Mall kiosk
Encyclopedia
A retail
kiosk
(or mall kiosk) is a store operated out of a merchant supplied kiosk of varying size and shape, which is typically enclosed with the operator located in the center and customer approaching the vendor from across a counter. These units are best exemplified by jewelry style cases forming a 10' x 10' or larger perimeter footprint. These units are located in shopping mall
s, airport
s, sporting events, or larger stores. The industry term for smaller units is RMU (Retail Merchandising Unit) cart or mall cart. These smaller desk size units were created to avoid lease conflicts with existing stores with "kiosk" language exclusions and local fire codes requiring greater distance between units by placing them on wheels. RMUs function with the operator approaching the customer from the area surrounding the unit and showing or even demonstrating the product firsthand.
Kiosks are most often permanent leases of two to ten years due to the expense of these units which often start at $20,000 and are capable of exceeding $100,000 in cost to manufacture to specific and customized needs. RMUs are usually supplied by the property owner and licensed rather than leased -- much looser language allowing the property owner to revoke operational rights overnight or relocate the unit within the center upon notice. Kiosks are also available under the same conditions and may even be supplied by the property owner when they have been abandoned by former tenants -- occasionally these units are built specific to a property and supplied by the property owner. Rents vary by market conditions and mall traffic. Generally they begin at $1000/month and can exceed $10,000 a month in the best of malls. Holiday rents are generally term rents that encompass both November and December with a combined sales breakpoint for the holiday term on short term agreements or annual sales breakpoints on permanent agreements. These holiday rents are often three to four times non-holiday rents for each of these two months. Property owners benefit from this rent structure by capturing all rent prior to the peak sales period, yet soften the full impact of what is a very unbalanced sales window by splitting the considerable rent increases into a two month period.
While it is possible to rent spaces for a month or even a weekend, it is highly unadvisable as almost all businesses require an incubation period.
Due to the high visibility of these units, which are most often located in the common areas of malls, these businesses can often gain a relatively trackable monthly sales figure after a three or four month trial. Many other benefits exist, such as the low overhead, small inventories, and low or non-existent CAM, tax, utility, and marketing fees, as compared to their in-line storefront counterparts, which can often have fees equal to or in excess of the rents themselves.
The primary key to success in a kiosk or RMU is product margin. Most kiosk and cart products average three hundred percent mark up or better. This is quite different from the traditional "keystone" (doubling) of product costs, which is normally found in an in-line store with thousands of SKUs and higher transaction totals.
These retail options provide some of the best opportunity for start up small businesses and can lead to multi-million dollar nationwide operations garnering exclusive rights deals with entire REITs and regional developers. As a general rule, most successful kiosk businesses are centered around a single product or product category.
They are considered part of the specialty retail industry, which is worth over $12 billion annually. Retail spending has remained strong through the economic ups and downs (According to the U.S.Census Bureau totaled about $3.58 trillion in 2002).
The placement guarantees high foot traffic from shoppers, offering opportunities for impulse sales. Many carts are franchised
, which provides more support for new entrepreneur
s. Leases or rents are often monthly, but may range in length from a weekend to a year. The short leases allow larger retailers to test the market temporarily before committing to a location, and lower costs for new business owners.
The costs of running a cart vary by season (with rents ranging from $4000 and up per month during the holiday season, depending on the locations), and license agreements are short and usually renewed every month up to one year. The rent during the winter holiday season usually is the highest. Initial costs are lower because the smaller space requires less product to fill. Retailers also have the option of changing products with the season or to match trends.
The first mall kiosk opened in Boston
's Faneuil Hall
in 1976.
Retail
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
kiosk
Kiosk
Kiosk is a small, separated garden pavilion open on some or all sides. Kiosks were common in Persia, India, Pakistan, and in the Ottoman Empire from the 13th century onward...
