2016.04 | department store self service

hbc womens shoes

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.

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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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2015.02 | RFID self-checkout

IMG_8720For many years, retailers have heard about the benefits of RFID, and there has been little to no use of item level RFID to check out in a store.  On the weekend, I visited my local library with my family and had an opportunity to utilize the newly installed self-checkouts to check out our books.

Under the old system, all items had a unique barcode and an EAS security tag.  To check out an item, customers presented their books and library card to an attendant at a PC with a scanner.  The attendant scanned the library card to validate the customer’s identification, checked if there were any fines, holds etc, and then scanned all of the items to be checked out.  A receipt was printed and the
Photo 2015-02-09, 7 16 14 PM items were walked around a security gate at the combined entrance/exit, and handed to the library customer.  The security tags set off an alarm when they are near the gates, so the attendant passed them to the holder on the other side of the security gate.

Under the new system, there is no need for customers to interact with an attendant unless they have a fine, a hold, or some other intervention that goes beyond the simple checking out of an item.  The customer uses one of a few self-checkout terminals – which include PC and a scanner, but also a customer facing touchscreen, and an antenna in a pad on the counter.  The Photo 2015-02-09, 7 16 06 PMcustomer scans their library card, and if they have no fines or holds, they can then identify the items to check out.  To identify the items for borrowing, the customer places the items on the pad on the counter, with as many as three at a time piled on top of each other in a stack.  The antenna reads the tags in the books and shows them on the screen for verification.  The customer can validate that the items match, ensure any media inside the item matches the case, and complete the checkout with or without a receipt.

As the items are now considered checked out, the customer can walk past a gate with an RFID reader, and if the item they are carrying is checked out, no alarm will sound.  If an item has not been checked out and allocated to the customer’s card, an alarm will sound.

On the whole, the system worked very smoothly. While only recently installed, customers took to it and had little issue using it.  The library staff were helpful and encouraging for the few customers who did require assistance.

The RFID system was a good fit in the library for a number of reasons:

  • Even if RFID tags are more expensive than barcode labels and EAS tags, items are tagged once and then run through the system many times as they are loaned through their useful life, instead of being purchased once.
  • Most items in a library are flat and lend themselves to easy scanning on a pad like this.  There are rarely very heavy, bulky or oddly shaped items to be checked out.
  • Consumers are accustomed to self service from using it at ATMs, airports and retail self-checkouts so they recognize the paradigm of self service took to it well.
  • All customers are identified with an identity card.  No exceptions.
  • One attendant can now support many customers at a time instead of one, reducing wait times, and ideally enhancing the customer experience. If customers don’t wish to check out their own items, they can assist them easily.
  • Allowing customers to walk out the door with their own items without passing them around a security gate appears to provide better flow and a smoother checkout experience.  It also removes an underlying assumption of distrust implied by the gates and security system as previously configured.

The whole system reminded me of a question I had from a retailer at NRF who asked to see our RFID self-checkouts.  While I would personally like to see RFID checkouts in retail purely from a love of technology, it seems unlikely at present.  There are some differences between this library scenario and many retail environments from a checkout perspective:

  • It will be difficult to convince all the parties involved in manufacturing goods to move to item level RFID tags unless the retailer and consumer are willing to absorb the price.  The prices are getting lower and lower for the sort of passive tags needed for items purchased at retail.  Time will tell if it will be enough!  The big retailers will have to drive this adoption.
  • Implementing readers to read these tags instead of barcodes would require a replacement or at least an upgrade to current reader infrastructure.  An ROI is needed to change/add that infrastructure to include RFID readers.
  • While libraries have basic flat items, other retail environments have all sorts of uniquely sized and shaped items that may not lend themselves well to a standardized rfid reader environment.  For unusual items, a handheld RFID reader could be used, but if it was, what’s the difference between holding that RFID reader to a tag and scanning a barcode as is done today?  Not much.
  • Would there be a throughput advantage?  For smaller transactions, it is very unlikely.  Cashiers and even customers scanning themselves can scan a few items relatively quickly.  For smaller transactions, tendering is generally the longest part of the transaction and not the scanning.  For larger transactions, there may be some throughput advantage, but it would take time for retailers and consumers to develop the trust that the system would capture all of the items accurately.  Also, many customers like to validate their purchases and their prices as they are scanned.  Much of the throughput advantage of an instantaneous cart total could be lost by questions and validation afterward.
  • Weighable items would need to be either pre-packaged or separated for checkout.  Weighables couldn’t just be left in the cart for reading.
  • Unlike a library, the items that a consumer buys can’t be “checked out” as they are not unique in the store.  An antenna at the front of the store placed for security can’t identify items as valid to pass or not.  It’s unclear how security would work with RFID tags.  I’ve heard of more sophisticated and more costly RFID tags that can be de-activated on scan, but then what if a client changes their mind after the transaction or returns an item?  Does it need to be retagged?  How does one “print” a new tag for an item?  If RFID can’t be used for security, then EAS would be needed as well.
  • What about bulk items that are tagged with paper tags today?  What about low value and small items like greeting cards?

