Retailers are readying for the next wave of E-commerce, which is rolling in at the store level.

By 2010, online sales are expected to contribute $316 billion to total retail sales as more merchants tie together multiple buying channels and services, according to Forrester Research. In-store kiosks that connect customers to retail stores' Web sites--which just 19% of consumers have used and 26% of retailers offer--will continue to grow and boost sales by offering expanded assortments and products not available on store shelves, Forrester says.

Companies by and large are reluctant to reveal revenue garnered from in-store kiosks. But Borders Books & Music has seen at least a 10% increase from the integration of the Web with its brick-and-mortar stores because it gives customers options not readily available on the store shelves, says Francie Mendelsohn, president at Summit Research Associates. About 85% of retail kiosks, including those in use by Borders, are Web-based, she says.

Wal-Mart Stores Inc. is slowly rolling out to about 600 stores kiosks that shoppers can use to browse and make purchases on walmart.com. The site, launched in 1996 and enhanced in 2003 with improved security via a password-protected service from Verified by Visa (see story, "Safer Shopping: Verified By Visa Aims To Reduce Fraud"), offers consumers nearly 1 million items, from movie rentals and apparel to furniture and prescription drugs. The terminals augment in-store sales and will be similar to services already in place, such as kiosks that offer gift registries and photo printing, Wal-Mart says.

With its kiosk effort, Wal-Mart is following in the footsteps of one of the E-commerce masters, Dell. Two years ago, during the holiday season, Dell began putting kiosks in shopping malls to acquaint customers less comfortable with online shopping with its Web operations. Clerks are available at the kiosks to answer questions, demonstrate products, and take orders using dell.com. "These customers are typically first-time buyers and a little less knowledgeable about the products," says Frank Muehleman, VP and general manager of Dell's small- and medium-business division. "Those who are buying their second or third PC typically go to dell.com."

	REI ties in-store kiosks to its Web-site gift registry, Joan Broughton, REI's VP of multichannel programs says.

Sporting-goods store Recreational Equipment Inc. also offers in-store kiosks that include gift registries tied to the company's Web site, which have helped boost sales, says Joan Broughton, REI's VP of multichannel programs. At these, consumers are encouraged to set up gift registries or order online when merchandise isn't available in the store. The kiosks don't run on a full browser to prevent people from surfing the Web.

REI is integrating its REI Adventures travel service, which offers package trips, such as a nine-day cycling tour through Italy's Puglia region, with its online processes. Eventually, customers will be able to add these trips to a gift registry they've set up, and people buying gifts for them, whether online, at registers, or using the in-store kiosks, can buy a percentage of the trip by entering a code at the time of purchase.

But REI realizes that there are other ways to leverage its Web and brick-and-mortar operations. It took mul- tichannel sales to a new level earlier this year when Broughton set out to increase overall revenue and brand awareness. REI's more than 70 brick-and-mortar stores generate 85% of the company's revenue, and its online site generates about 12% of sales.

Broughton's mission is to integrate conventional in-store retail methods with REI's E-commerce site, launched in 1996, and with the kiosks that were put in stores this year. Earlier this year, REI launched a program that lets customers order products online and pick them up at stores. At the end of the first day of service, 60 of REI's 66 stores had been assigned pickup orders from customers buying online.

"One IT guy I work with set up a counter to keep track of the people using this service," Broughton says. "It was exciting to see consumers cross from one channel to another because it gave momentum to the things we're doing."