(or mall kiosk) is a store operated out of a merchant supplied kiosk of varying size and shape, which is typically enclosed with the operator located in the center and customer approaching the vendor from across a counter. These units are best exemplified by jewelry style cases forming a 10' x 10' or larger perimeter footprint. These units are located in shopping mall
Shopping mall
A shopping mall, shopping centre, shopping arcade, shopping precinct or simply mall is one or more buildings forming a complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from unit to unit, along with a parking area — a modern, indoor version...
s, airport
Airport
An airport is a location where aircraft such as fixed-wing aircraft, helicopters, and blimps take off and land. Aircraft may be stored or maintained at an airport...
s, sporting events, or larger stores. The industry term for smaller units is RMU (Retail Merchandising Unit) cart or mall cart. These smaller desk size units were created to avoid lease conflicts with existing stores with "kiosk" language exclusions and local fire codes requiring greater distance between units by placing them on wheels. RMUs function with the operator approaching the customer from the area surrounding the unit and showing or even demonstrating the product firsthand.
Kiosks are most often permanent leases of two to ten years due to the expense of these units which often start at $20,000 and are capable of exceeding $100,000 in cost to manufacture to specific and customized needs. RMUs are usually supplied by the property owner and licensed rather than leased -- much looser language allowing the property owner to revoke operational rights overnight or relocate the unit within the center upon notice. Kiosks are also available under the same conditions and may even be supplied by the property owner when they have been abandoned by former tenants -- occasionally these units are built specific to a property and supplied by the property owner. Rents vary by market conditions and mall traffic. Generally they begin at $1000/month and can exceed $10,000 a month in the best of malls. Holiday rents are generally term rents that encompass both November and December with a combined sales breakpoint for the holiday term on short term agreements or annual sales breakpoints on permanent agreements. These holiday rents are often three to four times non-holiday rents for each of these two months. Property owners benefit from this rent structure by capturing all rent prior to the peak sales period, yet soften the full impact of what is a very unbalanced sales window by splitting the considerable rent increases into a two month period.
While it is possible to rent spaces for a month or even a weekend, it is highly unadvisable as almost all businesses require an incubation period.
Due to the high visibility of these units, which are most often located in the common areas of malls, these businesses can often gain a relatively trackable monthly sales figure after a three or four month trial. Many other benefits exist, such as the low overhead, small inventories, and low or non-existent CAM, tax, utility, and marketing fees, as compared to their in-line storefront counterparts, which can often have fees equal to or in excess of the rents themselves.
The primary key to success in a kiosk or RMU is product margin. Most kiosk and cart products average three hundred percent mark up or better. This is quite different from the traditional "keystone" (doubling) of product costs, which is normally found in an in-line store with thousands of SKUs and higher transaction totals.
These retail options provide some of the best opportunity for start up small businesses and can lead to multi-million dollar nationwide operations garnering exclusive rights deals with entire REITs and regional developers. As a general rule, most successful kiosk businesses are centered around a single product or product category.
They are considered part of the specialty retail industry, which is worth over $12 billion annually. Retail spending has remained strong through the economic ups and downs (According to the U.S.Census Bureau totaled about $3.58 trillion in 2002).
The placement guarantees high foot traffic from shoppers, offering opportunities for impulse sales. Many carts are franchised
Franchising
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a verb....
, which provides more support for new entrepreneur
Entrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...
s. Leases or rents are often monthly, but may range in length from a weekend to a year. The short leases allow larger retailers to test the market temporarily before committing to a location, and lower costs for new business owners.
The costs of running a cart vary by season (with rents ranging from $4000 and up per month during the holiday season, depending on the locations), and license agreements are short and usually renewed every month up to one year. The rent during the winter holiday season usually is the highest. Initial costs are lower because the smaller space requires less product to fill. Retailers also have the option of changing products with the season or to match trends.
The first mall kiosk opened in Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
's Faneuil Hall
Faneuil Hall
Faneuil Hall , located near the waterfront and today's Government Center, in Boston, Massachusetts, has been a marketplace and a meeting hall since 1742. It was the site of several speeches by Samuel Adams, James Otis, and others encouraging independence from Great Britain, and is now part of...
in 1976.