Article

The big screen gets help from the touch screen

Don Peppers and Martha Rogers, Founding Partners, Peppers & Rogers Group

The box-office battle between the Harry Potter and Lord of the Rings sequels may interest Hollywood heavyweights, but it's not just what's on the screen that will attract moviegoers. Theaters are preparing for the busy holiday season by installing self-service kiosks to provide more pleasant customer experiences.

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Regal Cinemas, based in Knoxville, Tenn., operates 5,711 screens in 530 locations in 36 states. The company installed an extensive network of automated kiosks throughout its theaters a few years ago. In the theater business model, virtually no one arrives until 7 p.m., then the lobby is swamped with people waiting to buy tickets, shuffle through the usher's line and finally to buy snacks at the concession stand. The idea behind kiosks is to reduce some of this gridlock by eliminating pressure on the lines and giving the customer control over the interaction, while boosting share of customer with cross-sell opportunities.

Customer convenience tops the marquee

Instead of waiting for the box-office teller to help them, patrons can buy tickets at the kiosk or, using a credit card, pick up tickets that they've reserved online. "During high-volume periods, the kiosks are a way to eliminate some of the congestion," says Dick Westerling, senior VP of marketing for Regal.

The company uses point-of-sale (POS) technology by Radiant Systems, which competes with MICROS Systems, NCR and VeriFone. Customers interact with an automated ticketing machine that provides a touch screen for ticket sales, will-call retrieval and concession purchasing. It can also integrate with the theater's computer system to display feature schedules, real-time seating availability, ticket prices and credit-card authorization. The kiosks capture transaction data, which Regal can mine to learn who its most valuable customers are.

Regal's convenience strategy sounds unique, but kiosks are about to become a lot more commonplace. Customer self-service kiosks are expected to drive $3 billion in sales by 2006, according to Jupiter Research, and ticket orders lead the pack as the most common use of the devices. Kiosks put into practice the concept that convenience can lead to customer loyalty as theaters smooth out the customer experience in the lobby.

When buying tickets at the kiosk, moviegoers can order and pay for popcorn, candy and drinks. The concession stand then becomes a fulfillment center, where the patron presents a voucher and picks up snacks before proceeding into the theater. Regal Cinemas is not yet offering concession items at its kiosks, although that is being considered. But imagine what the next level of such a capability might be. With this type of technology, theaters might someday be able to stock their concessions in advance, based on the predictive modeling of movie patrons and their preferences.

The ROI: happy customers

"There is a small cost savings related to having the kiosks installed in the theaters, but right now it's primarily a customer-service initiative to relieve lobby congestion," says Westerling. He also explains that the company has incorporated kiosk technology to improve its loyalty program. "Our Regal Crown Club currently is implemented at about 30% of our locations, where patrons can buy tickets and automatically receive loyalty credits while redeeming points at the kiosk good for free concessions and ticket discounts," he says, instead of just at the box office. "By mid-2003, the technology should be implemented in 100% of our kiosk locations."

Besides efficiency, kiosks also offer a great opportunity for theaters to start a dialogue with their best customers, driving improvements in meeting customers' needs. Based on customer feedback, such a dialogue can help create a more profitable movie lineup and concession product line, and even generate opportunities for new products and services theaters could provide, such as valet parking, or hot coffee (made just the way they like it) as patrons leave the theater.


To read more articles like this one, visit Peppers and Rogers Group's Web site at www.1to1.com.

All materials copyright 2002 Peppers and Rogers Group - 1:1 Marketing.


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