UK retailers missing out on queue-busting technologies

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By: Wise Marketer Staff |

Posted on June 29, 2006

UK retailers missing out on queue-busting technologies

Self-service technologies are transforming cost of sale and customer service across the world, according to Philip Hunter of KioskCom, who has voiced some ideas as to why UK companies are failing to respond as quickly as their counterparts in other markets.

According to Hunter, the weak dollar, volatile global financial markets and a drop in consumer confidence have combined to create difficult trading conditions for UK organisations across almost every market sector. With most looking to reduce costs, Hunter asks: Why do so many companies continue to pay sales assistants - from retail to hospitality - simply to watch customers enter their Chip & PIN details?

In the past, Europe led the way in adopting self-service technology, from bank ATMs to car park and station ticket machines. A decade later, Europe is lagging behind the rest of the world in the adoption of self-service technology. Companies across the US and Asia-Pacific are rapidly adopting solutions that reduce the cost of sale, improve customer throughput, and free up staff for added-value and up-selling activities.

Hunter told The Wise Marketer: "If the consumer - especially the queue-loving British consumer - is to be encouraged to self-serve, organisations need to take a long term training stance toward encouraging adoption. Organisations will need to invest in digital signage and dedicated 'queue busters' to direct and encourage the consumer toward the kiosk - an approach that has underpinned the widespread US 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."

A queue nation? The UK may be a nation of queuers but, in an increasingly demanding society, perhaps the British are no longer happy queuers. It is hard to measure the cost of lost sales and disgruntled customers who fail to return but every consumer-based organisation recognises the problem associated with poor customer throughput.

Given the recent switch to Chip & PIN technology (on 14th February 2006) the sales assistant's role has, in many cases, been reduced to little more than supervising transactions and, in a retail situation, putting the purchase in a bag. But can British companies really justify this wasted staff resource? In many cases the sales assistant behind the counter can no longer deliver any real business value. The sales transaction is a simple process: the customer has already made the purchasing decision and, unless deterred by long queues, will go on to 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 US and Asia Pacific?

Rapid market growth In the US, the market for kiosk-style self-service technology is set to grow by 39% in 2006, compared to only 15% in Europe. The reasons are fairly obvious: 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 airlines to encourage customers to adopt this approach.

Restaurants are also getting in on the act, providing customers with self-service ordering devices which 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. And even the US 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 UK companies are already experimenting and even succeeding 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 and issue instant tickets. This approach increases customer throughput, reduces queues (and frustration), and enables a far lower cost of sale.

Part of the problem, Hunter believes, may stem from the UK's early and often unsuccessful adoptions of self-service technologies: for example, attendant-free car park ticket machines are frequently out of order, and in the early days they had poor coin and note recognition, and rarely offered change. "Perhaps then, " Hunter mused, "it's no surprise that the morning queue at the railway station will not prompt many customers to brave the self-service machine."

But the good news is that newer generations of self-service technology are far more usable and reliable. Note and coin recognition solutions have been developed from the more demanding gaming industry, while interactive screens can be tailored to lead the consumer through almost any type of transaction with ease and speed. When consumers have increasing numbers of good experiences with self-service systems, more companies may be encouraged to adopt them.

Self-service evolution This process of technology adoption may be slow but, if handled properly, it will be steady. And, once in place, self-service offers companies a range of new opportunities to transform the process of direct consumer interaction. For example, the small size of many self-service kiosks offers space-constrained organisations new opportunities for expansion. It also enables more flexible sales strategies, by combining face-to-face with self-service terminals to provide a more complete customer service.

"Critically, in a highly competitive and difficult trading environment, the self-service kiosk can significantly reduce the overall cost of sale," Hunter concluded.

Event KioskCom is the event organiser for KioskCom Europe 2006 (November 8th - 9th, London, UK), which will feature some 50 exhibiting companies and a high-level conference and seminar programme, as well as a kiosk and self-service test-drive area. The show aims to educate and advise on the strategic and practical deployment of kiosks, self-service terminals and digital signage within the retail, hospitality and catering, travel and transport, financial, and public sectors.

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