Automated kiosks act as virtual OTC advisers

by Amanda Baltazar

A spate of new automated kiosks that allow customers to input their symptoms or the product they're looking for and receive customized recommendations and information is helping to drive big business in OTC aisles--as much as high-single-digit growth, in some cases, compared with stores without the OTC kiosks.

The advantages to consumers are obvious: education at the touch of a button and no lengthy lines for pharmacists. The retailer benefits, too, as a satisfied customer means a return customer, as well as one who's liable to buy more.

Vestcom's integrated shopper marketing kiosks have been in use for more than 20 years and in supermarkets. Ten years ago, the company forayed into the drug store channel, where the kiosks are used mostly to communicate information.

"One of the things that's different for pharmacies is the amount of information to be communcated and how it fit that all in at the shelf," said Tim McKenzie, Vestcom president and chief operating officer. "Retailers are looking at ways to enhance the customer experience, so if they can become a trusted source of information, they can enhance their brand."

Vestcom's machines also help move customers from one aisle to another, thus encouraging further sales by providing additional recommendations. "We might promote sunscreen in the soft drinks screen, for example, especially if soft drinks are on sale that week," McKenzie explained.

CPG companies typically fund the installation of the kiosks because they pay to have their products featured.

Evincii's PharmAssist kiosks were introduced to the OTC departments of Longs Drug Stores in mid-2006 although the company hopes to soon roll them out to the supplement and packaged food departments.

PharmAssist works mostly from a diagnosis platform. A customer inputs his or her symptoms and the machine acts as a physician and offers a diagnosis. It then brings up a screen with recommendations of OTC products, showing both the front and back of the bottles so the consumer can fully review them.

Once a product is selected, the machine then directs the patient to where it is located in the store and will also cross-sell other products, such as cough drops with a cough medicine.

"OTC drugs are becoming increasingly complex, and consumers are becoming more concerned about taking the right thing," said Roger Bertman, Evincii vice president of marketing. "Around 20 percent of shoppers are using Evincii's system."

Between 50 percent and 60 percent of customers who use the kiosks receive a recommendation, said Evincii chief executive officer Charlie Koo, and sales in OTC typically jump by 3 to 6 percent when the machines are installed.

Like Vestcom's kiosks, branded CPG companies pay for the installation of the machines. Brands that pay are featured first in teh searches (nonpayers also appear, but come later in the list of recommendations), and payers also have the option of showing their commercials on the screen.

In return for hosting the PharmAssist machine, the retailer is given space to advertise its private-label products and typically sees a sales lift of 6 percent to 8 percent, Koo said.

The kiosks from Aisle7 (formally HealthNotes) are installed in some Longs Drugs stores, smaller chains and independent drug stores. They are used mostly as promotional vehicles.

During Heart Health Month, for example, the kiosks were used to educate consumers on how to change their diet and behaviors, and on which products in the store can help them do so. The machines also can promote such in-store services as an immunization program, diabetes classes or health fairs.

Within the program, there's space for advertising relevant products, but the brand companies would deal directly with the retailer, not the automation company. "So how much money [retailers] can generate from the programs is up to them." said Jeff Seacrist, spokesman for Aisle7.

Aisle7 has proved successful so far. In a test of 150 stores, drug stores that installed Aisle7 saw a $20,000 increase in OTC and supplement sales over the prior year vs. those without the kiosk. Total system cost: $5,000, plus $2,000 for the software.

Aisle 7's kiosks are usually placed near the pharmacy to help reduce the stress on the pharmacy staff. Seacrist said that, on average, pharmacy staff reported that the kiosk saved them each five hours per week in time spent addressing routine questions.

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