Kiosks Ofter Retailers, Malls Perks

By Christie Swanson

Posted: November 29, 2009 at 2:53 a.m.

Justin Wedgworth
Isabella Arkins, 10, of Rogers, tries on a hair extension Nov. 22 at the Pink Pom Pom kiosk in the food pavilion at Pinnacle Hills Promenade. Isabella needed longer hair to wear during an upcoming performance of the Nutcracker.

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The smell of freshly roasted nuts fills the corridors of the Northwest Arkansas Mall, signifying two things: The holiday shopping season has started and Ozark Mountain Nut Roasters has set up its kiosk.

Kiosks are not limited to the holiday season, but several seasonal businesses fill the corridors of area malls in November and December to capitalize on high-traffic areas to make sales.

James Miskimen, a salesman for Ozark Mountain Nut Roasters, works the kiosk’s weekend shift and said business gets busier as Thanksgiving and Christmas approach. Weekends also provide better sales.

That’s true for most retailers.

Some kiosk vendors only open during weekends.

Products available at kiosks vary from mall to mall, but include such items as jewelry, toys, keepsakes, cell phones and accessories and food.

Jesse Tron, a spokesperson for the International Council of Shopping Centers, said kiosks are a great way for vendors to get into a short-term lease and test products.

“It’s also an easy way to gain seasonal exposure for different products,” Tron said.

He said kiosks are not new to the marketplace, but it is a trend on the rise. “Especially in this economy, it’s a cost-effective way to start a business. You don’thave to be locked into a long contract,” Tron said.

Retailers aren’t the only people benefiting from kiosks.

“It gives malls a little extra revenue from rent,” said Ellen Davis, vice president, industry public relations for the National Retail Federation. “I think malls will take revenue any way they can get it in this economy.”

Randall Gregory, general manager at the Frisco Station Mall in Rogers, said kiosks help drive foot traffic.

Houndstooth Clothing Co., based in Fayetteville, has a history with the small business locations. The company opened its first store in downtown Fayetteville in 1992 and opened its first kiosk in the Northwest Arkansas Mall during the Christmas season the next year.

The company maintained a kiosk year-round at the mall until earlier this year, when Houndstooth moved into a permanent storefront across from the food court.

Houndstooth owner Michael Baker said they started with a cart the mall provided and in 1999 designed their own unit.

“There was a difference. It maximized how we were able to lay out our merchandise,” Baker said.

The company also has kiosksin several malls across the state, and used to have one in Fort Smith’s Central Mall that now is a full store.

“It’s been good. It was a good experience in Fort Smith. It was the right-sized space opening up in a great location,” Baker said of both the Fayetteville and Fort Smith mall locations.

Cara Leto, Houndstooth Northwest Arkansas Mall store manager, said she worked at the kiosk before moving to the store.

She said she has mixed feelings about the move. At the kiosk, she said they would get the random shoppers.

“Some people will stop by the store and say they thought we had left the mall,” Leto said.

But there also are advantages, she said, which include having a dressing room.

“I feel people sometimes feel better shopping and spending their money at a store rather than a kiosk,” Leto said.

Baker agreed some customers are more comfortable shopping at a store, but said there also are advantages in being in the hurried atmosphere of the hallway. Store name recognition plays a big part in comfort levels for customers shopping at kiosks, helping Houndstooth and other major chains.

Anna Cho and Lance Flyntstopped Monday at the Things Remembered at the Northwest Arkansas Mall to purchase a gift for a friend.

They said name recognition played a big part in their decision to shop at the kiosk.

Things Remembered, a major retailer selling personalized keepsakes, uses kiosks where it doesn’t have a store. It had a store at the mall at one time.

Cho and Flynt said they previously purchased items at the store and were comfortable shopping at the kiosk, but added they would probably feel more comfortable shopping at a store.

Kiosk Advantages

Baker’s advice to anyone thinking about opening a kiosk is to make sure the product and pricing work.

“You have to figure out if you can turn the inventory enough times to make a profit,” he said.

At one time, that almost became a problem for them at the Northwest Arkansas Mall kiosk.

“We were turning inventory so fast we had to question if we could keep the kiosk stocked.

Those are big considerations. You have to have enough product to satisfy the demand to satisfy the customer.”

Leasing prices are also a benefit to starting with a kiosk, Frisco Station Mall manager Gregory said.

“It’s a drastic dift erence in price. They are really driven for someone who is seasonal or someone who is starting a new product line and wanting to gauge public interest,” he said.

Pinnacle Hills Promenade general manager David Faulkner agreed.

“It’s a lot less expense to rent a kiosk. You have a fi nite amount of space where you can have stores,” he said. “If you don’t have a need for 500 square feet, kiosks are a good way to go.”

Baker said his experience with Houndstooth kiosks is that rent prices are “all over the board. Some malls arevery comparable and some there is a huge gap.”

He said oftentimes, mall managers negotiate an entrylevel rent and then base it on sales.

“For us, we were paying a lot in rent. We were narrowing that gap with what wewould pay in a storefront,” he said.

Lease lengths also vary.

Faulkner said they typically do kiosk leases from one to 12 months, but during nonholiday times he said they will consider going down to a weekend lease.

Pinnacle Hills has a unique situation when it comes to kiosks because they are an outdoor, open-air center.

“The original design was for all of (the kiosks) to be exterior, but after the first holiday we were open we made space available for indoor kiosks,” Faulkner said.

That space is provided in the food pavilion, and Faulkner said they usually have between six and eight kiosks set up during the holidays.

“We are limited on the amount of space available,” he said.

Some outdoor kiosks at Pinnacle Hills are used by permanent stores as a supplement.

“That is true especially if there is a new store opening. They may even just use it for advertisement,” Faulkner said.

Gregory said there are four kiosks leased at Frisco Station Mall, and they are all Christmas-related.

“Typically what we see and what we like are fourth-quarter or seasonal-type vendors,” he said. “They are usually inspired by wanting to drive sales in the fourth quarter and are crafters. They are the same people you see at craft fairs.”

Jeft Bishop, senior property manager of the Northwest Arkansas Mall, declined an interview for this story, but that mall has more than 20 kiosks. The mall has several kiosk vendors that maintain a year-round presence, but also has seasonal booths.

According to a National Retail Federation report, there are four potential drivers for customers: Service, price, location and product. These standards apply to both permanent stores and kiosks.

“The key question here is how accessible your channels are to the customer,” the report states.

Tron said kiosks are also a way to give customers more choices.

“(Malls) can bring in something they may not otherwise bring in,” he said. “If it is something that goes really well, they can extend their presence and move into a permanent location.”

Business, Pages 20 on 11/29/2009

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