DIY Becoming Shopper Mantra in Stores

Discussion
Jul 20, 2007

By George Anderson

Put more kiosks and self-checkouts in stores and consumers are bound to use them. That’s the logical conclusion drawn from a report by IHL Consulting Group, which projects consumers in North America will spend $525 billion this year at self-checkout lanes, kiosks and other self-service technology devices. That figure represents a significant jump from the $438 billion consumers spent going the self-serve route in 2006.

Greg Buzek, president of IHL Consulting, said in a company press release that the use of technology to enable consumers to serve themselves is just getting started.

“We expect that expenditures made at self-service kiosks will rise by about 20 percent this year and another 18 percent in 2008,” said Mr. Buzek. He projects that sales at self-checkouts and various types of kiosks could push $1.3 trillion by 2011.

“Consumers enjoy self-service and increasingly seek out retailers that offer the technology,” he said. “Retailers and other businesses are finding that self-service kiosks can significantly increase customer loyalty, as well as customer satisfaction.”

Discussion Questions: What do you see as the primary factors behind retailer use of self-service technologies? Do you think we will we see formats in the future that are primarily self-serve with employees on hand for the purpose of dealing with tasks such as stocking shelves, store maintenance, security, and dealing with equipment malfunctions?

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21 Comments on "DIY Becoming Shopper Mantra in Stores"


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Shaun Bossons
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Shaun Bossons
14 years 10 months ago

I think it’s fairly obvious that the more self-checkout lines there are, the more they will be used. As long as the lines at the self-checkout remain smaller than the human operated tills, people will continue to dash through them. I have even been to stores where there is only self-checkout available late at night to support the 24 hour shopping strategy, ensuing reduced labor for the store. It’s also fun watching people use them for the first time–with a look of complete distrust on their faces!

Laura Davis-Taylor
Guest
Laura Davis-Taylor
14 years 10 months ago

I’m with Raymond 100%. Although our firm is focused on in-store media technology, I feel strongly that this is a blanket statement with many fuzzy areas.

Like any other technology, self-service kiosks and DIY plays are only as good as what they provide and how the shopper experiences them. There are TONS of horrible installations out there that completely overlook good usability and providing a simple, rewarding experience in context with shopper needs. There are also many kiosks and DIY examples that are on the other end of the spectrum, truly helping the shopper and putting a smile on their faces! The two most important rules? (1) Make them optional and (2) remember the old adage “it’s not the gun, it’s the bullet!”

Nikki Baird
Guest
Nikki Baird
14 years 10 months ago
Self-service has really gone through a major evolution. What started out as the company web site stuck on a computer in a shadowy corner in the store is becoming something that is helpful and engaging to both consumers and employees. The generation of kiosks being deployed today has shifted from generic to specific–specific applications for use in specific areas of the store (think wine selector, printer ink locater, perfume selector), and is being designed for a specific role in the sales process, not as a blanket replacement for sales people. This kind of evolution bodes well for the future of kiosks–we’re actually learning from our mistakes, and consumers have been pretty patient with us. And the next generation has the potential to really raise the bar on customer interaction–by pulling in or leveraging consumer devices (cell phone), interacting with products or smart shelves, and increasing their value to the retailer through integration to digital signage/advertising, and insights about shopper habits gathered through interactivity. I think self-service has only really scratched the surface of its potential… Read more »
Raymond D. Jones
Guest
Raymond D. Jones
14 years 10 months ago
I think it is a bit more complicated than just “build it and they will come.” Depending on the customer and the task, shoppers may either value personal interaction with a customer service employee or abhor it. We have all experienced seemingly interminable waits at checkout lines to buy just one item. On the other hand, who has not been frustrated by the use of automated voice systems by the airlines and cell phone companies. We have done quite a bit of shopper research relative to self-checkouts. This has been a key part of our Front-End Focus research, sponsored by Mars, Wrigley, and Time-Warner. There is clearly a place for self-checkout and kiosks, when they are available for the convenience of the shopper, and they are not forced to use it. We definitely see a generational split where older shoppers enjoy the personal interaction with a checker but young people want to avoid it. The banking model may provide direction. Banks offer drive-through, ATM, and online service as well as tellers and personal banking. You… Read more »
Doron Levy
Guest
Doron Levy
14 years 10 months ago
I recently performed an independent focus group on self-serve checkout lanes and my conclusions were quite surprising. In the 20-30 age group of females, 67% of the group said they had used self serve lanes and would NEVER use them again. Males in that age group were at 54%. As the groups got older, the percentages got higher. The majority of comments I received were that ‘self-serve lanes do not provide the customer service that the consumer was looking for’. In some manual observations of major chains that employed these types of checkout lanes, I noticed that when customers could not find help on the floor, the first place they would go is to the front of the store to ask a ‘cashier’ for help. Well now there is a big machine there instead of a person. Retailers need to rethink this whole self-serve checkout process as traditionally, the ‘cashier’ was the last person that the customer sees and they could be missing out on upsell opportunities as well as that closing interaction that can… Read more »
Mark Lilien
Guest
14 years 10 months ago