As with all solutions in a retail environment, there must be a benefit for both the consumer and the retailer for a solution to be implemented successfully.  It’s possible that the RFID self-checkout could get to that point if retailers can leverage the operational benefits on the back end first and push it to the front end.  Then it will take customers and retailers getting comfortable with wheeling a big basket of groceries up to a reader and taking that price as correct.

A lot of stars have to align for an RFID self-checkout to come our way, and if they do it will probably take some time.  Maybe next NRF.

2015.01 | mashgin

CaptureA new technology from mashgin promises to simplify the cafeteria line. Clients set their food on a scan table and the system identifies all of the food items with an imaging system, looks them up in a product base, calculates the total and charges the client automatically.

From the video demonstration, mashgin’s simplicity should make it a winner with customers. The concept works fast and simply, as it would need to do in this challenging retail environment. There are a number of factors which will influence this concept’s success as a full blown product.

Price – A POS for this type of environment is relatively inexpensive and can probably be had for $1000 – much less if a simple ECR is used. If this device can be had for that price range it could certainly be a winner. If significantly more expensive, it may be tough to win over cost conscious operators.

One could argue that a cashier could be removed from the equation to drive a huge ROI, but it will require a huge leap of faith for an operator to believe that all clients can be trusted to place all items on the scanner. The fear of shrink will probably mean a longer timeline to remove a cashier.

Another potential selling point is utilizing multiple devices with one cashier overseeing them as is done with self-checkout implementations. This is a more viable argument and potentially a better use of the cashier resources.

Payments – My experience with small transactions is that the longest element is tendering, and not scanning. While that seems counter-intuitive, tendering is never completed with a simple universal system in the real world. People pay with cash, credit, debit, and mobile devices now.

It will be important to incorporate payment into the system in a simple way that keeps flow moving.  The concept solution shown assumes a mobile solution or use of a credit card with an MSR slot.  Apple Pay or NFC cards could work well here. The the MSR card reader slot should be eliminated – that will need to be updated to as EMV is adopted in the US and many international markets.  My personal preference is to use an NFC card for food service payments so I can avoid entering a PIN.  Expect US fast food organizations to embrace NFC, beacons, or other options more fully once PINs become more common and a simple swipe of a credit card is replaced by people having to enter a PIN at POS; slowing the queues.

CaptureCustomer Choice – While the system appears entirely intuitive, there’s always a subset of clients that will struggle or reject self service. Some accommodation will need to be made to serve those that don’t wish to use self service. Some customers consider fast service to be good service, while others prefer the human touch. Ultimately the customer is right. Operators will not want to eliminate any potential revenue sources and will want to support any clients that want to eat.

Fraud / Incorrect Reads – The system will require monitoring to avoid shrink. What if two bars of chocolate are set one on top of the other so that the imager sees only 1 item and charges for one? What if the organic coffee is purchased instead of regular? A cup of coffee looks like a circle of black liquid to the imager – it’s impossible to tell without asking the customer or watching them.

Operations – Even though the system works quickly how the flow works in the restaurant environment will require some significant consideration. How many units should be used? Where should they be placed? How many attendants are needed and how are they best deployed? How are exceptions like a system reading a plate incorrectly or an item missing from the image database? How should the queue be arranged for best use of space and simple flow? What if customers have coupons or vouchers or some other discount?  How are the units updated?  Where does the database reside?  Is it simple for local staff to amend and update the product base?

