June 25, 2008
Study: Self-Service Transactions to Triple by 2012
A new study from the IHL Group projects that transactions at self-service kiosks in North America will top $607 billion this year and grow to over $1.7 trillion by 2012. A similar study conducted by IHL and released last year estimated that transactions at kiosks would reach $525 million in 2007 and grow to $1.3 billion by 2011.
"The results of this study confirm what we’ve been seeing for the past several years – namely, that consumers are showing a preference for self-service kiosk activity of all kinds," said Lee Holman, lead retail analyst of the IHL Group, in a press release. "The benefit to retailers is that this technology can significantly increase customer loyalty, as well as customer satisfaction."
Another benefit of self-serve technologies including self-checkout systems and kiosks for ticketing, check-in, food ordering and postal systems, according to Mr. Holman, is lower expenses. Calling them a "hedge" in tough times, he added that kiosks "allow retailers to schedule their labor resources for high-volume periods without sacrificing service during non-peak times."
Discussion Questions: Where do you see the greatest opportunities for retailers to use self-serve technology and kiosks to significantly increase customer satisfaction and loyalty? Are retailers taking a strategic approach to self-serve kiosk deployment or are they approaching it from a tactical standpoint? Does it matter either way?
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When self-service kiosks successfully marry voice recognition technology, there’ll be another wave of complaints, then a substantial improvement phase. Given the mechanical script so many cashiers are forced to repeat, the machine’s voice might be equivalent. And kiosks save energy because they don’t have to commute. I still don’t understand why fast food restaurants haven’t broadly adopted touch screens and credit card swipe units for self-service ordering.
Self service works well for a growing number of consumers as long as at least one real person is available to assist with problems and glitches. If you observe the self-check outs in grocery stores, they work great for the most part, but the one person that monitors is kept very busy. If you observe the self service post office kiosk where sometimes there is NOT someone available to help out, customers get pretty upset when “the thing” doesn’t work right for them. A real person always needs to be available (at least a phone number to call) in order to make it work. Otherwise, it’s a very strong concept for the times we live in.
I’m not sure I have much to say here other than express incredulity at the topic. Is someone actually suggesting that a process through which a retailer can avoid helpful connection with a customer leads to higher customer satisfaction and loyalty? The extension is that customers like the machine more than they like the people who work in the store. And we’re congratulating ourselves on this advance and we want to see more of it? I have a dream…that someday there will be no service people in stores whatsoever!
Self-checkout is the way of the future. I applaud the retailers who are continuing to implement, test, and refine the process.
I use them most of the time I’m at my grocer and have noticed improvements in service over the years. The more we all use them and “suggest” improvements, the better they’ll become. My children got involved at an early age with understanding the scanner and lookup technologies, as well as the cost of each item going into the bags.
Fighting self-service kiosks seems to me a bit like fighting computers–you may complain about their faults but they are here to stay. Right now, they seem to work best in high volume situations (grocery stores, airlines). As the technology improves, customer familiarity increases, the problems requiring a monitor to help customers will decrease. Retailers should consider whether they are labor cost reducing (eliminate the individuals doing checkout) or they are labor cost shifting (reallocate those resources to helping customers and service).
Any service (or portable product) that can be discretely defined — or that can be customized in discretely definable increments — is a candidate for self-service kiosks. Customer satisfaction is increasingly defined as “getting exactly what I asked for the way I asked for it”. Machines are very good at that, so long as the consumer is very good at asking concrete questions. And we are learning — the machines are training us every day. Long live the machines!
My experiences with self service check-outs have been spotty at best. Invariably, the one person assigned to help 6 lanes of self check-out has a line of 5 people with issues.
In a world where we have to do much of everyhthing for ourselves, I am prone to think retailers need to either fix the glitches or provide enough support staff to help self service shoppers get through the process without delays that lead to frustration and a distinct lack of loyalty. Fixing the glitches is a good place to start.