Shoppers will use self-service checkout as long as it suits their convenience. Waiting on a checkout line is the #1 complaint of shoppers everywhere. Unfortunately, self-service checkout isn’t a magic solution: customer lines still abound and most opportunities for upsell are lost.

Ryan Mathews
Guest
14 years 10 months ago

The answer to the first question is to control labor costs. The answer to the second is that we’re not quite to the robot store era yet.

Jeffery M. Joyner
Guest
Jeffery M. Joyner
14 years 10 months ago
It is true that more and more consumers are getting comfortable with the various self-service technologies being offered by retailers. Just look around. The number of occurrences that the average consumer has against self-service is growing rapidly. This is particularly true in major markets. I suppose this is inevitable. It is not difficult to draw a correlation between the vast numbers of retailers who now offer “self-checkouts” with the way the petroleum industry has changed. Although it seems like a lifetime ago, it really wasn’t that long ago when one could drive up to a gas pump or “filling station” and expect someone to come out and dispense gasoline into one’s vehicle. In fact that person was often asked to clean the windshield and check the tires for proper inflation. Look around–those days are gone. The good old gas pump attendant has been replaced with technology. There is little reason to think that this will not occur in retails stores as well. In fact the consumer’s acceptance of this will help retailers alleviate some concerns… Read more »
Phillip T. Straniero
Guest
Phillip T. Straniero
14 years 10 months ago

I think this type of technology actually appeals to consumers because they are given a sense of being in control of the checkout process and there also appears to be an element of time savings/customized service associated with self-checkout, kiosks, etc.

I also think this appeals to a more technically-savvy time-starved population and obviously provides a labor savings opportunity for the retailer.

I believe this trend will continue as it hopefully offsets the labor required to service consumer demand in the various service departments around the perimeter of the store.

Bernie Slome
Guest
Bernie Slome
14 years 10 months ago

I would use it on occasion for speed. Most of the time, I prefer customer service and interaction; however, if I am in a supermarket, I want speed. I want to get out fast. As it is, I bag my own groceries. If I only had a couple of items, I would use the self-checkout.

Warren Thayer
Guest
14 years 10 months ago

Just curious…. Has anybody yet studied whether or not self-checkout increases shrink? I don’t have a clue about the answer to that, but it’s occurred to me. As to the questions, Ryan’s right.

Kunal Puri
Guest
Kunal Puri
14 years 10 months ago

Wouldn’t it be interesting if the retailer offered to share the cost savings of self-checkout (no need for a checkout cashier) with the customer–say a coupon that worth 10% of the bill amount applicable for the next purchase only at the self-checkout counter….

I believe this would increase the buzz and the usage around self-checkouts and probably take them past the tipping point.

Camille P. Schuster, Ph.D.
Guest
14 years 10 months ago

L.L.Bean has had a telephone connected to the catalog call center for years. For consumers who wanted something that wasn’t available in the store but was available through the catalog, it was a way to purchase what they wanted without having to have all inventory in each store. Certainly that is one effective reason for an in-store kiosk.

In addition, if checkout lines are long an in-store kiosk is a way of ordering the product if you are not concerned with having it the same day.

In-store kiosks also allow consumers the opportunity to browse a larger inventory than just the products in the stores.

Will all consumers use the kiosks? No. Will the consumers who use a kiosk use it on every visit? No. Will some consumers find the kiosks a way to purchase more merchandise occasionally? Yes.

Bill Robinson
Guest
Bill Robinson
14 years 10 months ago

Most shoppers, in most stores, are comfortable with technology whether it’s the web, kiosk, PDA, or self-check POS. For these shoppers it is easier and more desirable to do it themselves. Sometimes, the retailer makes it fun and informative. Technology then contributes to the experience of shopping.