While its certainty not fair to expect a fully developed system from a concept video, it’s important to think through the entire transaction. This concept has much in common with other self service concepts and the issues above are common to all.  All of the issues above are certainly addressable with some thought and an operator devoted to working through the solution with mashgin. I would happily use this sort of technology and look forward to seeing a fully developed iteration in a cafeteria line in the future!

2013.29 | self-checkout redux

I read this Time magazine article on self-checkout at the beginning of the summer and found it again in my pocket reading list, and it made me stop and think about self-checkout all over again.   I’ve been involved with self-checkout on and off for over a decade now.  There have been all kinds of arguments for and against self-checkout over those years, and frankly, all arguments are conjecture and opinion.

Retailers and consumers vote with their wallets.  That’s the measure that should get the most attention.   Self-checkout has grown tremendously in usage in North America and around the world through all the time I’ve been involved, and it will continue to grow into the future.

Capture

There were a few small arguments against self-checkout in the Time article, and those should be in the article to provide a balanced view.  I respect that need for balanced perspective, but the arguments are some I’ve heard many times before selling and implementing self-checkouts.

  • The article indicates that some retailers are removing self-checkout. The names in the article are few and a little dated, frankly, and many more retailers are adding self-checkout than are removing them in my experience.  The list of retailers offering self-checkout is getting longer, and not shorter.  If any retailer is removing self-checkout, it’s generally not a failure of the self-checkout technology, it’s more likely one of a couple of things.  Either the self-checkout has not been implemented in such a manner as to drive value to clients and the retailer, or self-checkout is just not a fit for a particular business model.   Both of these issues are very much addressable.    Every retailer and every environment is different and must be addressed as such.  In fact, while the Time article indicated that self-checkout was removed from IKEA in the US, if you walk into an IKEA stores in Canada as I do, you will generally see more self-checkout than assisted service lanes.   Unlike the early days, self-checkout now comes in many flavours and can be adjusted to suit most needs.
  • The article indicates that theft is a problem. Theft is a problem in every retail environment.  I’ve been involved in many self-checkout implementations at various retailers across Canada and in the US.  I have colleagues who implement self-checkout all over the world.  I’ve worked with people who previously worked with competitive self-checkout solutions.  We all find the same thing when we discuss this issue among ourselves.  There are a plethora of tools available from all self-checkout vendors and others to enable store staff to minimize theft.  These tools must be embraced by the store staff to ensure shrink is not an issue.  More importantly, self-checkouts require caring, well trained, customer focused staff to provide assistance to clients and provide the same sort of diligent oversight for theft and dishonesty that the regular front end of any store requires.  Why would self-checkout be any different than any other part of the store in that regard?  It isn’t.
  • The article indicates that 52% of consumers prefer to use self-checkout and that 48% “pretty much hate it”.  I didn’t see anything in the cited Cisco study summary that indicated that polled consumers “hated it”, only that 52% prefer to use self-service if given a choice.  In fact, 61% of those polled were even willing to visit a fully automated self service store.   I like those numbers.  If there was a vote in the western world, 52% would win the day for most anything.  In fact, anything we can get clients to agree to over half the time is incredible.  Why not consider how many retailers are building smartphone apps to drive business to their stores and even allow for mobile checkout.  Does anyone consider that crazy in today’s mobile obsessed society?  Only 56% of Canadians and Americans own smartphones.  Does that mean retailers are wasting their time on something only half the population can even use?  Definitely not.

If that reasoning isn’t enough, and really, these concerns are not particularly convincing for those with experience with self service, there are a few things you might not consider about self-checkout that I’ve come to understand:

  • Self-checkout takes people away from the assisted service lanes, making the line shorter for those that really prefer a checkout experience with a cashier.  If you hate self-checkout, you can’t hate the fact that the line for a cashier just got shorter.
  • Self-checkout doesn’t have to remove the personal touch.  In great implementations it can leverage it fully. Self-checkout attendants are not always the best cashiers or most ‘technical’ of the store staff.  Well trained attendants who are willing to engage with customers are generally better choices and provide a better experience for customers in the store.   They can read whether customers need help and either back away or step forward to assist as the situation requires it.  If a personal touch is a key element of the retailer’s ethos, they have every opportunity to be friendly to clients and interact with them appropriately.
  • When self-checkouts are used primarily for smaller transactions, it increases the productivity of the assisted service lanes as cashiers only scan larger orders.  Tendering is the slowest part of the transaction, so the dollars per hour in transactions handled by the assisted lane cashiers tend to increase.
  • An attendant can handle 4-6 lanes at the same time very easily.  That means that 4-6 people can start their transaction without waiting in line instead of only 1 person who doesn’t have to wait.  At a single lane, 60 second transactions would drive 90 second average wait time for 4 customers in line.  With 4 self-checkouts there is an average wait time of 0 seconds.  Does anyone really like waiting in line?
  • New smaller, space saving self-checkouts are finding a place in smaller footprint urban stores.  I’ve seen 3 checkouts easily replaced with 6 self-checkouts, and leaving the space feeling more open, as there is no space needed for a cashier to stand.  Cashier and client stand on the same side of the unit.
  • With new footprints and convertible self-checkouts, it is now possible to keep every lane in a store open for the entire time the store is open.  Why waste lanes and space that cannot be used without an attendant?  Every square foot counts.

