If a person can improve the experience or explain something — like most of retail — that is the competitive advantage. McDonald’s seems to have given up friendly and personable counter help a long time ago. When I’m there it seems counter people are shouting for orders or scrambling to try to keep up with demand. Does an iPad make that experience more or less personable? Doubtful.

The hubris of saying the franchisor will have to pay to keep the franchisees alive is a bit astounding for a franchisee that averages $500,000 to $1 million profits a year.

As long as you look at labor as a cost and not an advantage you’ll continue looking for ways to make your store as nondescript and cold as the others. When you look at employees as your only success — you’ll reward and maintain them to truly craft an exceptional experience for your customers. You’ll share the wealth instead of trying to hoard it and bemoan having to give a bit extra in wages.

The question is not about the cost of labor. It is about customer preference. Are we really worried about $1 hamburgers? Heck, I remember when they were 15 cents. I don’t think anyone lost much business as the price increased over the years.

And particularly in the hamburger business, people seem a lot more willing to spend more for a better experience.

If Bob’s suggestion that Franchise holders do “just fine” from a profitability stand point is valid, then there is probably room for a little “fairness reset” — living wages for associates and a little less in profit growth for the owners. Automation as described in some ways replaces labor that is hard to find, and hard to keep, as well as providing a convenience in time and accuracy for the customer. One has to wonder, though, if the mobile phone should be the target for providing this automation, not installing expensive kiosks in every store. Grocery has a different problem than most retailers/restaurants where the number of items ordered/checked out is much lower.

I think it depends on the business and their clientele. Certain times people want to get in and out, while other times people prefer to deal with a person. Finding the right balance is the key. I recently went into a CVS and a friendly and knowledgeable clerk was monitoring and helping customers with three different kiosks which worked well. It was a nice balance of human interaction while using a kiosk.

Kiosks lack flexibility and certain demographics may not be as comfortable using them so businesses that have both options available are probably going to fair better. Additionally, when customers are asked to use self-service kiosks they are being asked to shoulder more of the work so kiosks that run efficiently, are well maintained and are user friendly, should be what businesses aim for.

Bob’s right. Where there is an advantage to human interaction, associates will be paid more and will carry more responsibility. Where there isn’t (checking out of CVS with a bottle of shampoo) machines can do the job.

It will do us well as a country to focus better attention on education, with an eye toward ensuring we have a competent and able workforce.

This is a difficult subject — but we may be missing the real disruption in our discussion. We tend to talk in terms of the “value of the employee to the business” and “fairness in wages versus owner profits.” Those are arguments of aspiration and morality. Or maybe “human interest” would be a better term. The truly disruptive force behind changes in all industry — not just retail — is that technology is surpassing the productivity and lowering the cost of activity versus human beings. There is going to be some marginal utility trade-offs for sure. There is the employee who actually creates customer loyalty with their service. There is the process where having a human being visually inspect final production inventory is more apt to find defects than optical scanning. But there aren’t many. This is a fundamental paradigm shift in what “work” is. We are going to have to figure it out as a society. And arguments about higher pay for low value-added work are not going to help us. Not unless we… Read more »

Many are affirming Bob Phibbs’ comments as do I. What we don’t understand very well is where and when a brilliant human interaction is needed. The retail experience is made up of almost uncountable points of energy or connection — from how easy it is to park, to efficiency and thoughtfulness of the service, to the ambience of the place, to the quality of the products. That energetic experience can be positive and make you glad you are there and some are negative and make you look around for another place to go. When the positive energy consistently outweighs the negative you get customer loyalty. Unfortunately it often takes just one “dropped ball” to lose the game. There’s a restaurant near my home that is wonderful in all regards … except it is exceptionally noisy because of poor acoustical design. I went there only once. Some of those connection points are best- and well-handled by automation, and some by knowledgeable and aware human beings. So far we’re only guessing at which is which. And think… Read more »

There are two sides to this issue. The more you automate the lower the customer interaction. Yes consumers are checking out of retail stores and internet sites without human interaction. If you believe associates can or will not change the shopping experience then self-checkout works. Automation is another issue. Capital investment must be paid back with savings, pure and simple. The most common issue I see is over-automation. Tasks are automated as it was easy to do, but will require 99 years to payback the investment. Automation that does not pay back with labor savings in three to five years is a bad use of capital. After five years the world changes too much for forecasting.

There is no right balance! As time goes by, robots will become more humanoid automatons, and may exceed their supplanted humans in very nearly every respect. A date after work? Hmmm!

McDonald’s or any QSR is perhaps not the appropriate example for using the argument of a higher wage of $15 per hour by leveraging the growth of technology in their stead. Employees are the heartbeat of our business, our productivity advantage and our country. Any business who is successful recognizes this, since it is their employees who personalize the customer experience and enhance customer service. It is this premium customer service that brings customers in, not automation. Great businesses realize this and strive for happy, enthusiastic employees as the focus of their company — which brings back happy customers!

Automation has a good place to fill in operations such as a McDonald’s or other fast food operations. Certainly the customer will not notice a personality change in the manner orders are submitted. After a period of time the cost of automation is leveraged by the reduced cost of labor. My concern then becomes, where are those displaced people going to find acceptable work? This entire process may lead back to training, or a lack thereof, in the education system when preparing people to go out into the real world.

We always talk about what it is that Amazon can’t do, and people is the big one. The sooner retailers realize that good people are their only future, the sooner they’ll start competing with the convenience of online shopping. And, oh yeah, you have to pay to get good people.

The success or failure of automation for self-service depends on many factors like sector, geography and demographics. The reality is that self-checkout doesn’t work well in all locations. My local Shaw’s just removed them after having them in place for 10 years! Technology and automation is a double edged sword. While automation, like self-checkout, can help speed overall checkout times and reduce labor costs, it can also frustrate consumers when it isn’t intuitive or it is finicky. Self-checkout also is a detriment to customer engagement, as it offers no personal connection to the brand. Each retailer has to strike a balance between People, Process and Technology. The right mix is not static but bends to the preferences of your demographic segments and the processes that work best. I believe that a living wage, like that Costco pays their associates, creates associate loyalty that results in happy customer and will pay off in the long run. That doesn’t mean technology isn’t important. It just means the mix of people, process and technology has to be harmonized… Read more »

I think it depends on the transaction. In the case of McDonald’s, their strategy has always been to formalize process with as little deviation as possible, so automation is obviously the next step. I think going forward you will see a mix of fully automated order and checkout and a mix of employee driven mobile and stationery checkout. Nordstrom rack’s mobile checkout works well as a line buster for their traditional checkout, based on my experience.

Understanding the customer’s need for, desire of, and comfort with assistance at specific points in the shopping journey allows retailer to evaluate the need for assistance and then determine if that assistance is best handled by technology, a person, or a combination. I don’t think this is a pure cost issue. Determine the service profiles of the target shopper and evaluate options to best fulfill the needs.

Much depends on the type of environment, the expectation of the customer, the intuitive (or lack thereof) interface of the automated system and ability to get assistance when needed. Environments with little deviation or specialization lend themselves much more to automation versus those where interaction with associates is key. And if the interface isn’t intuitive and the shopper can’t get help, even in the right environment, this could be a recipe for frustration and lost sales.