My theory is that self-service shopping will soon be pervasive. Retailers who are not engaged will soon be catering to the doddering few.

Mel Kleiman
Guest
14 years 10 months ago

Retailers do it for 2 reasons:
1. People who use technology are proven to buy more.
2. It reduces labor cost.

Consumers use it for three reasons:
1. Retailers don’t have enough employees to serve them so they use technology to get out of the store faster. (They have less checkers available to help me so I have to use self-checkout in self-defense.)
2. Technology is smarter then most employees and can help me make a better buy decision.
3. It gives people a feeling of being in control.

Mark Burr
Guest
14 years 10 months ago
Several quick and random thoughts based on my experience: Self-checkout will grow, and it should. Customers expect it to be there even if they don’t use it on that particular trip or at all. They still expect it to be there. Whether it is or is not faster (and it’s not) customers think it is, thus they choose it for that reason only, in many cases. It is a real case where perception is reality. The stopwatch loses out to the interactive. Because the customers are engaged, the time elapsed seems shorter. Should it be the only option? No. Will it be? Maybe in some places, but in more traditional formats I think neither now nor ever. In regards to the study shown by a commentator, every piece of data studied effectively both by vendors and by independent researchers is to the contrary. Especially in those age groups. In my own environment, I have seen all evidence to the contrary. In particular, older customers and price conscious shoppers especially like it due to the fact… Read more »
Kai Clarke
Guest
14 years 10 months ago

This is a concept that is finally hitting its stride. Things like kiosks and self-service checkout stands are great ways to increase customer satisfaction, decrease the amount of time spent in line and drive velocity through stores. There are no downsides to using modern technology combined with consumer demand to provide a faster, lower-touch environment.

Li McClelland
Guest
Li McClelland
14 years 10 months ago
In reading the actual press release the definition of self service is a little muddier. Much of what they talk about with respect to “kiosks”–food ordering, postal services and ticketing–appear to be what we used to call “vending machines.” It is true that it is quick and easy to buy a book of stamps from a machine, a round trip CTA train ticket to downtown Chicago by inserting money into a machine, or a Coke and a candy bar from a machine. But that just does not really seem to be all that new or revolutionary. Shipping a FedEx package by doing it yourself from a terminal, ATM banking, or pumping your own gas at self service pumps are more recent offerings that clearly relate to labor cost reductions for the providers and speed and security for the customer. The self service checkout lanes at the grocery store, department store or home supply store, however, are much harder sells for most customers. Try to find anyone who has used them who has not encountered at… Read more »
MARK DECKARD
Guest
MARK DECKARD
14 years 10 months ago

I’m in agreement with Raymond and Laura.

Optional is key, and keeping someone staffed overseeing several kiosks to help if there’s a problem. And often there is.

For me, it’s about speed. Checkout is #1, but if it’s backed up and I have just a few items, I’m a DIY’er.

Stephan Kouzomis
Guest
Stephan Kouzomis
14 years 10 months ago
Here is a perfect example of a study telling us: a)who is the consumer that this research coveres; and b)which products/retailers are being researched. Nothing is self evident in our business and complex consumer worlds anymore! Food outlets; Big Lot stores; Blockbuster; maybe, Home Depot; Target; these might be retailers that add or increase kiosks and similar self-service equipment. Very interestingly, there is too much a range of consumer needs, desires and wants to say, in general, consumers will spend more with “robotic” self-service tools/kiosks. Issues like involvement level of purchase; time element; sales associate service needs; and shoppers who are tired of no personal/face-to-face interaction, etc., aren’t the ones who are prone to this research study’s subject. So yes, there is opportunity for self-service kiosks. But, the business/retailer better know who their consumers/shoppers are, and what they demand. Maybe, this study is targeting the international markets? Achieving labor reduction savings is no reason to deface, if you will, the ‘face to face’ encounter that has lost its way. There is a point of diminishing… Read more »
Gregory Belkin
Guest
Gregory Belkin
14 years 10 months ago

I have always been a big fan of self-service kiosks and checkouts…anything to make the checkout process faster and easier.

My 2 cents, however, says that these things still need a lot of work. They never seem to work, and I keep hearing “Please rescan your item. Credit, two dollars, forty five cents.” Hah! That gets annoying, and sometimes I get frustrated and go find a human.

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