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Aug 1, 2007
Most successful kiosks don't bother with necessities or basics. More often than not, they put their investment into a selection of products that are unique, correspond with a popular trend, or have almost universal high impulse appeal.
Hot Headz of America, based in Philadelphia, PA, has three kiosk concepts, each of which fills one of these ideas. Interest in aromatherapy accounts for the success of their longest running kiosk approach, built around its two brands of body wraps and developed to bring relief to aching body parts: Nature's Way and the higher end Cozy line.
Brandon Singer, VP of sales, says the Nature's Way kiosks have been in operation for the past twelve years. They are in approximately 120 locations during the holiday season, though about ten percent operate all year. Some are limited to just the Nature's Way brand and others combine both, so the Cozy line represents opportunities for upselling customers, bringing additional profits.
Nature's Way includes ten different wraps for different parts of the body. The fabric clad units contain a proprietary blend of eleven different herbs and natural grains. They can be frozen for use as cold packs or heated in a microwave for soothing warmth.
The Cozy line of seven shapes, "uses a softer, fleece fabric and comes in higher end packaging, which is especially appealing for gift giving," Singer says. Since nearly everyone knows someone with muscle aches or stiffness, "many consumers go to a mall looking for these at holiday time and buy one for everyone on their gift list," says Singer. Of the 120 kiosk vendors who carry these products, many combine them with items such as candles, oils and other massage products.
Other products can raise the average sales ticket even more. Singer also says that many of his company's vendors combine something inexpensive, such as an aromatherapy candle, as a gift with purchase promotion.
Vendors pay only for product, and the typical initial order is $3,000 wholesale. Vendors can spend $1,500 on their first order, but that isn't recommended. Singer says it would diminish their selection and also subject them to a potential out of stock position, sacrificing sales.
"We have a prewritten standard order for new operators, which gives them a mix of different products in the line and is generally enough to carry them for a month plus," he explains. For the holidays, sales usually begin on November 1, and an initial order will ensure ample product through Black Friday.
There are no fees beyond the order, and vendors receive a package of promotional aids for free. They include signage, DVD and VHS loops showing the benefits and uses of the products, scripts of proven selling tactics, and flyers and brochures to hand out to mall passersby.
Singer says the typical mark up on Nature's Way and Cozy brand items is eight and a half times wholesale. An initial order should account for about $25,000 in sales.
Hot Headz' second kiosk concept centers on the company's own Hot Headz product. It's fleece hood for cold weather wear can be reconfigured in more than six ways, and is offered in a choice of eight colors. It typically retails for $19.99.
It is an As Seen on TV product and is also sold on the Home Shopping Network about fifty times a year, Singer says. To make a Hot Headz kiosk more profitable and appealing, the company has added about ten related products. One is Glo-Mitts, which are mittens that can be turned into fingerless gloves. Scarves, hats and neckbands are additional product options.
This concept is primarily for cold weather climates and does especially well near ski resorts. Currently there are approximately fifty Hot Headz kiosk vendors.
As with Nature's Way, Hot Headz vendors pay only for product, and the typical initial buy is also $3,000 wholesale. While these vendors can also sell other products in a Hot Headz kiosk, Singer says most do not. The company supplies these vendors with related products for free promotional materials, just as it does Nature's Way vendors.
The company's third concept is not marketed as a standalone kiosk or cart program. It is built around the company's iJacket; a line of printed iPod and cell phone cases. "This is not a turnkey concept," Singer says. "Success depends on its being added to a kiosk or cart that also sells iPod or cell phone accessories."
There are 100 different iJacket designs, including sports, animals, flowers, hearts and trendy apparel prints, and they retail in the $20 range. Singer suggests vendors order a selection of at least two units per design at a total cost of $400.
Vendors receive signage and a display unit. For the upcoming holiday season, the company will add iJackets with licensed collegiate logos. Singer says iJackets for cell phones are now in fifty locations, and another fifty locations carry iJackets for iPods.