Frankly, I don’t find a great deal of argument against self-checkout any more.  I was even surprised to come across this article stating that it was even a question.  Self-checkout is a mainstay.  It’s an assumed option by retailers and consumers alike.  In today’s omnichannel world, we can consider it the third channel after assisted service POS and eCommerce.   It was a channel in the omnichannel retail universe well before it was called that.

The Time article is correct in that self-checkout does appear to be the on-ramp for mobile self service.  Self-checkout taught all of us a different paradigm for shopping in a store. Mobile will do that again.   Just as self-checkout evolved into different modes, in store mobile apps will vary in function to suit the situation.  Contrary to the article, you may not even need to scan anything with mobile shopping.  Stay tuned.

2012.33 | Killing Queues Completely

If you haven’t reconsidered your queuing strategy in a while, and even if you have, you should check out this article or the audio podcast on priority queuing by Benjamen Walker.   Many organizations are offering options to pay to avoid waiting and Benjamen discusses the morality and utility of such models, examining amusement parks, toll roads, colleges, airports, retail and banking.

From my perspective, if an organization can find an opportunity to match a benefit like someone’s time to a cost they are willing to pay, that’s a great win.  Where I think caution should be taken is on whether allowing those express queues impacts the underlying customers.

As some of the contacts Benjamen interviews point out, organizations may be  making lines longer or negatively impacting their business in some way by causing a detriment to valuable clients that could result in a long term corporate problem.    The ultimate win is if a consumer can get what they want with NO queue at all and the regular business is positively impacted.

A few examples:

  • Ordering online and shipping to home – customer doesn’t wait in line for what they want, inventory at store may not be impacted, and the line in a store is reduced.
  • Self-checkout – customers that have a small number of items have more lanes available to check out.  While the process of checking out on your own takes longer, the total time in store can be reduced.  Small transactions are removed from the other queues.  As tendering is the longest part of a transaction, the throughput of other queues is increased.

The biggest lesson here is to always think of the larger picture.  Perhaps reducing a line isn’t about charging people for it or adding more lanes.  Perhaps its tackling a way to attack the positive root cause of too many customers wanting your service.  A few ideas I’ve wanted to see in the real world:

  • Starbucks / Coffee Shops – Separate lines for brewed coffee and espresso based drinks and food orders.  I know it would be more difficult to sort this out, but seems like the espresso beverages and food take longer to actually order and then fulfill.  Seems like an express for the brewed coffee might actually keep lines shorter to make everyone happy.
  • Airports – Separate lines for experienced travelers and new travelers.  Why not have specific lines for people who need more help?  As a frequent traveler, I often grit my teeth as I watch my flight time edge closer and those in front of me don’t have their boarding passes, or their passport open, or their customs documentation filled out. They will go no faster or slower, so why not focus on them and provide an option for frequent travellers?  Kiosks have certainly improved this, but there is room for improvement!
  • Drivers License Renewals – I went to the local MTO for my drivers license photo, and while this process has been streamlined incredibly perhaps there is still a chance to remove the wait almost completely.  When I went on a lunchbreak there were 18 people in line in front of me and 10 joined afterward.  Lots of windows are open, but given that all you really need from me is a photo, why not allow the entire transaction to be staged online and have a specific line for photo only?  Allow me to stage the transaction online including my credit card number I want to use to pay.  Give me a barcode to bring.  When at the office, scan my barcode, let me stand there and take the photo.  There was still too much back and forth of slips of paper and cards and receipts.