I’m not big on the self serve cash terminal. This is the last opportunity that the retailer has to sell the customer something or satisfy them in some other way and self serve just doesn’t cut it when it comes to customer happiness. Surveys and stats can say different, what I’m seeing is no lines at self serve and longer lines at staffed tills. Self serve kiosks are great for loyalty program information, directions and maps for inside the store and other such tasks. These machines cannot sell and retailers are shooting themselves in the foot by deploying these systems as a primary cash out vehicle. I love the technology but we cannot replace the human interaction component that our subconscious desires.
Self-serve technology is a continuation of the prevailing customer service methodology that has captured America and is known as “Do-It-Yourself.” We Americans have become our own service providers and we are accepting that phenomenon. We fill our own gas tanks, do our own banking on ATMs, bag our own groceries in many stores, etc., and checking ourselves out of a retail store is now “cool.” As suggested in the write-up, it may lower stores’ expenses but I don’t see where it builds a lot of customer loyalty if everyone offers self-checkout for many “services.”
I use the self checkout lanes. I do it, not because I want to avoid the cashiers, but because they have the shortest lines and the other lanes have those ridiculous carousel check stands (which is another topic for discussion).
I am not sure it is a smart move for retailers to emphasize self-checkout. My produce has gone pre-packaged, many meat products are headed there, now there is no one to help me record and bag my order. The only affinity to this retailer is my frequent shopper card. Oh, did I mention that I carry cards from 3 different retailers?
The challenge with the self-checkout is that I believe many customers use it for the same reason as I. When asked about my self-checkout experience, I will say it was fine. Not because I particularly enjoy bagging my own groceries but because it beats needing to wait in line for a cashier. There are only three reasons I can think that an individual would prefer self checkout; special bagging requirements to segregate items, faster service, or they want to steal something.
So by reducing the number of cashiers, retailers force consumers to the self-checkout. But consumers still feel they are being catered to because they are able to avoid waiting in line. It is an interesting dynamic, but in the long range I think it is to the retailers benefit to staff enough cashiers to handle the sales and only expect self-checkout to cover the peaks.
While I am happy to use ATMs, self check-in at the airport, and to serve myself in some other situations, I truly believe the push toward “self-everything” is going to end up being at odds with the huge aging population demographic. The older one gets (and you don’t need to be ancient) the less clear the minuscule printed instructions are to read, and the harder it will be to hear the lady in the machine telling you what to do. There will be less dexterity to bag ones own groceries and to manage the touch screen format.
Do the proponents of self service ever consider other less positive ramifications to their bottom line, beyond their starry eyed optimism that they think they can hire fewer employees to interact with customers?
What struck me as most fascinating in the IHL report was the projection that some self-service transactions (such as airline) would actually drop.
But the self-service kiosk of five years from now is going to be so radically different than what is typically deployed today that the comparisons may be misleading. The ability for them to be networked and to more intelligently leverage multimedia and to integrate with CRM (smartcarts talking to kiosks? Smartcarts talking with self-checkout? Digital displays talking with all of the above? POS in a continuous conversation with all? Inventory and marketing tracking?) is going to make these units a much smoother part of store operations.
Self service kiosks and human salespeople both have advantages and disadvantages and should be integrated with one another.
Key to success is that each service provider focuses on their strengths and that customers are educated to exploit the skills and tools provided to them.
The key to any type of customer service is the focus on the customer, more specifically, meeting and exceeding the customers’ expectations. This requires a well thought out customer experience coupled with diligent maintenance.
For example, self service checkouts can be a speedy alternative to the long lines at the manned checkouts. But, as I recently experienced at Home Depot, the scanner did not work and I wasted my time repeating my scan over and over. However, the snail’s pace of the manned register also did not impress and as a result I have a bad impression of that retailer and have not returned.