Singer says some kiosk and cart vendors now subscribe to all three concepts from Hot Headz, though Nature's Way, "is one of the longest running holiday cart concepts. During the holiday season, an operator will run a Nature's Way kiosk in three locations in a single mall."
Forever Collectibles of Edison, NJ, fulfills the high impulse criteria with more than 5,000 different liscensed, sports related novelty items, laying claim to being one of the world's largest manufacturers of licensed sports novelty merchandise. These items play well everywhere, according to Terry Giordano, the company's sales manager and head of its cart and kiosk programs. Among its 5,000 different items are scarves, teddy bears, socks, hats, key chains, arm bands, "You name it," he says.
The licenses encompass all the major professional sports teams of each league. There are also licenses for more than 200 college and university teams, "and we go right on down to the players," Giordano adds. "For example, we have Derek Jeeter bobble heads and many others." Like Hot Headz, Forever Collectibles calls only for an investment in product at wholesale prices. There's no franchise fee or contract required. An initial order is between $3,500 and $5,500. At the lower end, it includes two units each of about 110 different stock keeping units.
Over a sixty day period, Giordano says, a kiosk can generate between $100,000 and $220,000. Carrying the right assortment of team paraphernalia for each geographic area is important, but it's not as limited as some may think, he adds.
"Items from the top ten NFL teams do well all across the country," he says. "The fan base is dispersed today. Everybody who lives in Florida isn't from Florida, and everyone in Florida has a gift list that includes people in other parts of the country."
New York Yankee goods go in all carts and kiosks, he says. Teams in LA, Boston, Chicago and other major sports towns also do well in all regions throughout the year.
While including these universal sellers in all its cart and kiosk programs, Forever Collectibles maintains an assortment plan for each area of the country, down to specific markets. "We develop a tailored mix according to where each vendor is located," he says. "At the Houston Galleria, for example, the program is weighted with Texas teams, but we throw in the top nationals."
"It's often the displaced family that grew up in New York and now lives in Texas that is a most enthusiastic fan and customer," he says. Also, surprisingly, according to Giordano, "the target customer is between 23 and 55 years old and is female. That's because it's the woman who is in the mall, and she's buying gifts for her boyfriend, husband, brother, son and dad." Giordano says the average retail price per unit is $20, and most cart customers buy two or three items at a time.
Because it manufactures its products and maintains approximately one million units in stock, the company can provide quick shipping to replenish the carts, and that is critical, according to Giordano. "The last two weeks of the holiday season typically account for 70 percent of total sales for the two month holiday period," he says, adding, "that's not the time to run out of merchandise."
There are now about 360 Forever Collectibles kiosks and carts in operation. When the company initiated these programs, the concept was built around the holiday season, though many now operate year round. "Those are generally in locations near bigger cities where there's a large population and a lot of sports enthusiasm," he says.
Giordano says the location of the kiosk in the mall doesn't matter, "because there's nothing else like us out there. The big sporting goods retailers concentrate only on a limited number of items based on local teams. We're selling dozens of items of all the teams."
Although it's not necessary for a Forever Collectibles kiosk vendor to sell only the company's products, "more than 80 percent do," Giordano says. "In general, they like getting all of their products from a single source. It's more convenient and more reliable. There are some, though, that might add some coffee mugs or another sports related item to the mix."
While both of these suppliers express confidence in the appeal of their product lines, both also agree that the successful kiosk vendor, regardless of product, should be enthusiastic and knowledgeable about the products being sold.
The following people at these companies were interviewed for this article:
Brandon Singer, vice president of sales
Hot Headz of America LLC
1890 Woodhaven Road
Philadelphia, PA 19116
Toll Free: 866-437-2755
Terry Giordano, sales manager and head of kiosk programs
115 Fieldcrest Avenue
Edison, NJ 08837
Topic: Kiosk Korner
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