None of these are ideas flawless and they may be dead wrong.  While there have been some great strides around queuing avoidance (online ordering, online license stickers renewals, mobile boarding passes, serpentine queues), I think it can go further.

I encourage more experimentation around queuing ideas.  I think the public are open to trying out something different.  As a consumer if an organization asks me to try something different to see how it works, I’d be glad to try it.  Why not try some new ideas?  Why not post the results online or in stores?  Let customers know you care about making their wait shorter or non-existent.    Make the goal a complete elimination of waiting, even if that doesn’t seem possible.

It’s all about choice.  Make sure there are options, and perhaps you can make everyone happy.

2011.36 | Self-checkout is Alive & Well

Over the past couple of weeks, there have been a rather surprising number of news articles on self-checkout.

Articles from Progressive GrocerCanadian GrocerCTVToronto StarToronto Sun as well as Independent Mail and more have been sent to me from friends, colleagues and customers.

Interestingly, some of the articles focused on a couple of retailers moving away from self-checkout to paint a picture of the retail industry minimizing self-checkout – a completely false perception based on my experience.

I won’t cite the fact that some of the statistics on usage are not quite right, and don’t jive with my experience working with retailers every day.  Forget that the reader survey on the page of one of these articles indicated that 42% of those who voted said that they prefer self-checkout.  I also won’t highlight the fact that a recent industry study indicates an expected increase in number of self-checkout solutions to be sold around the world.

While self-checkout may not be for every consumer or every retailer, self-checkout is not going away any time soon.   Why not?

  • Fit – Every retailer is different and their check-out strategies need to match their business. There is no one size fits all.  Some retailers will use it and some will not – the fate of an entire technology cannot be judged by the actions of a couple of players – whatever their situation or motivations.  To consider all retailers and their implementations the same misses the point.
  • Options – With all of the choice available, consumers want more options – not fewer.  The challenge for retailers is increasingly consumers want to do business their way.  Self-checkout, like all technologies, is about providing options to consumers – an option many customers (including me) want to use.   It’s always better to provide customers options, and retailers are aware of that.
  • Operational Integration – Some retailers that have implemented self-checkout particularly well have made it a true part of their business in one way or another. Anything that continues to provide operational and consumer benefits or a competitive advantage to a business will continue to be used.
  • Leveraging Multiple Technologies –  The options available for checkout are expanding, but no one option will suit all customer needs.  Today, assisted point of service and self-checkout are the primary platforms in North America.  There are even some stores moving to self scanning with a consumers own device.  I fully expect that one day associates in a store could use their own mobile devices to check customers out.  While these new technologies are wonderful, they don’t serve every need of every retailer or consumer, so the likely scenario is that self-checkout will co-exist with assisted service and mobile platforms.  Radio was to supplant live theatre, TV to replace radio, and the internet to eliminate TV, and yet they all co-exist today, and have even merged in various ways.  Like these technologies, expect self-checkout to be part of a store eco-system in the future, coexisting with mobile and assisted technologies; most likely blending with them in different footprints and uses.
  • Better Service – SCO can provide the personal touch and better service that all retailers wish to attain.  It is no different than any other technology in a store.  It is run by people – those people make the difference.  When they are doing it right they educate users in avoiding errors, getting ahead of issues and just helping people.   All of these things can be done with the same friendly hello and interactions you can expect in any assisted service environment. It’s all about people – but with no waiting.

Like any other retail solution, there have to be benefits to both consumers and retailers.

At the very crux of the matter, retailers want operational benefits and efficiencies.  People want options to get what they want and to get out of store as quickly as possible.

Self-checkout provides both to many retailers and many people.  Period.

2011.25 | Trade Privacy for Convenience

All retailers want to understand their customer better to sell more stuff.  In order to gain an understanding data must be gathered to build customer profiles.  Loyalty or member based card programs were instituted to gather data.  Consumers were and are willing to give up some privacy in return for a reduced price or special offers.  As technology has matured and become ubiquitous, privacy has become more precious to some.  Pricing has become increasingly competitive, and one can only discount so much.

