Dispensing Strategies: Self-Serving Motives
By Michelle Brisebois
By Michelle Brisebois
Every now and then, you fall into the honey pot. The right place, at
the right time. The right business idea intercepts a sweeping consumer
trend. Vending is about to fall into that honey pot. Smack. Dab. You see, vending is just another name for “self-serve” – a means of
fulfillment traditionally seen as a back-up method for secondary
markets. A vending machine was the form of delivery chosen when it
didn’t make business sense to have a live person serve the customer.
Consumers didn’t prefer serving themselves, but they made the best of
it. Not any more.
Every now and then, you fall into the honey pot. The right place, at the right time. The right business idea intercepts a sweeping consumer trend. Vending is about to fall into that honey pot. Smack. Dab.
You see, vending is just another name for “self-serve” – a means of fulfillment traditionally seen as a back-up method for secondary markets. A vending machine was the form of delivery chosen when it didn’t make business sense to have a live person serve the customer. Consumers didn’t prefer serving themselves, but they made the best of it. Not any more.
The genesis of the self-serve “movement” can be traced to a gentleman named Frank Ulrich – a Los Angeles gas station owner. In 1947, he offered customers a discount of a nickel per gallon to man the pumps and “fill ’er up.” He doubled his business, selling $500,000 in gasoline in the first month.
It took 25 more years for the idea to take hold in the service station sector, but Ulrich was a true harbinger of change. It worked really, really well. While the five cents per gallon savings may have incented trial, the experiment suggested that self-service offered something beyond saving money. It appealed to consumers and the concept rippled across other industries.
Today’s consumer has embraced the concept of self-serve with a speed and intensity so significant that many businesses may fail to adjust quickly enough. In some ways, this shift defies logic. The old paradigm said, “good customer service involves a real person delivering that service.” After all, technology could fail (and often did) and it couldn’t “read” the customer and recommend other products and services.
The last several years have seen great strides in these areas. Equipment is more reliable and “smart” technologies now read purchase history to suggest other products that may be appropriate.
We can easily purchase books, do our banking, check out groceries, check onto an airplane and pay for parking without interacting with another human being. We’re rapidly being trained to use self-serve channels, but the enthusiasm with which consumers are accepting self-serve options begs the question: is there more to this? Is there something else in it?
Some sociologists believe the increasing popularity of self-service channels is born out of antisocial behavior. Some consumers don’t want to deal with retail personnel, whom are often fatigued and frustrated themselves. A machine doesn’t judge or chastise you for stepping up to the wicket too quickly.
Jim Mahanes, a former University of Kentucky behavioral sciences professor, sees the self-service preference as a means of insulating ourselves from information overload. We’re overwhelmed with “connectivity.” Avoiding personal interaction is seen as a relief from the chatter we’re subjected to.
Other psychologists see it as a societal need for control – we want to take charge of the transaction. The most likely driver is the time factor. Peter Honebein indicates in his book, “Creating Do-It-Yourself Customers: How Great Customer Experiences Build Great Companies,” increasingly customers are seeing no value in being served. The interaction takes time they would rather spend on other activities. They want to get in, get out, and get on with their lives.
And studies confirm that self-serve options have a myriad of benefits.
A 2005 study by Ipsos Reid found 27 per cent of Canadians said they would be more likely to shop at a store that offers self-checkout technology as opposed to one that does not. The consumers who would be more likely to shop where self-serve technology was available mentioned choice in how they check out (86 per cent), speed of checkout (85 per cent), shorter lines (84 per cent), control (75 per cent) and privacy (71 per cent) as benefits related to self-serve technology.
Fifty-two per cent were receptive to the idea of a kiosk for pre-ordering deli items, and having the order fulfilled while they shop for their groceries.
NCRs Retail Solutions Division in Canada indicated Canadian shoppers clearly want self-serve options and this demand is likely to grow. Some stores with self-checkout report that up to 50 per cent of transactions are made by those serving themselves.
It’s becoming clear that self-service channels are most effective when they complement human interface – not replace it. It’s always a bit of a surprise to see how consumers actually incorporate technology into their lives.
Many heralded the entry of microwave ovens into the home as the beginning of the demise of the traditional oven. Microwaves came with cookbooks containing recipes for roasting meat and baking muffins. Consumers soon discovered that the conventional oven was actually best for these activities but microwaves were great for reheating leftovers, melting chocolate – you get the drift. Banks closed branches left, right, and centre when ATM machines popped up only to start opening them again several years later.
Consumers don’t necessarily substitute one technology for another, they use them in a serial fashion much like different golf clubs are used for different shots. Think of ways your machines can support the real human beings on the front line. Add value by monitoring your sales data and ride the wave of success. o
Michelle Brisebois is a marketing professional with experience in the food, pharmaceutical and financial services industries. She specializes in brand strategies. Michelle can be reached at email@example.com.