Article

Queue-busting way to success

Self-service technologies are transforming cost of sale and customer service across the world. So why are U.K. companies failing to respond to this global phenomenon?

September 25, 2006

Self-service technologies are transforming cost of sale and customer service across the world. So why are UK companies failing to respond to this global phenomenon, asks Philip Hunter, managing director,KioskCom Europe 2006?

The weak dollar, volatile global financial markets and a drop in consumer confidence have combined to create difficult trading conditions for UK organizations across almost every market sector.  With most looking to reduce costs, why do so many companies continue to pay sales assistants — from retail to hospitality — simply to watch customers enter their chip-and-PIN details?

Europe led the way in adopting self-service technology — from bank ATMs to car park and station ticket machines. A decade on, and Europe is now lagging behind the rest of the world in the adoption of self-service technology. Today companies across the United States and Asia Pacific are wholeheartedly embracing solutions that can transform the cost of sale, improve customer throughput and release staff to undertake added value up-selling activities.

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If the consumer — especially the queue-loving British consumer — is to be encouraged to self-serve, organizations need to take a long term training stance towards encouraging adoption. Organizations will need to invest in digital signage and dedicated queue-busters to direct and encourage the consumer towards the kiosk — an approach that has underpinned the widespread U.S. adoption levels.  It may go against the national grain but self-service is a global trend; failing to follow suit will fundamentally constrain competitive position.

Queue Nation

The UK may be a nation of queuers; but in an increasingly demanding consumer society, perhaps no longer a nation of happy queuers. It is hard to measure the cost of lost sales and disgruntled customers who fail to return but every consumer-based organization recognizes the problem associated with poor customer throughput. Given the switch to chip-and-PIN technology, the sales assistant's role has, in many cases, been reduced to little more than supervising the consumer transaction, and, in a retail situation, perhaps putting the purchase in a bag.

Can organizations really justify this wasted staff resource? In the majority of cases the sales assistant behind the counter can deliver little or no business value. The sales transaction is a simple process — the customer has already made the purchasing decision and, unless deterred by long queues, will make the purchase.

So why are UK and European businesses failing to adopt the self-service technologies such as kiosks and self-service terminals that are increasingly standard across the United States and Asia Pacific? Europe currently lags in third position after these two regions in the adoption of this technology, according to a report from Summit Research.

Given the clear need to boost revenue, improve customer service and support new channels to market is there any viable reason for a lack of investment in this self-service technology?

Rapid Expansion

In the United States the market for kiosk-style self-service technology is set to grow 39 percent in 2006 — compared to only 15 percent in Europe. And the reasons are evident: Self-service technology saves money, reduces staff costs and improves customer service.

Self-service airline check-in, for example, costs up to a tenth of the traditional face-to-face model — prompting an increasing number of margin challenged airlines to encourage customers to adopt this approach. Indeed, new U.S. technology supports international check-ins, with terminals scanning passports prior to issuing boarding cards and luggage labels.

Restaurants are also getting in on the act, providing customers with self-service ordering devices that also facilitate payment, leaving waiting staff focused only on delivering food and clearing tables. These "quick service restaurant" devices increase customer throughput and boost turnover.

Even the U.S. Post Office is using kiosks not only in traditional locations to speed up the purchase of basic services such as stamps, but also to provide these services in places where it cannot physically locate a traditional outlet.

Proven Model

To be fair, some U.K. organizations are dabbling with the technology. Cinemas, for example, increasingly offer self-service ticket systems for those who have already paid online or via the telephone, using the machine to validate identity. This approach increases customer throughput, reduces queues and enables a far lower cost of sale.

But too many companies continue to eschew a technology that is perhaps a victim of its early U.K. adoption. From the arrival of the first attendant-free car parking kiosk the U.K. public has not enjoyed a great self-service experience. Regularly out of order, the early machines also suffered poor coin and note recognition; they rarely offered change, leaving the consumer out of pocket and often swallowed the cash without providing the ticket. Perhaps it is little wonder that even the longest early morning queue at the railway station will not prompt even one customer to brave the self-service machine.

The good news is that the new generation of self-service technology is far more usable and reliable. Note and coin recognition solutions have been developed from the highly demanding gaming industry, while the interactive screens can be tailored to lead the consumer through almost any type of transaction.

Self-Service Evolution

The adoption may well be slow but, if tackled appropriately, will be sure. And, once in place, self-service offers organizations extraordinary opportunities to transform the process of direct consumer interaction.

For example, the small size of many self-service kiosks offers space-constrained organizations new opportunities for expansion. It also enables more flexible sales strategies — combining face-to-face with self-service terminals to provide a complete customer service.

Critically, in a highly competitive and difficult trading environment, the self-service model fundamentally changes the cost of sale. It may be a difficult process to wean the U.K. public away from its addiction to queues but in pandering to this tradition, organizations are compromising their competitive position. Queuing is no longer the acceptable face of U.K. business.