Can self-service save retail from a seasonal sales dip?

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By: Wise Marketer Staff |

Posted on October 18, 2007

Despite an expected downturn in bricks-and-mortar retail spending this Christmas, money savers and money spenders alike will still be flocking to the internet for their gifts and bargains, according to Phil Hunter, director for the KioskCom Europe self-service conference and exhibition.

With rising interest rates, and consumers having to tighten their purse strings for so many reasons this year, retailers may be in for a lean Christmas, Hunter warns. But before they scale down their staffing and reduce their luxury lines, it is worth looking at ways of serving the needs of those consumers who still have money to spend.

Novelty value
According to Hunter, the thrill of online purchasing is still shining brightly, and this is for the traditional reasons: ease of browsing and ordering, large choice and variety, and of course competitive pricing. And this, he argues, is possibly the key to making the High Street retailer profitable when others face declining sales.

Forward-thinking retailers are beginning to understand the value of taking the benefits of an online store and reproducing them in bricks-and-mortar stores through the medium of Interactive Self Service kiosks, effectively giving customers the best of both worlds.

Looking to the future
Self service technologies, including kiosks, are slowly becoming a more regular sight in retail stores, and are already proving popular with customers. But although new deployments of this kind of technology in retail stores may not be possible in time for this year's festive shopping season, the problems it addresses are expected to continue into the new year and beyond.

The deployment and implementation of self service satisfies a lot of the customer's needs while also creating an improved revenue stream for the retailer, whether through using "lost space" in store or even reducing staffing costs.

In the UK there has been a varied uptake in the kiosk revolution with airports and airlines being the real early adopters, but with major stores such as Tesco, Argos, Sainsbury's, and Boots following close behind. These companies have found that, through careful and considered deployment, self service can work effectively in the High Street and it provides a way of having a broader product base (not to mention being more able to keep pricing competitive).

Taking a wider view
But, Hunter warns, if retailers are to survive the online versus High Street battle, they will need to understand self service technology and how it fits into the broader spectrum of their company's activities. No longer can retailers survive on stores alone: They will increasingly need to offer a shopping experience that allows customers to have it all - and to have it immediately.

Self service is one way to bridge that gap, and its success has been well documented. According to a recent survey by SITA, the airline industry's move toward self service is already saving billions of dollars each year. For example, Air Canada has confirmed it now costs only 0.43% of the original manual cost to check passengers in via self service kiosks. Hunter asserts: "If this level of cost saving can be reached on airline tickets it seems reasonable that the savings possible in retail stores is at least comparable."

Will it save Christmas?
"Well, as any good retailer knows, it is vital to have your Christmas lines, but these often mean bulky packaging, vast areas of prime store space occupied, and the spotlight turned away from your regular lines," explained Hunter. "Having a seasonal kiosk means goods can be ordered cleanly, without this mechanising nightmare, and this means lower staffing costs and improved revenues."

For example, in 2006, Ralph Lauren trialled an innovative form of self service by creating a touch screen in the store window that allowed customers to shop 24 hours a day, 7 days a week. Perhaps it was something of a sales gimmick, but it proved to be a popular choice and was backed up by the successful fulfilment of orders. It brought a whole new meaning to the usually unprofitable phrase, "window shopping".

Hunter concluded: "Retailers will have to learn quickly if they are to survive this battle, as it seems to be one that won't go away easily. And when it comes to satisfying customers, why should it go away? With shows such as KioskCom Europe's Self Service Expo expanding to accommodate increasing visitor counts, it is encouraging that so many major retailers are grasping the self-service concept with enthusiasm."

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