Mall kiosk

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A virtually unknown entity just twenty years ago, the retail kiosk (or mall kiosk) is now a predictable aspect of the retail real estate landscape.

The kiosk found broad-based acceptance and success in the ‘90’s in the REIT and retail communities. The advent of the kiosk proved to be a boon for the REIT’s (i.e. link SIMON Property Group, General Growth Properties, etc.) revenue model, turning largely under-utilized floor-space in the mall’s common area into an innovative revenue stream. For retailers, the kiosk presented an unprecedented venue to attract the impulse-buyer by virtue of the number of cash-carrying shoppers that pass through mall and airport corridors on a daily basis.

Mall kiosks differ from mall carts, or “retail merchandising units” (RMUs) in that the retailer typically owns their kiosk, while the REIT maintains ownership of and collects rent for the RMU.

The face of retail has changed immensely over the past fifteen years, but the kiosk concept has remained largely unchanged. And while the concept is unchanged, the design, functionality and application of the kiosk continuously evolves. For kiosk industry pioneer, Kiosko Inc., the retail kiosk application has evolved from the typically four-sided, square cell phone kiosk of the ‘90’s to a limitless array of colors, shapes and designs selling items from ice cream to jewelry to massages to real estate.

The size of the kiosk and cart market is $12 billion in sales per year, and almost every major US mall, airport, theme park, lifestyle center and transportation hub has some sort of cart/kiosk program. [1]

Within the industry, kiosk and cart retailing programs are generally called “specialty leasing programs,” and the retailers are called “specialty retailers.”

The average rents for carts during the non-holiday season range from $1500-$4000 per month depending on the location (kiosks are more expensive and are generally used by bigger-brand companies like cell phone sellers, etc.).

The holiday selling season is two months (November-December) and rents are typically much higher during this period, ranging from $7500-$30,000 based on the venue and the cart/kiosk location within the center. That sounds expensive to some, but keep in mind:

  • carts and kiosks put the specialty retailer right in the middle of foot traffic; some centers attract more than 1 million shoppers per year!
  • holiday carts and kiosks allow retailers the chance to “get in and get out,” operating only during the peak buying season.
  • stocking a cart or kiosk costs much less than the investment needed to open and stock a typical “in-line” mall store, which can run $100,000+.

Many shopping venues charge a base rent plus a percentage of sales if the retailer makes sales over a certain amount (“overage rent”). For example, a mall might charge $3,500 in base rent, plus 10 percent of sales over $5,000 per week. So for the sake of this scenario, if the retailer grosses $7,500 in sales for the week, they would pay the mall 10 percent of $2,500, or $250 in overage rent (in addition to the base rent). Overage rent is calculated on a weekly basis.[2]

Many successful entrepreneurs started their retail businesses from a kiosk or cart to test the market and, if the concept matures, grow into permanent stores. Specialty Retail Report has profiled dozens of entrepreneurs in its 12-year history who started on a single cart or kiosk and built up to multimillion dollar companies with hundreds of permanent stores across the US (and in some cases, worldwide).

In addition, some business owners use kiosks and carts as a way to market their business, including realtors, restaurants, home-improvement companies, and loads of other local service businesses that recognize the power of their company getting center-stage visibility right in the middle of foot traffic in some of the busiest retail venues in the country.

[edit] References

 This article needs additional citations for verification.
Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (July 2007)
  1. ^ Specialty Retail Report Published by Pinnacle Publishing Group. Fall 2007 Issue.
  2. ^ Specialty Retail Report Published by Pinnacle Publishing Group. Fall 2007 Issue.

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