Kiosk Applications, 2007 (percent)
    • Table 2-1: Reasons for Kiosk Deployment, 2007 (percent)
    • Table 2-2: Beneficial Kiosk Applications, 2007 (percent)
  • Self-Service Deployment as Brand Builder
    • Figure 2-9: Do Self-Service Technologies Create a More Positive Perception of the Deployer' s Brand? (percent)
  • Keys to Effective Self-Service Technology Deployment
  • Smart Locations
  • Simplicity
  • Available Assistance
  • Internal Integration
  • Top Players Crossing Over from ATMs
    • Table 2-3: Leading Manufacturers of Self-Service Buy-and-Pay Hardware by 2007 Revenues (in millions of dollars)

• Competitor Profiles
• Coinstar
• Company Founded on Coin-Counting Kiosks
• Company Launches Coin to Card Program
• A Co-owner of Redbox DVD Kiosks
• Looking Abroad
• NCR Corporation
• Overview
• Focus on Kiosks
• Acquisitions and Spin-Offs
• Covering All Bases
• Still a Powerhouse in ATMs
• Looking Abroad
• VeriFone Holdings, Inc.
• Overview
• New Products Focused on Self-Service Applications
• VeriFone Hits NYC Taxi Circuit
• Going Contactless

• Focus on ATMs & Automated Financial Services
• More ATMs, But Fewer Transactions
  • Figure 2-10: Number of ATM Machines in the U.S., 1996-2006
  • Figure 2-11: Monthly Number of ATM Transactions per ATM in the U.S., 1996-2006
  • Table 2-4: Number of Off-Branch ATMs in the U.S. and Percentage of Total ATMs, 1996-2006
  • Figure 2-12: Total Number of ATM Transactions in the U.S., 1996-2006 (in billions)
• Top ATM Owners
  • Figure 2-13: Top Five Bank Owners of ATMs by Number of ATMs in Operation in the U.S., 2007
• Blame it on Debit Cards
• Deployers Focusing on New Functions
• Costs of Advanced ATMs
• Advanced ATMs in C-Stores
• Advanced ATMs in Banks
• Looking Ahead: ATM Integration with Mobile Phones
• Company Spotlight: U.S. Bancorp
• Focus on Customization
• Aiming for the Unbanked
  • Figure 2-14: Percentage of Unbanked Consumers by Race/Ethnicity, 2007

• Trends in Third-Party Payment Processing
• Overview
  • Figure 2-15: North American Third-Party Payment Processing Revenues, 2002-2011 (in billions of dollars)
• Leading Players
  • Table 2-5: Leading Third-Party Payment Processors by Revenues, 2006 vs. 2007 (in millions of dollars)
• Acquisitions Continue in 2008
• Credit Card Transaction Fees
• Transaction Processing in the Self-Service Market
• Debit Card Transaction Fees
• Looking Ahead: Resistance to Transaction Fees

• Trends in Retail Self-Checkout
• Overview
• Self-Checkout Advantages and Disadvantages
• Consumer Usage and Appeal
  • Figure 3-1: Importance of Self-Checkout When Selecting Primary Grocery Store, 2007 (percent)
  • Figure 3-2: Consumer Insights into Self-Checkout: “I Like Self-Checkout...”, 2007 (percent)
• Perceived Advantages to Self-Checkout
• Perceived Disadvantages to Self-Checkout
• Zenith Survey Shows Lower Rate of Consumer Acceptance
  • Figure 3-3: Self-Checkout Users' Reactions, 2006 (percent)
• A Reduction in Service?
• Should Self-Service Shoppers Get Discounts?
• Looking Ahead: Green Self-Checkouts
• Several Grocery Chains Field Innovative Self-Pay Initiatives
• Bloom
• Giant Food Stores
• Stop & Shop
• Meijer
• Fresh & Easy Neighborhood Markets
• Self-Checkout Hold-Outs
• Looking Ahead: More Independent Grocers to Install Self-Checkouts
• Convenience Stores Slow to Adopt Self-Checkouts
• Two C-Store Chains Out Front
• Home Improvement Channel Reaching Chain-Wide Deployment

• Self-Payment Trends in Restaurants
  • Scope of Self-Payment Systems in Restaurants
  • Pay-at-Table Platforms
  • Advantages of Pay-At-Table Platforms
  • Security
  • Improved Service
  • Faster Turnover
  • Reduced Transaction Fees
  • Resistance to Pay-At-Table Platforms
  • Looking Ahead: Variations on the Self-Service Theme
  • Fast-Food Buy-and-Pay Kiosks
  • Check Increases Among Kiosk Users
  • Kiosk Manufacturers Also Report Good Returns
  • Self-Service Initiatives at Theme Restaurants and Casinos

• Overview
• Part of Modern Life
• DVDs
• Size and Growth of Category
• The How and Where of DVD Rental Kiosks
• The Leading Players
  • Figure 4-1: Top Three DVD Rental Kiosk Companies: By Number of Kiosks, Early 2008
• Looking Ahead: Blockbuster To Rev Up in Self-Service Kiosks
• Music and Media Downloads
• Other Media: Jukeboxes and Newspapers
• Photo Development
• Gift Cards
• Pay By Touch Focuses on Gift Card Customization
• Safeway' s Blackhawk Network Going Strong
• NetSpend Expanding Card Distribution via Kiosks
• Arroweye Solutions Also Focuses on Customization
• Hospitality
• Car Rental Agencies
• Healthcare
• Automated Pharmacies
• Public Services
• Postal Services
• Automobiles, Registration, Public Records and Fines
• Utilities
• Libraries and Schools
• Churches and Non-Profits
• Looking Ahead: Kiosks to Push Out into More Retail Businesses