One strategy for driving loyalty and gathering data is by offering convenience in return for taking part in a loyalty program.  One relevant current example is Starbucks’ mobile payment which is available to customers with a registered Starbucks card, and nobody else.  While there are benefits like a free shot of syrup and a free birthday beverage, these are standard items.  More exciting to customers is being able to pay quickly and simply every day, and it can only by done by registered customers.   What if we were to take this registered user benefit further?  Some examples:

  • A customer has coupons and offers tied directly to their card.  The customer only requires a reminder to buy the product to obtain the offer.  No need for customers to clip coupons or remember to bring them along.  When the loyalty card is scanned, and then a product is scanned, the customer gets the special price automatically.  With newer software solutions, this connectivity to the card can get granular enough that individual prices can be offered to individual segments or even individual customers if retailers wish to do so.  Not having to remember pieces of paper in the digital age is a benefit to consumers, and obtaining unexpected offers breeds loyalty.
  • Price guarantees are often provided over a certain time period.  In the online world, pre-orders have price guarantees that are provided automatically.  Why should customers have to go back to stores to ask for their credit?  Why not allow loyalty card holders or high value clients automatic refunds for price guarantees?  While it’s not practical for grocery, it can be done for general merchandise, fashion, and any large ticket items.  While it sounds counter-intuitive to give funds back, it is currently rare enough that it will drive confidence in a retailer to encourage return business on profitable large ticket items.
  • Loyalty customers could be eligible to receive e-receipts.  Retailers like Old Navy and Sears already provide such platforms, however there are some potential holes in the solution as it exists today.  First, if a customer has to provide an email address, there is always a chance that the receipt could go to the wrong place, and the customer will not have a receipt – a potential problem for both parties.  Second, providing e-mail addresses will soon start to slow down the check-out process.  Using a loyalty card or even an account number attached to the card will provide a quicker checkout experience and a database for the receipts.  Apple Stores already effectively do this using a customer’s Apple ID for the transaction based on the customer’s credit card swipe.
  • If a customer leaves an item behind at POS or Self-checkout, they can automatically receive an SMS message to ensure that they have all of their items with them.  This could be triggered by a button on the POS linked to the customer’s loyalty card which has the customer’s mobile number.  If the customer registers their mobile with the loyalty program, when they cash out, the cashier could have a button on their screen that allows them to SMS previous customers a standard message indicating that they should ensure that they did not leave anything behind.
Privacy for lower prices is common enough in the retail landscape.  There are many more creative outlets possible given all of the details in today’s technology.  Sooner or later, a savvy retailer will cash in on these potential differentiators.  These benefits are still novel today, and can win an audience accustomed to convenience and novelty.  Best of all, it uses technology in a way consumers love – in a manner that is ideally transparent to the user.

2011.24 | Dollars to Donuts

New Canadian Notes – The Bank of Canada has publicized the design of the newest set of legal tender here in Canada.  Check out all of the details on the new security features put in place to establish consumer confidence in paper money in the time of electronic payments.  If you are a retailer, ensure that you speak to your suppliers of technology that deal with currency (bill pay kiosks, self-checkouts, vending machines, currency counters, etc.) as upgrades may be necessary due to the new material and security features of the bills.  Operational changes will certainly need to be take place to understand and communicate the new features to staff so that they can validate that no counterfeit notes are accepted at assisted service.  New $100’s are coming our way this November.  Expect the $50 in March 2012, and the $20, $10, and $5 in fall 2012.  Canadian $2 and $1 coins are also changing in late 2011 or early 2012 in an effort to reduce the cost of currency, so changes will be a foot for coinage as well.  The Dutch are actually adding a 2D barcode to their Euro coin – scan it and see where it takes you.

ZooshNarette is promising the ability to provide payment via ultrasonic communication instead of NFC.  Their promise is that a $30 upgrade gets you the hardware interface on a POS, and the required interface on the phone is in place using the speaker and microphone.   While an excellent attempt at finding the holy grail, this is yet another splinter in the ongoing mobile wallet debacle.  My main concern would be security.  It didn’t take long for Shopkick, which uses ultrasonic technology to get hacked.   Why couldn’t someone nearby just record the ultrasonic sounds and then translate them to bits they can use online?  I’m sure they have an answer, but I’m not sure I’m ready to try it with my own money yet.  via PSFK

Consumr – Like a Flixster for consumer goods, where users can review consumer goods, and ratings are provided from critics as well. No app yet, but you can see how this would provide a useful resource for shoppers once it gets onto a mobile app, where one can only assume it is headed.  One more social platform for grocers to ponder. via PSFK

 

 

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