With that said, I believe the shift to self serve will continue and will be a benefit to tomorrow’s customer. Gen X and Y have grown up in a global and downsized world and the internet. For these folks, an iPhone is more familiar than a full serve gas station and many “services” of yesteryear are no longer necessary.
Retailers need to analyze and prioritize all the services they offer and see if they fit their customers’ expectations. A company like “Cold Stone Creamery” obviously lives off their servers preparing an ice cream cone in front of their customers. But what about IKEA? Do their customers expect a salesperson in each department walking up to the customer and asking them what they’re looking for? I think not and I think there are plenty of menial services that can be done away with, either fully, through automated alternatives, or through the customer.
Instead of either/or, retailers should be asking how.
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When self-service kiosks successfully marry voice recognition technology, there’ll be another wave of complaints, then a substantial improvement phase. Given the mechanical script so many cashiers are forced to repeat, the machine’s voice might be equivalent. And kiosks save energy because they don’t have to commute. I still don’t understand why fast food restaurants haven’t broadly adopted touch screens and credit card swipe units for self-service ordering.
Self service works well for a growing number of consumers as long as at least one real person is available to assist with problems and glitches. If you observe the self-check outs in grocery stores, they work great for the most part, but the one person that monitors is kept very busy. If you observe the self service post office kiosk where sometimes there is NOT someone available to help out, customers get pretty upset when “the thing” doesn’t work right for them. A real person always needs to be available (at least a phone number to call) in order to make it work. Otherwise, it’s a very strong concept for the times we live in.
I’m not sure I have much to say here other than express incredulity at the topic. Is someone actually suggesting that a process through which a retailer can avoid helpful connection with a customer leads to higher customer satisfaction and loyalty? The extension is that customers like the machine more than they like the people who work in the store. And we’re congratulating ourselves on this advance and we want to see more of it? I have a dream…that someday there will be no service people in stores whatsoever!
Self-checkout is the way of the future. I applaud the retailers who are continuing to implement, test, and refine the process.
I use them most of the time I’m at my grocer and have noticed improvements in service over the years. The more we all use them and “suggest” improvements, the better they’ll become. My children got involved at an early age with understanding the scanner and lookup technologies, as well as the cost of each item going into the bags.
Fighting self-service kiosks seems to me a bit like fighting computers–you may complain about their faults but they are here to stay. Right now, they seem to work best in high volume situations (grocery stores, airlines). As the technology improves, customer familiarity increases, the problems requiring a monitor to help customers will decrease. Retailers should consider whether they are labor cost reducing (eliminate the individuals doing checkout) or they are labor cost shifting (reallocate those resources to helping customers and service).
Any service (or portable product) that can be discretely defined — or that can be customized in discretely definable increments — is a candidate for self-service kiosks. Customer satisfaction is increasingly defined as “getting exactly what I asked for the way I asked for it”. Machines are very good at that, so long as the consumer is very good at asking concrete questions. And we are learning — the machines are training us every day. Long live the machines!
My experiences with self service check-outs have been spotty at best. Invariably, the one person assigned to help 6 lanes of self check-out has a line of 5 people with issues.
In a world where we have to do much of everyhthing for ourselves, I am prone to think retailers need to either fix the glitches or provide enough support staff to help self service shoppers get through the process without delays that lead to frustration and a distinct lack of loyalty. Fixing the glitches is a good place to start.
I’m not big on the self serve cash terminal. This is the last opportunity that the retailer has to sell the customer something or satisfy them in some other way and self serve just doesn’t cut it when it comes to customer happiness. Surveys and stats can say different, what I’m seeing is no lines at self serve and longer lines at staffed tills. Self serve kiosks are great for loyalty program information, directions and maps for inside the store and other such tasks. These machines cannot sell and retailers are shooting themselves in the foot by deploying these systems as a primary cash out vehicle. I love the technology but we cannot replace the human interaction component that our subconscious desires.
