2016.04 | department store self service

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Just a few years ago, things were bleak for Department Stores to the point where their very existence was threatened. Seven years on and there is a revival in department stores; in Canada in particular. Hudson Bay stores are much improved, and Holt RenfrewSimons and Nordstrom are all expanding in store or adding new locations in Canada. Department Stores have found new relevance through various strategies: obtaining the rights to desirable trendy brands, providing international expansion for international brands via in-store boutiques, enhancing eCommerce footprint to augment and enhance the store experience or by serving the high-end market.

All of these strategies are underpinned by customer experience; department and specialty retailers are all about a unique customer experience or they would be mass merchants. It may be that need to differentiate themselves from mass merchants is what has kept these retailers from considering self service.

Self service has been embraced by grocery and mass merchants for almost 20 years.  More and more specialty retailers are leveraging endless aisle solutions in store and off site but there have been few initiatives for in store purchases at self service. Perhaps it is time to reconsider why it hasn’t been used, and consider whether things have changed.

Definition of Service – Many years of experience with self service has seen a shift in what is considered service.  There is a perception among a percentage of the population that a “machine” does not represent good customer service. Others note that no matter how opulent your surroundings in a store, once you have the item that you want to purchase, waiting in a queue is tiresome. Providing a self service option can reduce that line in the same POS footprint by providing four points of service that can be used simultaneously where one could be used before. In the traditional POS configuration in a Department Store with 4 people in line, 3 people wait. With a self service configuration, 0 of 4 people wait.  Nobody waits, and queues are dispersed more quickly than in the traditional model. Giving time back to shoppers is definitely a service.

Pervasiveness of Technology – The new graduates joining the workforce today have never known a world without the Internet – or self service. They are accustomed to technology and constant change. These people are the growing legions of shoppers in all stores. They want to shop in their stores; not their grandparents. The option of scanning items is a natural option, and not a retailer asking them to do work on their behalf.

Labour –  While tier one department stores that sell $500 keychains are swarming with sales staff, there are still a vast number of stores across a retailer’s estate that are not staffed in that manner. Suburban malls across North American cities appear to have a far lower staffing level. Shoppers who stop at a suburban store on Monday night to buy a pair of socks will hunt for someone to take their money. Walking far afield looking for POS “island” to find it is either closed, or has a line of 4 people. Self service is an excellent tool to combat spikes and troughs in customer traffic. Department Store staff are rarely dedicated cashiers, but have a host of other responsibilities. Why not provide staff with a tool to support multiple customer at one time?

Tendering – Cash is still pervasive across North America, but its use is continues to drop.  The implementation of EMV has reduced fraud in Canada and the UK. Shoppers are all accustomed to the drill of paying with a card at a payment terminal. Chip and Pin, NFC, Apple Wallet, and Android Wallet make it increasingly easier and quicker to transact with debit and credit cards on small footprint machines. The potential success of a cash only self-checkout has never been more likely.

Design – Self-checkouts have traditionally been a rather large footprint affair with an industrial look and feel. Department Stores aspire to be bastions of fashion and design, and any technology in the store must reflect that. The ability to leverage debit/credit only devices enables a much smaller footprint, as well as a device that is much more aesthetically pleasing, and a better fit in the Department and Specialty environment.

Security Tags – Many items in Department and Specialty require hard tag removal. Store staff are really the specialists on these tags, and that’s where most of that knowledge should reside. Newer implementations of self service checkout encourage attendants to be active with shoppers, and not behind an attendant’s podium. Given the right strategies, soft and hard tags can be dealt with in a self service environment, though training of staff will be elemental to success, and a targeted mix of merchandise to be accepted at self service is well advised. Not every item is easily sold via self service.

While many of the changes to the technology of self service point to it as a great opportunity for Department and Specialty, implementing self service requires different strategies than other retail segments like hospitality, food, mass merchandise and petro convenience. Every Department and Specialty retailer is different, but if the strengths of self service are considered in implementation, there is opportunity for success.

 Here are a few ideas to ponder:

  • Look for queues to remove
  • Look for broad fluctuations in traffic that are difficult to accommodate with staffing
  • Look for transactions with small items. These are easier for self service – bulky items are difficult
  • Look for transactions with 7 items and less; these are ideal for self service
  • Consider a small footprint option: a set of 4 Self Checkouts can be placed where 1 POS is today
  • Soft tags are easier for self service, but hard tags can be dealt with given the right attendant strategy
  • Debit and credit transactions mean no cash handling, no cash on hand for these devices, and fewer security issues
  • Consider bagging and have the right supplies to accommodate shopper purchases
  • Consider wasted areas near escalators. Those are central to traffic and could potentially support self service
  • Consider replacing POS “islands” with self service around the counter
  • Consider starting in suburban stores with less staff instead of urban stores with lots of staff
  • Consider self service as a branding opportunity on the screens and in the design of the self service pod
  • Consider using self service devices to allow customers to check in to pick up their items ordered online.
  • Consider carefully the staffing model to ensure the units have the support they need
  • Ensure that the units are serviced with helpful staff who ensure self service is an option
  • Service is about choice. What choice to shoppers have in store today?

Department stores have an opportunity to rethink their customer interactions in a way that many other specialty retailers cannot. They have the floor space, they have the opportunity for traffic, and they are trying to differentiate themselves on customer experience. With the expansion of customer interaction options, it only makes sense to consider every channel to maximize business. While self service is definitely not the right answer for all Department and Specialty shoppers and transactions, it provides a great option, and service is all about choice.

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