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A German asset-management company is using kiosks to sell small pieces of gold in tin gift packets to pique consumers' interest in buying larger amounts of the precious metal through its Web site.
TG-Gold-Super-Markt.de, which is based in Reutlingen, first tested using kiosks to sell gold in tins May 19 at the Frankfurt (Main) Hauptbahnhof, Germany's busiest train station based on passenger traffic, according to company CEO Thomas Geissler, who calls the machines Gold-To-Go ATMs. Consumers may buy the gift packs for 31 euros ($43.78).
TG-Gold-Super-Markt.de buys gold from Umicore Group, a Belgian-based materials-technology group that refines precious metals.
An ounce of gold sells for $947.80, and a gram of gold, which is priced in U.S. dollars, sells for $30.50, says George Milling-Stanley, a managing director of the World Gold Council, a London-based organization established by the gold-mining industry to market the consumption of gold through retail outlets, such as jewelry stores.
Though TG-Gold-Super-Markt calls the kiosks "ATMs," they do not dispense cash, Geissler tells ATM&Debit News in an e-mail message. Consumers can pay for the gold using credit cards, debit cards and cash, but purchasing the gold pieces with cash is limited because of money-laundering laws in various countries, he says. The company says it is negotiating with an unnamed transaction processor.
Although selling gold through a kiosk is unusual, it is not the first time a kiosk has been enlisted to sell expensive products, notes Francie Mendelsohn, CEO of Summit Research Associates Inc., a Rockville, Md.-based kiosk consulting firm. ZoomSystems, a San Francisco-based kiosk merchandiser, for example, sells Rosetta Stone, language–learning software that costs $400–expensive headphones and other pricey electronic equipment from Sony through its kiosks, a ZoomSystems spokesperson says. ZoomSystems deploys the kiosks in airports, including the Dallas/ Fort Worth Airport.
TG-Gold-Super-Markt kiosks sell gold at a discount compared with other retail outlets in the region that sell gold, Geissler claims. "This is a 20% discount compared to gold sold elsewhere in Germany," he says, noting a small piece of gold–one to 10 grams–essentially equates to a souvenir. "But it will be definitely a better hit than a bunch of flowers."
TG-Gold-Super-Markt views the kiosk offering as a means to accustom consumers to viewing gold as a strategic investment. "We recommend [consumers] buy a 250-gram piece of gold, which can be ordered through our Web site," says Geissler, suggesting that everyone should have 15% of his or her liquid assets in gold.
Besides dispensing one gram of gold, the kiosks also sell five-gram and 10-gram gold packs and gold coins. The kiosks hold 1,500 pieces of gold. The vendor has scheduled a second kiosk test to begin June 16 at the Frankfurt am Main Airport, Germany's busiest airport in terms of passenger traffic. "This is very smart way to promote the sale of gold. The way to sell gold is to get it in front of people in a train station or an airport, where they spend a lot of time waiting," says Milling-Stanley, who adds he has never heard of gold being sold through kiosks.
Neither has Mendelsohn. "That's a new one on me," she says. "It is certainly an application I have never come across. I am traveling though the Frankfurt Airport in September. Maybe I'll see it."
TG-Gold-Super-Markt prefers to deploy its kiosks in railway stations and airports for the reasons Milling-Stanley outlined.
Besides heavy foot traffic, airports offer tight security, the company says. However, TG-Gold-Super-Markt eventually may deploy the kiosks in banks, jewelry stores, hotels and shopping malls, Geissler says.
Why the focus on Frankfurt? "Frankfurt is Germany's financial capital and a down-to-earth place with high public frequency," says Geissler.
TG-Gold-Super-Markt's is in the right place at the right time to sell small amounts of gold through kiosks to pique consumer interest in larger amounts. The World Gold Council reported in May that first-quarter sales of gold were $29.7 billion, up 36% compared with the same three-month period last year. The council attributed the increase to fears of inflation and ongoing financial uncertainty.
"This is not a stupid idea, but it something they really have to think through because the price of gold is going up," Mendelsohn says. TG-Gold-Super-Markt's kiosk deployments for the time being will be limited to Germany, Austria and Switzerland. "We are planning to deploy 500 gold-dispensing 'ATMs' in the three countries," Geissler says. "If we achieve the product acceptance we aim at, we will deploy Gold-To-Go ATMs all over the world."The machines cost about $27,000, he says.
The kiosks are designed to protect the gold with an internal alarm system. The machines also are connected to a local security company. Geissler would not disclose the name of the company that made the kiosks for the tests, saying the company would accept offers from interested manufacturers for future rollouts. ATM쇓