• Market Overview
  • Kiosks vs. Vending Machines
  • A Brief History of Vending
  • Vending Machines and Kiosks Increasingly Overlapping
  • Lackluster Growth in Vending Revenues
    • Figure 5-1: U.S. Vending Industry Revenues, 1997-2006 (in billions of dollars) Sales by Product Category
    • Table 5-1: U.S. Vending Industry Sales by Product Category, 2003-2006 (in billions of dollars) Market Outlook
  • Cost of Doing Business Going Up
    • Figure 5-2: Producer Price Indexes for Vending Machine Manufacturing, 1998-2008
    • Figure 5-3: Producer Price Indexes for Vending Machine Operators, 2004-2008 (July-December)

• Competitive Overview
  • A Three-Tiered Structure
    • Figure 5-4: Share of U.S. Vending Machines by Location, 2006 (percent)
  • The Top Vending Operators
    • Figure 5-5: Top U.S. Vending Operators by Worldwide Company Sales, 2007 (in billions of dollars)
  • Leading Vending Machine Manufacturers
    • Figure 5-6: Estimated Vending Revenues of Leading Vending Machine Manufacturers, 2007 (in millions of dollars)
  • The Soda Bottler Contingent
  • An Outdated Operating Model
  • Lack of Investment or Innovation

• Market Trends
  • Changing Consumer Tastes and Increased Competition
    • Figure 5-7: Consumer Attitudes About Food and Nutrition, 2007 (percent)
    • Table 5-2: Consumer Attitudes About Food and Nutrition, 2004-2007 (percent)
  • A Question of Health
  • The School Scene
  • Schools Adding Healthier Vended Items, But...
  • The Work Scene
  • Credit Card Payments at Vending Machines
  • Advantages of Credit Card Acceptance
  • Barriers to Credit Card Deployment
  • Ethnic Food Vending Machines
  • Upscale and Hi-Tech Vending

• Focus on “Vending Stores”
  • A New Concept: Fully Automated, Self-Checkout “Mini-Marts”
  • Company Snapshot: Fast Track Convenience
  • Company Snapshot: Quickstore24
  • Company Snapshot: Carts Blanche
  • Company Snapshot: Shop24

• Looking Ahead
  • Contactless Payment at Vending Machines
  • Developments in Vending Technology
  • Self-Service Advertising: From Kiosks to Vending
  • Hot Can Vending

• Attitudes and Demographics
  • A General Desire for Self-Service Applications
  • Level of Self-Service Acceptance Among Consumers
    • Figure 6-1: Are You More Likely to Do Business with a Company That Offers the Flexibility of Using Self-Service Technology? (percent)
    • Figure 6-2: What Percentage of Transactions Did You Conduct Using Self-Service Devices This Past Week?
    • Figure 6-3: Services that Consumers in the U.S. and Canada Would Like Offered on Self-Service Kiosks, May 2007 (% of respondents)
  • Yet Some Consumers Avoid Kiosks
  • Convenience, Speed and Service Benefits Often Fail to Reach Consumers
  • Looking Ahead: More Self-Service Systems at Convenience Stores, Fast-Food Restaurants
    • Table 6-1: What Percentage of Transactions Did You Conduct Using Self-Service Devices This Past Week?

• Payment Preferences Among U.S. Consumers
  • Historical Evolution of Buy-and-Pay Formats
  • Debit Cards Outpace Credit Cards
    • Figure 6-4: Distribution of Number of Non-Cash Payments, 2003 vs. 2006 (percent)
    • Figure 6-5: Payment Options Used Most Often by Gift Purchasers: December 2003 vs. December 2007 (percent)
  • Cash, Debit Maintains Appeal in Minority Segments
  • Cash, Debit Usage Also Skews Younger
  • Value of Debit Card Transactions to Top $2 Trillion by 2010
    • Figure 6-6: Projected U.S. Debit Card Transaction Volume, 2005-2010 (in billions of dollars)
  • Ability to Accept Plastic a Self-Service Buy-and-Pay Must
  • Gift Cards Another Growth Area
    • Figure 6-7: Projected Growth in U.S. Gift Card Volume, 2007-2012 (in billions of dollars)
  • Looking Ahead: The Youth Skew and Other Demographic Opportunities
    • Table 6-2: Demographic Characteristics of Gift Purchasers by Payment Method: Cash, Check, Debit Card/Check Card, Credit Card, December 2007 (percent)
    • Table 6-3: Demographics for Frequent Users of ATM/Debit Cards: By Frequent Shopping and Use of Online Banking, 2007 (number and index of U.S. adults)
    • Table 6-4: Demographics for Frequent Users of ATM/Debit Cards: By Frequent Shopping at Convenience Stores or Supermarkets, 2007 (number and index of U.S. adults)
    • Table 6-5: Demographics for Frequent Users of ATM/Debit Cards: By Frequent Shopping at Home Furnishings/Housewares Stores or Home Improvement Stores, 2007 (number and index of U.S. adults)
    • Table 6-6: Demographics for Frequent Users of ATM/Debit Cards: By Frequent Shopping at Strip Malls or Shopping Malls, 2007 (number and index of U.S. adults)

• Trends in New Forms of Consumer Payment
  • Contactless/RFID
  • Looking Ahead: U.S. Consumers Not Embracing RFID
  • EMV
  • Cell Phones
  • Looking Ahead: Combined RFID and Cell Phones
  • Biometrics

Appendix: Self-Service Market Participants