Self-serve technology is a continuation of the prevailing customer service methodology that has captured America and is known as “Do-It-Yourself.” We Americans have become our own service providers and we are accepting that phenomenon. We fill our own gas tanks, do our own banking on ATMs, bag our own groceries in many stores, etc., and checking ourselves out of a retail store is now “cool.” As suggested in the write-up, it may lower stores’ expenses but I don’t see where it builds a lot of customer loyalty if everyone offers self-checkout for many “services.”
I use the self checkout lanes. I do it, not because I want to avoid the cashiers, but because they have the shortest lines and the other lanes have those ridiculous carousel check stands (which is another topic for discussion).
I am not sure it is a smart move for retailers to emphasize self-checkout. My produce has gone pre-packaged, many meat products are headed there, now there is no one to help me record and bag my order. The only affinity to this retailer is my frequent shopper card. Oh, did I mention that I carry cards from 3 different retailers?
The challenge with the self-checkout is that I believe many customers use it for the same reason as I. When asked about my self-checkout experience, I will say it was fine. Not because I particularly enjoy bagging my own groceries but because it beats needing to wait in line for a cashier. There are only three reasons I can think that an individual would prefer self checkout; special bagging requirements to segregate items, faster service, or they want to steal something.
So by reducing the number of cashiers, retailers force consumers to the self-checkout. But consumers still feel they are being catered to because they are able to avoid waiting in line. It is an interesting dynamic, but in the long range I think it is to the retailers benefit to staff enough cashiers to handle the sales and only expect self-checkout to cover the peaks.
While I am happy to use ATMs, self check-in at the airport, and to serve myself in some other situations, I truly believe the push toward “self-everything” is going to end up being at odds with the huge aging population demographic. The older one gets (and you don’t need to be ancient) the less clear the minuscule printed instructions are to read, and the harder it will be to hear the lady in the machine telling you what to do. There will be less dexterity to bag ones own groceries and to manage the touch screen format.
Do the proponents of self service ever consider other less positive ramifications to their bottom line, beyond their starry eyed optimism that they think they can hire fewer employees to interact with customers?
What struck me as most fascinating in the IHL report was the projection that some self-service transactions (such as airline) would actually drop.
But the self-service kiosk of five years from now is going to be so radically different than what is typically deployed today that the comparisons may be misleading. The ability for them to be networked and to more intelligently leverage multimedia and to integrate with CRM (smartcarts talking to kiosks? Smartcarts talking with self-checkout? Digital displays talking with all of the above? POS in a continuous conversation with all? Inventory and marketing tracking?) is going to make these units a much smoother part of store operations.
Self service kiosks and human salespeople both have advantages and disadvantages and should be integrated with one another.
Key to success is that each service provider focuses on their strengths and that customers are educated to exploit the skills and tools provided to them.
The key to any type of customer service is the focus on the customer, more specifically, meeting and exceeding the customers’ expectations. This requires a well thought out customer experience coupled with diligent maintenance.
For example, self service checkouts can be a speedy alternative to the long lines at the manned checkouts. But, as I recently experienced at Home Depot, the scanner did not work and I wasted my time repeating my scan over and over. However, the snail’s pace of the manned register also did not impress and as a result I have a bad impression of that retailer and have not returned.
With that said, I believe the shift to self serve will continue and will be a benefit to tomorrow’s customer. Gen X and Y have grown up in a global and downsized world and the internet. For these folks, an iPhone is more familiar than a full serve gas station and many “services” of yesteryear are no longer necessary.
Retailers need to analyze and prioritize all the services they offer and see if they fit their customers’ expectations. A company like “Cold Stone Creamery” obviously lives off their servers preparing an ice cream cone in front of their customers. But what about IKEA? Do their customers expect a salesperson in each department walking up to the customer and asking them what they’re looking for? I think not and I think there are plenty of menial services that can be done away with, either fully, through automated alternatives, or through the customer.
Instead of either/or, retailers should be asking how.