Article

Self-checkout and the customer relationship

As more companies turn to kiosks to lower labor costs and increase checkout time, the question lingers: Does this hurt the relationship with the customer?

February 26, 2006 by James Bickers — Editor, Networld Alliance

More and more stores deploy self-checkout to leverage labor savings for higher ROI. But there remains a hidden cost in the profit equation: the effect on customer relationships.

Home Depot deployed self-checkout in 1,234 stores. According to company spokesman Paula Smith, customers consistently want faster checkout and Home Depot's system reduced wait time by 34 percent. She claimed self-service actually improves customer relationships.

"We've actually used self-checkout to draw us closer to our customers in the stores," Smith said. "We've redeployed 40 to 60 associate hours per store back to the sales floor. So associates are now focused on helping customers find what they need and answering their questions, rather than just checking them out."

Others are more critical of self-checkout and Home Depot. Retail Management Consultants CEO George Whalin said companies deploying self-checkout need to pay attention, taking extra care to understand their customers' demands during deployment. He advises deployers to weigh the advantages of cost cutting carefully against losing customer service. He cited Home Depot as a textbook case of a company letting its service lag and its competitors gain.

"As a retailer that once had the most helpful and knowledgeable associates in the business, they do a very poor job today," Whalin said. "Yes, I know they are more profitable than ever, but at what price? Their major competitor, Lowe's, continues to chop into their once-significant lead in number of stores."

It is the last ten feet in the store that we remember the most. -- Doug Fleener, Dynamic Experiences Group

It's hard for companies to grasp something as ethereal as the influence of human contact. Many experts, like Whalin, analyze the self-checkout trend through the lenses of their own first-hand experiences. Dynamic Experiences Group Founder Doug Fleener said self-checkout's effect on customer relations is neither positive nor negative, but simply another means of offering better service. He enjoys the feeling of control self-checkout offers. And he agrees in principle with Home Depot's philosophy of reassigning employees to customer service.

"I always find it funny that I think I can ring myself up quicker than the retail employee," Fleener said. "The sad fact though is that at many stores I shop at I use the self-service lanes so I don't have to interact and engage with the employees.  They add so little to my experience that I'd rather do it myself.  So I guess at these stores it would be a positive."

On the other side of the debate are those like international retail expert Debbie Allen, who decries the effects of self-service on personalized customer service. She prefers traditional service in the aisle and at the register.

"(Self-checkout is) negative because more and more retailers are losing the personal touch," Allen said. "People want to do business where people know their name and communicate with them. With a world full of email and more self-service we will begin to start seeking out the basics from retailers who create emotion. There is not emotion out of self-service and most people buy out of emotion."

While the exact effects of self-service on the customer relationship are relatively unquantifiable, studies corroborate customer acceptance of self-service. According to research by Apunix Computer Services and restaurant operator HMS Host, 71 percent of customers surveyed liked the restaurant's kiosk, 64 percent would use it in the future and 65 percent would use it to pay their bill.

And the experts do agree on one thing: If self-checkout is deployed, the employees must be properly trained to make it work. Fleener said employees who monitor self-checkout lanes need to be trained in customer relations, rather than be register cops or barely muttering, "Have a nice day."

"It is the last ten feet in the store that we remember the most," Fleener said. "Technology is enabling retailers to use fewer people in that last ten feet but it doesn't diminish the need to ensure that those last ten feet are hassle free and an enjoyable experience."

About James Bickers

---